Understanding instalment loans

Checking an instalment loan: repayment, term and total cost

Go through instalment loans step by step, using identical key figures to make repayment, term, effective rate and total amount comparable.

Updated: 31 August 2026 Tim Jungeblut Editorial methodology

An instalment loan is repaid in fixed instalments. What matters is whether the repayment fits your budget for the long term and whether the total amount is reasonable compared with the alternatives.

Don’t stop at the monthly figure

A longer term usually reduces the repayment but often increases the interest cost. Work through at least two terms with the same amount.

Before you apply

Check your income, fixed spending, existing repayments and reserve. Additional insurance only belongs in the comparison if its benefit and cost can be assessed separately.

Effective rate, not just the borrowing rate
Total amount and number of instalments
Special repayments and early settlement
No unnecessary add-on products

In this section

Car loan

Work through car financing: combine cash price, deposit, final balloon payment and effective rate into a reliable total price.

Renovation

Plan renovation costs realistically: settle tradespeople's quotes, materials, project reserve and own funds before the loan amount.

Refinancing

Check refinancing: set the outstanding balance, settlement costs and the remaining cost of the old loan against the total cost of the new one.

Loan comparison

Set the loan amount and term and compare here using the embedded Verivox comparison. Effective rate, repayment and total amount at a glance.

Frequently asked questions

What is an instalment loan?

An instalment loan (Ratenkredit) is a consumer loan with a fixed term that you repay in equal monthly instalments made up of interest and capital. The borrowing rate is usually fixed for the whole term, so the repayment and the total amount are known from the start. At the end of the agreed term the loan is fully repaid.

What should I pay particular attention to in a loan offer?

Always read the effective annual rate and the total amount together, along with the size and number of instalments. Also check whether special repayments and early settlement are possible and what they cost. Add-on products such as payment protection insurance should be shown separately and assessed individually.

Can I repay an instalment loan early?

Consumer loans can generally be repaid early, in full or in part, at any time. Under certain conditions the lender may charge early repayment compensation (Vorfälligkeitsentschädigung), the amount of which is capped by law. The amount that applies in your case is stated in the loan agreement and in your lender's settlement statement.

Selected sources

Your next steps

Effective rate

Telling the borrowing rate, the annual percentage rate and the total amount payable apart – and knowing which costs the Price Indication Ordinance includes in the calculation.

Loan costs

Model the monthly repayment, interest cost and total amount for a loan amount, effective rate and term – directly in your browser, without data transfer.