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Do you want to get a personal loan in Germany? If yes, then this article is for you. In this guide, we'll discuss the different types of loans in Germany, how to find the best loan offer, and what to consider when getting a personal loan in Germany.
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Mortgage: Try this free online mortgage calculator to estimate whether you can get a loan and what the interest will be. The broker can then compare and explain the best loan offers for you.
Peer-to-peer (P2P) lending: Lending from other private investors. Try this if you don't qualify for a bank loan (don't have a good credit rating or belong to a risk group).
Microloans: Microloans with terms of 1 to 3 months. Just for small temporary needs until the next paycheck comes. You can get this loan even if you don't have a perfect credit rating in Germany.
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Read on for more details above about each loan provider in Germany. Learn how each loan works and which one is best for you.
Please note that the information in the table above and in the sections below is accurate at the time of writing. Offers from German loan providers may be changed at any time in the future. Check the loan provider's website directly for the latest information.
There are many reasons why people take out personal loans in Germany. According to a 2020 survey, the number one reason is to buy a car or motorcycle. Other popular reasons include buying furniture, electronic equipment and appliances.
14% of respondents obtained a loan to finance their real estate. A less common reason to get a personal loan in Germany is to spend on hobbies or holidays, such as birthdays or weddings.
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Foreigners can obtain personal loans in Germany. While it may be more difficult to get a loan in Germany if you are not an EU citizen, you can get a loan as long as you meet the requirements.
If you want to get a personal loan in Germany, you must be at least 18 years old.
To get a loan in Germany, you need to live in Germany. Your address must be registered with the local authority (Bürgeramt or Einwohnermeldeamt).
Non-EU citizens are more likely to get a loan in Germany if they have a permanent residence permit. This is because banks want to lend to people who stay in Germany for a long time.
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If you have a limited residence permit, it is more risky for banks to lend you in Germany. You can still get a loan if your residence permit covers the entire loan term. However, the bank may charge you a higher interest rate.
You need a German bank account to get a personal loan in Germany. If you already live in Germany, this shouldn't be a problem.
Also check out this article for some free or cheap bank accounts in Germany with English services: Opening a Bank Account in Germany – 6 Best Bank Accounts with English Services
If you want to get a personal loan in Germany, you should have a regular income. Your income should be enough to pay the monthly loan.
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To prove this, you will need to show the bank your payslips or bank statements from the past few months. This is why it is more difficult for self-employed persons or students to obtain loans in Germany without a stable income.
If you have a job, you must pass a trial period to get a loan in Germany. The trial period is usually 6 months. It's too risky for a bank to lend you a loan because you can easily be fired during this time.
Banks are also at greater risk if you have a limited employment contract. In this case, you can only get a loan with a repayment period during the term of the employment contract.
SCHUFA is the German credit agency that collects data and calculates your credit score. Getting a loan in Germany will be more difficult if you have a poor credit score. Most banks don't want to give you a loan. You can still get loans from other credit institutions at higher rates.
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This can be a problem for foreigners as they do not yet have a good credit score in Germany. To learn more about SCHUFA and how to improve your credit score, see: What is SCHUFA: How to get SCHUFA in Germany?
To apply for a loan in Germany, you must also show your passport or ID. You can verify your identity by showing your passport at the nearest post office (PostIdent). Or you can use VideoIdent, which allows you to verify your identity at home using your smartphone or computer.
If the bank thinks you are at risk, it may ask you for additional securities. These can be your assets as collateral or guarantors who agree to repay the loan if you are insolvent.
Installment loans are also known as consumer loans. This is an unsecured (unsecured) personal loan.
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As a guarantee from the bank, your loan agreement usually states that if you don't repay the loan, the bank can get the money directly from your employer.
Instant credit is an installment loan. You can use instant credit for any purpose. The advantage of instant credit is that you can get the loan faster (that's why it's called "instant"). But the loan amount is usually smaller.
This is also called a payday loan. If you have some money, you can use the loan until you receive your next paycheck.
This is another installment loan. The difference is that you can only use this loan to buy a car. A car loan is a secured loan. Car loans have lower interest rates because the bank can use your car as collateral if you can't repay the loan.
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You can arrange a line of credit at a bank where you can borrow money quickly. First, you will agree with the bank on a line of credit. You can then withdraw money anytime within that credit limit.
You don't have to borrow all the money from your line of credit. Instead, you can use as much or as little as possible within your credit limit. You only pay interest on the funds you borrow at variable rates.
If you have a checking account in Germany, your bank may allow you to overdraw your account. This is called an overdraft. You agree to the bank's maximum overdraft amount. You can then overdraft your account balance as needed at a fixed rate.
A credit card loan works like an overdraft facility. If you have a revolving credit card, you have a line of credit to draw on. You can use your credit card to buy or withdraw cash and then pay the amount. Usually, the amount can be refunded in full or in installments. If you pay off your debt in instalments, the interest rate can be very high.
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If you have more than one loan, you can save money by consolidating them into one larger loan. Interest rates are usually lower when you consolidate your loans. Plus, it's easier to keep track of your finances since you only have to make one loan payment instead of several.
You can use funds or stocks in your account as collateral for a mortgage. The mortgage amount depends on the value of your securities. You can use your mortgage loan for any purpose. Banks have the right to collect your collateral if you are unable to repay your loan.
You can use a mortgage to finance your property in Germany. Banks use your property as collateral. So, you can get quality loans with low interest rates. There are many different types of mortgages in Germany. For example, annuity mortgages, interest-only mortgages, building mutual loans, etc.
Foreigners may be confused at first. If you want to know more, I wrote an article about it
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