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tricks that the biggest german bank uses to get you trapped for life

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Trick no. 2 : The spreads

When we signed the contract we had a very dim idea about spreads and how they impact the total loan cost. But the impact turned out to be huge. We realized that when we decided to change the loan currency. And we had not been informed by the bank representative that the impact would be that huge.
Even though the loan was denominated to swiss currency chf, the loan financing was in polish zloty and also loan pay-back was in polish zloty (PLN). Both the loan balance and the installment were quoted in CHF. While financing the loan, the bank used their own exchange rate tables to convert the loan balance from chf to pln. Due to this, we got about 8000 PLN less than if the conversion was made based on the average exchange rate published by the polish national bank. 8000 zlotys is a significant amount of money.
Furthermore, while paying back the loan, the bank converted the value of the installment from chf to pln based on their own exchange rate tables and the resultig sum in pln was taken from our banking accout. So even though the installment was constant and equal to 410 chf, the sum taken from our account was variable... And it was a bit higher than if the conversion was made based on the average exchange rate of the polish national bank.

The spreads did cost us a lot of money - about 14000 PLN plus interest, resulting in about 30 000 PLN en total i suppose. That is a significant part of the initial loan balance.
The spreads had an immense effect in the following:
  • the rate at which the loan is being repaid ;
  • the interest portion of the monthly installments was greater ;
  • when we wanted to change the currency it turned out that the loan balancing converted to pln is almost equal to the property value - so called LTV would have been smaller if Deutsche Bank's spreads had been lower.;

  • So - the spreads have had an immense effect on the total loan cost and we had not been informed about it.


    Contents / Spis tresci

    Trick no. 1 : Mortgage loan selling procedure
    Trick no. 2 : The spreads
    Trick no. 3 : Contract repairment
    Trick no. 4 : Convertion of loan currency
    Trick no. 5 : Conversion of variable interest rate to fixed interest rate
    Problem no. 1: What should be done
    Problem no. 2: A very important question to finance specialists in poland
    Problem no. 3: Inconsistency of Deutsche Bank procedures of foreign currency loans handling
    Problem no. 4: Calculations before granting a CHF denominated loan
    [2021-07-14] One more inquiry about the balance clause in the annex
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