Personal Loans For International Students - Although the desire to get a loan in Germany increases every year, only 15.5% of Germans take out installment loans. The three most common reasons Germans take out loans are to buy a car, house or apartment, or to refinance a previous loan. If you need a loan while living in Germany, this guide will help you understand your opportunities to get one, what types of loans exist and how best to apply for one.
Yes, as a foreigner, you can get a personal loan in Germany if you meet the following requirements:
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Depending on the type of loan you are applying for, there are more criteria that the bank or financial institution will consider. In addition, we must point out that the possibility of loan approval is also closely related to your residency status. If you do not obtain permanent residency, you are automatically at a higher risk of defaulting on your loan in full.
Application And Admission
To increase your chances of getting a loan in Germany as an expat, be sure to inquire about loans with a full repayment period during your residence permit. If you're considering a mortgage, there's a good chance you'll be waiting until you get settlement permission.
Retencredit: The most common type of loan where you pay in fixed monthly installments. It is an unsecured loan that is freely disposable and has no collateral backing for the loan. So the loan depends only on your creditworthiness.
Autocredit: This is a fixed installment loan, as described above, but limited to the purchase of a car. So, it's a safe loan with a low interest rate because the car is considered an asset backing the loan.
Quick loan (Sofortkredit): This unsecured loan is usually paid to you within a few days. The amount of credit is usually lower than that of an installment loan, and the interest rate may be higher.
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Mortgage loan (Hypothek, Immobilienkredit or Baufinanzierung): A secured loan for buying, building or sometimes renovating a house or apartment only.
Overdraft credit (Dispositionskreditor shortDispo): This is usually provided along with your checking account, no prior application is required. Most banks set overdraft limits at a fixed rate.
Debt Consolidation (Umschuldungskredit): This loan allows you to combine several smaller loans into one and refinance at a possibly lower interest rate.
If your bank has a lender, the traditional way of getting a bank loan is definitely possible in Germany.
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However, there are now more modern, better, faster and cheaper alternatives. Remember that when looking for a loan, you are only asking for the terms of the loan (
), this will not affect your SCHUFA score and will not be seen by other banks. Actual loan application (
The best way to find an installment loan is to compare different banks through a comparison tool like Verivox or Finanzcheck.
Verivox is only available in German; however, when using Chrome as the browser, right-click and select "Translate page to English".
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You can choose the type of loan and the desired terms; up to 100.000 EUR for a term of up to 10 years. Verivox compares different banks, highlights potential features such as digital contracts, same-day payments, likelihood of payment interruptions, monthly repayment rates and potential interest rates, and gives you direct access to the results. All Verivox inquiries are SCHUFA neutral as they are inquiries about the terms of the loan.
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On the other hand, with Finanzcheck you can also choose the type of loan and the terms you want; up to 150.000 EUR for a term of up to 10 years. However, as a next step, you will need to answer a few questions, such as how much you pay in rent and whether you own a car, in order to tailor the proposed loan package as much as possible to your living situation.
Finally, you must provide your contact details and you will receive a selection of personal loan offers from over 20 banks via email. Of course, these are also Shufa neutral.
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The advantage of Finanzcheck is that you can also get a personal telephone consultation in English if you have questions about various offers.
If you need a fast loan in Germany, you can refer to the high-quality financial online service Cashper. With Caspher you can apply for a loan of up to 1.500 EUR for a period of 30 or 60 days. As of this writing, they also offer a 30-day interest-free loan term!
Although the website is in German, it is very easy to use. The request is also SCHUFA neutral and you will know immediately if your microloan has been approved. Standard payments below take up to 10 days. If you need money urgently, you can get it within 24 hours for an additional fee.
Few people in Germany can afford to buy a house or apartment without taking out a mortgage, which is one of the reasons why Germany is more of a renting country than a property owning country. However, owning a home is still the dream of many people (Germans and expats alike). A mortgage is one of the most complex loans because of the many personal factors that need to be considered.
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Fortunately, two modern companies have been formed in the past few years to offer digital, hassle-free mortgage servicing entirely in English! The two companies are Loanlink24 and Hypofriend. They are all highly rated and completely free for you to use. So, if you want to get a home loan in Germany, be sure to use any of these services!
Crowdfunding loans are becoming increasingly popular in Germany as an alternative to taking out a loan from a bank. You don't borrow money from one bank that has this kind of system, you borrow money from many individuals who invest your money in you at a higher interest rate than if you put it in a savings account.
Oxmoney is one of the largest private loan service providers in Germany, offering loans up to EUR 50.000. The main advantages of getting a peer-to-peer loan are:
Your creditworthiness plays an important role in your seeking a loan in Germany. To better assess your opportunities and costs, know your SCHUFA score and take steps to improve it if necessary. We've written a detailed guide on how to achieve this.
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As mentioned above, there are different types of loans in Germany. If you qualify for a secured loan because you're using it to mortgage or purchase securities such as a car or a house, apply for that particular category of loan because it has a lower interest rate.
If possible, try to apply for a loan from someone else, such as your partner, as this reduces the risk for the bank or lender, which in turn lowers the interest rate.
Calculate the loan amount and term so that you can handle the repayment rate without taking out another loan or affecting your daily life.
As we've highlighted in this guide, it's best to compare loans. Don't accept the first offer from the bank. When comparing loans, be sure to look at the APR.
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We hope this guide has provided you with action steps on how to get a loan in Germany, especially as a foreigner. Remember, we are not financial advisors and borrowing should not be a spur of the moment decision. Before entering into any contract, be sure to use the various loan calculators available from the above companies to assess your financial situation and ability to repay the loan in full.
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Yvonne was born and raised in Germany and has lived in the US, France and Spain. She understands the difficulties of settling in a new home and is happy to help expats start their German experience by sharing simple services and tips on how to settle in your home country. Studying in the US has many advantages, from academics to a reputation for building international relationships. It exposes you to a new culture, gives you access to higher education, and opens doors that were closed to your peers. But, as any foreign student knows, it also presents a unique set of challenges.
Most commonly not eligible for all the same loans and grants as their US counterparts. So, how do international students finance their education? A preferred method is to obtain an international student loan.
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Getting personal loans in the US as an international student can be challenging. When you first start researching loans for international students in the US, it may seem that they are only available to US citizens and permanent residents. However, if your co-signer is a U.S. citizen
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