Pay 40 percent higher or less
Young people do not pay their loans 40 percent higher or less than the average consumer in Germany. This emerges from the data of credit bureau on contract behavior of Germans.
On average, 97.5 percent of the loans granted in Germany are duly repaid. The default rate is therefore 2.5 percent. In the 18 to 19-year-old age group, 3.5 percent do not fulfill their obligations.
The fact that young people are more likely to find themselves in difficulties may be due, on the one hand, to the lower financial gambling margins and the greater overall economic uncertainty, but on the other hand to the lack of experience. Credit experts see above all installment payments in the mail order or electronics market and mobile phone contracts as the cause.
Especially with mobile phone contracts, young consumers are often unaware that they are economically concluding a loan agreement with appropriate commitments. This is the case when first of all nothing has to be paid for high-quality equipment and the purchase price is then integrated in the monthly fees.
Although the debt problem of Germany’s U-20 consumers can lead to serious consequences in individual cases, it does not weigh heavily on the overall economy. Often, young people do not receive any credit or take out loans ranging from a few hundred to a maximum of 1,000 euros. credit bureau has recorded a good 42,000 loans to persons under the age of 20 in its database. By comparison, the highest credit age group, 45 to 49, has 2.6 million contracts.
credit bureau also makes negative contributions to borrowers under the age of 20. “Puppy protection” is not available at the credit agency. In very young years, the consequences of a negative feature are often not as serious as in later stages of life, because no existentially important contracts are at stake. However, the perceived disadvantages can be particularly painful at this age: for example, with a negative entry it is hardly possible to conclude a mobile phone contract with a subsidized terminal.
In international comparisons, Germany is well-positioned in terms of the reliability of its borrowers. With a default rate of 2.5 percent, Germans are among the most reliable borrowers worldwide. In the US, the default rate is 7 percent. Many Americans fall into the debt trap with revolving credit cards.