Analysis from comparison platform Verivox reveals a discernible difference in interest rates and loan amounts for consumers in eastern Germany compared to their counterparts in the west. The findings, published by Funke-Mediengruppe newspapers, stem from an evaluation of installment loans secured through the Verivox platform over the past twelve months.
Eastern German consumers face an average interest rate of 6.81 percent on installment loans, roughly 3.5 percent higher than the 6.58 percent average seen in western Germany. This difference extends to the loan amounts themselves; the average loan taken out by an eastern German consumer is €16,359, compared to €17,396 for those in the west.
According to Oliver Maier, Managing Director of Verivox Financial Comparisons, the discrepancy reflects the necessary correlation between loan size and income. “The credit amount must correspond to the income” Maier stated. “Those who earn less cannot finance such high loan amounts with their salaries. If the requested loan amount and the resulting installment burden exceed financial capacity, banks are likely to decline financing.
Data from Verivox indicates that the average net income for consumers in western Germany securing loans through the platform is €2,700, whereas the average net income for eastern German consumers is €2,413. This income disparity appears to be a key contributing factor to the observed differences in loan terms and amounts.
