Cancelling insurance attached to a bank loan

13 posts in this topic

Recently took a bank loan at our local sparkasse I knew to be prepared for added extras like insurance and such, but typically you can decline it or it's a small fee. Well the NL@TB said we had to take insurance. OK, rate at 9% was a bit high but I'm planning on paying it out early and that's the point we discussed. She also said and this is important the insurance is pro rated over the life of the contract (no 100% sure on that as my German isn't that good) Got home and took a closer look at the contract and realized they simply added it to the loan, suddenly my loan is 25% larger!

 

Speaking with my insurance agent (Herr JohnG love that dude) he said they can't force you to take the insurance. Sure I can pay it out early but I'm still stuck paying out 1800€ for some stupid insurance.

 

So before I head over to take a stripe off of ass is it true they can't force you to take insurance. I also need to confirm with her that the insurance is pro rated

 

Secondly is it possible to cancel a loan (subject to loads of fees) within a certain period

 

Thanks

 

BTW I did apply via payback.de for a loan and they did a nice bait and switch. Advertized interest was 4.9% while the contract was 7.9%

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Sorry can't edit but wanted to add this

 

AGBs Widerrufsinformation: Der Darlehenshemer kann seine VErtagserklarung innerhalf von ein Monat ohne Angabe von Gurnden widerrufen.

 

Not 100% on this but it looks like I have one month to cancel.

 

Edit: it looks like 14 days

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Usually loan insurance is 14 days. But if you pay the loan off early you will get some of the insurance back. Was my case. I got insurance on a loan not knowing exactly what it would cost and the lady at the bank kept saying im not sure of the exact cost. (Typical germans you ask for an approx answer and if they don't know precisely they wont tell you).

 

Since i only needed the loan for a short while after i paid all the loan back, about a week or so later i got about 90% of this insurance money deposited on my bank account.

 

Its absolutely bullshit. I am guessing easy credit??

 

Full unemployment insurance on my huge house mortgage was a one off 5k but for a small loan it was also about 5k. its the biggest scam ever. Get out of it as soon as you can.

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http://www.juraforum.de/forum/t/kopplungsgeschaeft.237079/

Here are some views on what is known as Kopplungsgeschäft (tying practice ), Tim Hortons Man, when you´re forced to buy something to buy something else! :)

My bank tried that on me years ago and I actually (deliberately ) asked if that was a Kopplungsgeschäft. The woman said " oh, you don´t need an insurance as your account is fine " or something to those words...

 

Disclaimer: I´m not a lawyer

I am a professional independent insurance broker and authorised advertiser. Contact me.
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http://www.juraforum...schaeft.237079/

Here are some views on what is known as Kopplungsgeschäft (tying practice ), Tim Hortons Man, when you´re forced to buy something to buy something else!

My bank tried that on me years ago and I actually (deliberately ) asked if that was a Kopplungsgeschäft. The woman said " oh, you don´t need an insurance as your account is fine " or something to those words...

 

Disclaimer: I´m not a lawyer

 

First of all - JOhn_G (as was to be expected) as a financial expert of some reknown is entirely correct that a Koppelungsgeschäft where they force you to sign up on a risk-insurance in order to get the loan is illegal and you can easily step away from that.

Especially if they sold you a plan where the costs are incorporated into the intial loan because that means your actual loan gets more expensive AND you even pay interest on the risk insurance costs...

 

If the bank insists on risk coverage or if you'd like to have the family covered for the case of you losing your income etc. , there are other options available in Germany where you just pay a monthly premium as long as you hold the loan. that way you don't have to pay double for the risk insurance and only pay as long as you need to have it around.

So, if they tell you they will make life hard on you regarding the loan if you step back from the risk insurance, tell them a) you'll take that to the next Verbraucherzentrale including a formal protest at the director/CEO of the bank (which then needs to be reported to the BaFin, something they truly hate to have on their records) AND you'd have an equally sufficient insurance solution ready available that costs far less... that should stop their jacking :-)

 

Cheerio

I am a professional independent insurance broker, financial adviser, and authorised advertiser. Contact me.
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Thanks everyone for the answers and yes it was Easy Credit. I went with them as when I first looked online I found what I thought was a great deal with BW Bank (via Payback.de) get some points and a lower 4.5% interest rate, but when went to print the documentation out the suddenly changed to 7.9%.

 

It's been so long since I've applied for unsecured credit that I've forgotten how fast the interest (8-10% adds up) went to money chimp and put in 5 years at 10% and it worked out the same. In the end the bank gave me the flexibility I wanted.

 

And if you want to look at it glass half full, they gave me some insurance (that I'll I never need) for free.

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OK I have an update here. Easy Credit is super sneaky, what they do is calculate the interest charge based on the loan amount and then add super expensive insurance to the payment. This way it seems like a reasonable deal,only 7-8%. BUT the cost of the insurance is sky high in our case 3700€ for a 7000€ loan 

 

-NUTS- 

 

Another trick they use is to imply the insurance is required.when it's really not.My wife speaks German and even she got confused at how the insurance worked My suggestion is if you need a loan go to check 24 apply for a loan where you can print out the documentation and review it properly. 

 

It was a very expensive learning lesson

 

Around the same time we bought a car and applied for financing at the dealer, we were offered top up insurance, replacement value in the case of a write off and it was like 75 Euros a year. 

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I used to find this useful, Tim, and it´s still important in most parts of the corrupt world we live in..Germany is no exception:

 

http://legal-dictionary.thefreedictionary.com/caveat+emptor

 

An old school friend I grew up with  became at some stage a bank manager at Barclays Bank in England. He´s retired. He told me  couple of years ago it had become too stressful: no longer advice on what was the best thing to advise but...sell - whether it was in the client´s interest or not.

He even pointed out what he thought was a " problem " on our website - where I wrote ecological investments are THE future..." it could be interpreted as selling whether the right thing for the client or not "...haven´t, I admit, yet got around to changing the text--though I will  and - another though - have a good part of my personal portfolio in that area. And will continue to...personal belief.

I am a professional independent insurance broker and authorised advertiser. Contact me.
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This seems to be a common practice with some banks. Im facing a similar situation right now.

 

I have applied for a home loan with a bank last week. The Berater informed me that it is 'Pflicht' to take Risikoversicherungen attached to a home loan. I believed him blindly and signed the corresponding documents. The whole loan amount now includes both the home loan as well as the Versicherung amount. And he informed me this week that the loan is approved now for that offer.

 

Afterwards I got suspicious since I still have Restschuld for the Versicherung part of loan as well at the end of the loan period and it did not seem right. 

 

After seeing this thread, I telephoned him yesterday and told him that I do not want to take any Risikoversicherungen anymore and would like to back out. But I would like to go forward with the home loan part only. He got very angry and tried to tell me that banks can decide on their own regarding the conditions, but at the end offered that I can speak to his boss about it.

 

Can someone provide me more guidance on this regarding what I need to talk to them. I would still like to go ahead with the home loan part as it is a good offer.

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Can't help you on this one but for future reference apply online somewhere like Check 24 you'll get better rates and have a chance to read and understand the fine print. I'll never go to the bank again

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1 hour ago, Krisgod said:

This seems to be a common practice with some banks. Im facing a similar situation right now.

 

I have applied for a home loan with a bank last week. The Berater informed me that it is 'Pflicht' to take Risikoversicherungen attached to a home loan. I believed him blindly and signed the corresponding documents. The whole loan amount now includes both the home loan as well as the Versicherung amount. And he informed me this week that the loan is approved now for that offer.

 

Afterwards I got suspicious since I still have Restschuld for the Versicherung part of loan as well at the end of the loan period and it did not seem right. 

 

After seeing this thread, I telephoned him yesterday and told him that I do not want to take any Risikoversicherungen anymore and would like to back out. But I would like to go forward with the home loan part only. He got very angry and tried to tell me that banks can decide on their own regarding the conditions, but at the end offered that I can speak to his boss about it.

 

Can someone provide me more guidance on this regarding what I need to talk to them. I would still like to go ahead with the home loan part as it is a good offer.

Scroll up a little bit and you´ll see a fine post by Starshollow, a top financial advisor , re that issue, Krisgod!

I am a professional independent insurance broker and authorised advertiser. Contact me.
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On 05/05/2017, 14:32:11, Krisgod said:

This seems to be a common practice with some banks. Im facing a similar situation right now.

 

I have applied for a home loan with a bank last week. The Berater informed me that it is 'Pflicht' to take Risikoversicherungen attached to a home loan. I believed him blindly and signed the corresponding documents. The whole loan amount now includes both the home loan as well as the Versicherung amount. And he informed me this week that the loan is approved now for that offer.

 

Afterwards I got suspicious since I still have Restschuld for the Versicherung part of loan as well at the end of the loan period and it did not seem right. 

 

After seeing this thread, I telephoned him yesterday and told him that I do not want to take any Risikoversicherungen anymore and would like to back out. But I would like to go forward with the home loan part only. He got very angry and tried to tell me that banks can decide on their own regarding the conditions, but at the end offered that I can speak to his boss about it.

 

Can someone provide me more guidance on this regarding what I need to talk to them. I would still like to go ahead with the home loan part as it is a good offer.

 

 

You could simply ask the bank "Berater" if he is aware that "Koppelungsgeschäfte" between loans and insurances are against the law and that therefore the insurance forced upon you is nil&void anyway? (and that this is not allowed is standard legal info since 2010 when the BGH decided this).

 

If you google "Verbotene Koppelungsgeschäfte Darlehen", you'll find ample information to this regards:

http://anwalt-im-netz.de/archiv/2009/kopplungsgeschaeft-olg-stuttgart.html

http://wirtschaftslexikon.gabler.de/Definition/kopplungsgeschaefte.html

https://www.bmjv.de/SharedDocs/Artikel/DE/2016/02192016_Wohnimmobilienkreditrichtlinie.html

 

In your case I would take this to the nearest "Verbraucherzentrale" and have them check this for you and then write to the bank on your behalf.

 

Cheerio

 

I am a professional independent insurance broker, financial adviser, and authorised advertiser. Contact me.
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Thats a very helpful advice. Thanks a lot Starshollow. I would certainly approach the verbraucherzentrale immediately if the bank does not solve this on their own.

 

I checked the documents and still have the Widerrufrecht for 1 month where I can cancel the insurances.

 

But my only concern is regarding the main loan where both the home loan and insurance loan are clubbed. And if I cancel the insurances, what would happen to the loan part taken for this insurance as it has already been approved.  

 

 

 

 

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