Are you planning to take out a 144 month loan? Would you like to repost existing loans or fulfill a bigger wish like start a business? Are you employed in the public service or employed in the private sector?

Small installments for large loans, that is the main argument to finance long term. Below we present you with advantages and disadvantages as well as individual offers. Also, find out why you should search specifically for shorter-term loan offerings.

144-month business loan – target groups

144-month business loan - target groups

A 144-month business loan for private sector employees is a recent development. The main goal of the providers remains the public service employees and academics. The focus on these professions is in the context of a secure employment relationship. Lifetime officials are virtually non-terminable.

Although a father of state can terminate a long-term employee with a permanent contract of employment theoretically, in practice the chances are extremely low. The income may be considered safe in this occupational field in the long term. Well-trained academics, such as university professors, work equally safely. The own chair guarantees virtually 100% job guarantee and at the same time an exceptionally good remuneration.

In addition, top-notch academics have practically life-long career opportunities in highly-paid positions in the private sector. The risk of being unable to pay for loans with a working time of 144 months due to job losses is extremely low among the central target groups. Offers for long-term financing come from both insurance companies and the banking sector.

Civil Servant Loan – Life Assurance Loan

Civil Servant Loan - Life Assurance Loan

Civil service loan from a life insurance company was considered to be the most viable long-term loan for many decades. The interest rate level for civil servant credit was always slightly higher than the market rate for bank credit. Nevertheless, the long-term financing of end-of-term loans did not result in horrendous extra costs. At the same time as the repayment, the profit sharing was distributed.

The extra compensation put the additional costs of the loan with 144 months of insurance largely into perspective. Since only the sum insured was paid off at the end, the monthly payments remained moderate, despite the increased lending rate. Interesting was the civil service loan, especially for young civil servants, who decided early on the acquisition of real estate.

Today, in times of low interest rates, the civil service loan has lost much of its appeal. The bottom line is that loans are usually noticeably more expensive than bank loans. The “rewarding element” of generous profit sharing was destroyed by the ECB policy interest rate policy. Without being able to expect an adequate refund at the end, most of the credit with B-rate pays off better.

Bank loan with 144 months maturity at the B-rate

Bank loan with 144 months maturity at the B-rate

Employees of the public service are considered to be particularly creditworthy against the background of job and payment security. Credit institutions generally rate their credit rating so well that they offer the profession particularly low-interest special loans. The credit with B-tariff distinguishes itself, in direct comparison to the credit of the same offerer to “all”, by reduced interest and special conditions.

Offers to summarize the particularly good creditworthiness under a special tariff come regionally from house banks. Nationally, credit institutions, such as the Allgemeine Beamten Bank, appear in credit comparisons with the B-rate loan. ABB is currently offering the loan with a creditworthiness-independent effective annual interest rate of 6.95 percent for 144 months.

The monthly installment, based on the net loan amount of 20,000 euros, is calculated by the reference calculator at 202.89 euros. In total, borrowers pay back € 29,216.63 for a € 20,000 approved loan. This results in pure financing costs of 9,216.63 euros. The impressive figure of almost 1/3 of the repayment amount – as an interest payment – shows the negative side of long maturities.

Even if the credit rating is good or very good, a loan with a maturity of 144 months always results in clearly noticeable compound interest. That may make sense if it would be used to finance long-term value goods. For example, a land purchase. The expected increase in value offsets part of the interest burden.

For pure “consumer goods”, for example, to buy a car or to compensate for existing liabilities, it is always useful and cheaper to finance as possible with a short term. The optimal compromise between financing costs and small installment payments is usually found with a maturity of 84 months.

Loan debt for “ordinary citizen” – installment loan with 144 months duration

Loan debt for "ordinary citizen" - installment loan with 144 months duration

Without father state as employer in the back the choice of the credit offers clearly limits itself. Installment loans for private sector employees, such as rescheduling, are available to most banks for up to 120 months. Only the extra loan (loan for free use or rescheduling) of the Palsen Bank appears in the credit comparison.

The loan is offered with a maturity of 144 months at a credit-effective effective interest rate of 3.95 percent to 15.95 percent. 2/3 of all borrowers show the representative average interest rate. It currently stands at 9.12 percent effective interest pa and ensures small installments, but unfortunately also high financing costs. 20,000 euros net loan with 144 installments of 224.91 euros each lead to 32,386.61 euros repayment.

The bottom line is 12,386.61 euros financing costs. If instead a Smava request loan with 120 months run time taken up, the calculation goes up better.

4.44 percent non-credit-effective effective interest rates lower the financing costs. The bottom line is that borrowers pay well less than half of the financing costs. A total of 120 months would pay “only” credit costs of 4,702.50 euros.


Much more important than the knowledge that a 144-month business loan is significantly more expensive would be the realization that the installment can not be arbitrarily reduced by extended term.

The example mentioned in the example 20,000 euro loan with 120 months would be in the monthly rate by 19 euros cheaper than its benchmark. – The only 144-month business loan offered without B-rate would be the extra credit mentioned.