Cheap Loans Austria: How to Find the Lowest Interest Rates

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What Makes a Loan "Cheap"?

A cheap loan is characterized not only by low interest rates. What matters is:

• Low effective annual rate (APR) (including all fees)
• No hidden costs (processing fees, account management)
• Flexible conditions (extra payments without surcharge)
• Fair early repayment (low compensation)

Current Interest Rate Ranges for Cheap Loans

Loan Type	Cheap Rates	Average	Expensive
Personal Loan	4.5% – 5.9%	6.0% – 7.9%	8.0% – 12%
Car Loan	3.9% – 4.9%	5.0% – 6.9%	7.0% – 10%
Home Improvement Loan	3.5% – 4.5%	4.6% – 5.9%	6.0% – 8%
Mini Loan	7.9% – 9.9%	10% – 12%	13% – 15%

More on current rates: Loan Interest Rates Austria

10 Strategies for a Cheap Loan

1. Compare Multiple Offers

The most important tip: Compare at least 3-5 offers. The interest rate differences can be significant.

Example at €10,000, 48 months:

• Provider A: 5.5% → Total costs: €11,167
• Provider B: 8.5% → Total costs: €11,832
• Savings: €665

Use our Loan Comparison Guide for a quick overview.

2. Improve Your Credit Score

The better your creditworthiness, the cheaper the interest rate:

Measure	Effect	Time Required
Pay bills on time	↑ KSV score rises	Ongoing
Pay off old debts	↑ Better household budget	Medium
Cancel unused credit cards	↑ Fewer open credit lines	Low
Check KSV report	↑ Correct errors	Low

3. Specify Purpose

Purpose-bound loans often have lower interest rates:

• Car loan: Vehicle as collateral → approx. 0.5-1% cheaper
• Home improvement loan: Renovation/furniture → approx. 0.3-0.8% cheaper
• Education loan: For training → partially subsidized

4. Choose a Shorter Term

Shorter terms usually mean:

• Lower interest rates
• Significantly lower total costs

Example €10,000 at 6% interest:

• 36 months: €940 interest costs
• 60 months: €1,600 interest costs
• Savings: €660

5. Choose the Optimal Loan Amount

Very small loans (under €3,000) often have higher interest rates because the administrative effort for the bank is the same.

Tip: If you need €2,500, check whether €3,000 might not be cheaper.

6. Don't Forget Your Main Bank

Even though online comparisons are convenient – also ask at your main bank. As an existing customer, you may receive:

• Special conditions
• Room for negotiation
• Faster processing

7. Offer Collateral

With additional collateral, you can lower the interest rates:

• Guarantee from a relative
• Pledging of savings
• Assignment of a life insurance policy

8. Choose the Right Timing

Avoid loan applications:

• During the probation period
• With temporary contracts close to expiration
• With negative KSV entries

9. Watch for Hidden Costs

Check carefully:

• Processing fees
• Account management fees
• Costs for extra payments
• Credit life insurance (usually unnecessarily expensive)

10. Ask About Promotions

Banks regularly offer:

• Promotional interest rates
• Waived processing fees
• Welcome offers for new customers

Common Mistakes to Avoid

Mistake 1: Only Looking at the Monthly Payment

Problem: Low payment through long term = high total costs

Example €10,000 at 6%:

• 36 months: €304 payment, €940 interest
• 72 months: €166 payment, €1,952 interest

Solution: Always compare total costs, not just the payment.

Mistake 2: Taking the First Offer

Problem: Interest differences of 2-4% are normal

Solution: Get at least 3-5 offers. The effort: 30 minutes. The savings: several hundred euros.

Mistake 3: Comparing Nominal Rate Instead of APR

Problem: Nominal rate doesn't include fees

Solution: Always compare the effective annual rate (APR). More on this: Loan Interest Rates Austria

Mistake 4: Taking Credit Life Insurance

Problem: Often expensive and with many exclusions

Solution: Check whether you really need the insurance. Often a separate term life insurance is cheaper.

Mistake 5: Using Overdraft Instead of Loan

Problem: Overdraft interest rates are 10-15% p.a.

Solution: For longer-term needs, take out a personal loan (4.5-9% p.a.).

Sample Calculations: How Much You Can Save

Example 1: €5,000 Loan

Scenario	Interest Rate	Term	Interest Costs
Expensive	9.9%	48 months	€1,076
Cheap	5.5%	48 months	€575
Savings			€501

Example 2: €15,000 Loan

Scenario	Interest Rate	Term	Interest Costs
Expensive	8.9%	60 months	€3,648
Cheap	4.9%	60 months	€1,952
Savings			€1,696

Calculate your own savings: Loan Calculator Austria

Debt Restructuring: Making Existing Loans Cheaper

Do you already have a loan with high interest rates? A debt restructuring can pay off:

When Is Debt Restructuring Worth It?

• Your current interest rate is 2% or more above current offers
• The remaining term is at least 12 months
• The early repayment fee is less than the interest savings

Debt Restructuring Example

• Old loan: €10,000 remaining balance, 36 months remaining term, 9.9% interest
• New loan: Same parameters, but 5.9% interest
• Savings: approx. €600 (minus any early repayment fee)

Frequently Asked Questions

What Is the Cheapest Loan in Austria?

That varies depending on the provider and your personal creditworthiness. Currently, the cheapest personal loans are around 4.5-5.5% effective annual rate for customers with very good credit.

Can I Get a Cheap Loan Without Credit Check?

Difficult. With poor creditworthiness, interest rates are higher or the loan is rejected. Alternatives:

• Offer a guarantor
• Smaller amounts (mini loan)

Is an Online Loan Cheaper Than at the Bank?

Often yes, because online providers have lower administrative costs. But: Compare both options anyway.

How Can I Lower the Interest Rate?

1. Improve creditworthiness
2. Specify purpose
3. Choose shorter term
4. Offer collateral
5. Compare multiple offers

Conclusion: How to Get the Cheapest Loan

1. Always compare multiple offers – 30 minutes effort, savings of several hundred euros
2. Look at the effective annual rate – only this is comparable
3. Improve your creditworthiness before applying
4. Choose the shortest possible term – this saves the most
5. Avoid unnecessary add-on products like credit life insurance

Related Articles:

• Loan Calculator Austria
• Loan Comparison Guide Austria
• Personal Loan Austria
• How to Get a Loan in Austria

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Disclaimer: The interest rates mentioned are guidelines and may change. The actual interest rate depends on your personal creditworthiness. For binding offers, contact the provider.