Analysis from Verivox, a comparison platform, reveals a discernible difference in borrowing costs for consumers in eastern Germany compared to those in the west. The findings, reported by the Funke-Mediengruppe newspapers, are based on an evaluation of installment loans finalized through the Verivox platform over the past year.
Eastern German borrowers face an average interest rate of 6.81 percent on installment loans, approximately 3.5 percent higher than the 6.58 percent average seen in western Germany. This difference extends to the loan amounts themselves; eastern German individuals typically borrow an average of €16,359, while their western counterparts secure loans averaging €17,396.
According to Oliver Maier, CEO of Verivox Financial Comparison, the variance reflects a correlation between income levels and borrowing capacity. “The loan amount needs to align with income” Maier explained. “Individuals with lower incomes naturally have a limited ability to finance larger loans. Banks are unlikely to approve financing that would create an unsustainable repayment burden based on a borrower’s financial capabilities.
Data indicates that the average net income for individuals securing loans through Verivox in western Germany is €2,700, compared to €2,413 for those in eastern Germany. This income disparity contributes significantly to the observed differences in borrowing terms and loan sizes.