Many people are curious about taking out a loan in Germany. While there are many types of loans that vary according to personal, home loans or needs, curiosity about how the procedure works is of course increasing. As Vasistdas, we explain in detail the issue of taking a loan in Germany for you. In this article, we will be sharing with you who can take out a loan, types of loans, conditions for taking out a loan, the documents required and where you can take out a loan.
Who can get a loan in Germany?
In Germany, anyone who has a job and knows how to send a message to the bank that “this person will repay the loan” can take out a loan. However, if you are too young or too old, you will have problems getting a loan. For example, you have to be at least 18 years old to get a loan, whereas from the age of 75-80 you may have problems with the banks as you might struggle to proof future income. However, you should know that you should definitely look at your budget when taking out a loan.
Your income, expenses, fixed costs and solvency are the things you need to calculate before taking out a loan. Within the framework of these factors, you should create a loan cost and payment plan for yourself so that you do not have difficulties.
Keep in mind that banks will request precise income statements from you. If you have debts, it will be more difficult for you to obtain a loan. The private market economy and the tax office are closely connected in this process.
Loan calculator in Germany
Loan interest rates in Germany can vary considerably depending on the amount of your loan and the repayment period. Our advice is to get offers not only from your own bank but also from other banks.
You can take a look at the loan rates provided by banks in Germany below and apply for a loan with your own language. Just fill the form in German language, our partners will approach you in English.
With the privilege of Vasistdas, you can get free consultancy for your loan needs in Germany by filling out the form below and evaluate the options of different banks.
What are the types of loans in Germany?
The loan you take out may vary according to your personal needs. When taking out a loan, not everyone benefits from the same type of loan. Comparing the loan types you can also put yourself in an advantageous position by varying the interest rate you will pay.
Let’s look at the types:
Personal loan & Installment loan
It is a type of loan that you can use for a vacation, celebration or to buy a new product. It is one of the most preferred loan types with fixed repayment rates and fixed interest rates. It is called a consumer loan or personal loan in Germany.
Car loan (Autocredit)
As the name suggests, it is a type of loan used to purchase a vehicle. In fact, it can also be called an installment loan used to buy a car. This type of loan is offered to customers directly from the dealer. Before buying a car, it is useful to learn the loan conditions from the relevant bank because interest rates and terms may vary.
It is important to know, that you won’t get the vehicle registration certificate (Zulassungsbescheinigung Teil II) until the loan is paid off.
Student loan
An education loan is used to finance your higher or further education. It is taken out to finance students depending on the loan including university and rental costs, as well as pocket money. Repayment periods for this type of loan are quite long. Mostly the pay back starts when the education is finished.
Overdraft account (Dispokredit)
Overdraft means overdraft withdrawal up to the agreed overdraft amount in the current account. In other words, an extra limit is defined to your deposit account by the bank and you can make your payments up to this limit, provided that you pay it back at the specified interest rate. This loan in Germany (Dispokredit) is not recommended because it has a high interest rate.
Home loan (Immobilienkredit or Hauskredit)
This is a type of loan for the purchase or renovation of a property, either Immobilienkredit or Hauskredit in Germany. This type usually requires collateral. If the debt is not repaid, foreclosure can take place.
Instant personal loan (Sofortkredit)
It is used to take out loans in amounts lower than the amount of the personal loan. Instant loan is a type of loan to which banks usually respond immediately and give a positive or negative response. It offers a much higher interest rate compared to the normal loan interest rate.
Requirements for taking out a loan in Germany
Let’s take a look at the list of requirements to get a loan in Germany. If you do not meet the necessary requirements, unfortunately you will not be able to get a loan. Here are the requirements to get a loan:
- Being of legal age (Most of the time minimum 18 years old)
- Have a residence in Germany (In some loans, this is not a prerequisite)
- Working for at least 6 months (So that you are not in probation period, Probezeit)
- Proving your income
- A good Schufa score
- Collateral (may vary according to loan type and financial situation)
Documents required for a loan in Germany
To take out a loan in Germany, you need to submit some documents to the relevant institution. These documents are as follows:
- Basically all documents confirming liquidity
- Proof of income for the last three months (usually the last 3 months, but the duration may vary according to the request of the institution)
- Bank statements if available
- Documents related to existing loans, if any
- Identity card/registration document, plus documents regarding visa status e.g. Blue Card visa
- Loan application
Where can I get a loan in Germany?
There are many institutions in Germany where you can take out a loan . You can find out about the credit facilities of your own bank that you already use. In addition, you can of course choose reliable banks in Germany such as Deutsche Bank, Commerzbank or Sparrkasse.
For comparison purposes, you can check comparison sites such as Check24, Verivox, Smava, Finanzcheck and evaluate the loan options suitable for you.
Don’t get scammed when taking out a loan in Germany
When taking out a loan in Germany, you should be careful not to fall into the trap of malicious people. On some websites, you may come across advertisements claiming that you can get a loan quickly and without asking for your Schufa.
The fact that the lending institution is located abroad should also arouse your suspicion. It may be difficult for you to apply German law or to resolve problems with your loan. You should also check whether the institution has a contact number that can be reached immediately.
Try to avoid offers that ask for an upfront fee before you take out a loan in Germany. If there is a fee, it should be officially stated in the contract. To be sure use comparison sites or go personally to your local bank and get your informations there.
