Personal Loan Germany

Personal loan comparison: In 3 steps to a personal loan in Germany

Step 1: Compare!

The market for installment loans is huge and the offers differ not only in the interest rate. To find the cheapest loan in Germany, use the non-binding loan comparison on this page. Simply enter the desired amount, the term, and the intended use. For a meaningful comparison still, some personal information is necessary. You will then receive selected offers based on your information.

Step 2: Select an offer!

Now select the personal loan that appeals to you most and submit the application directly online.

When comparing personal loans, pay attention to rate details such as unscheduled repayments – an unscheduled payment to repay the loan. The effective interest rate is also important. It contains all fees and additional costs and thus indicates the total cost of the loan in percent.

Step 3: Receive money!

After verifying your identity and the required documents, you will receive your personal loan agreement from the provider or bank via email. Once you have signed it, the bank will transfer the money to your account.

How does the legitimation for personal loans work in Germany?

For a bank to know who the borrower is, it needs proof of identity. There are two ways to do this:

1. The VideoIdent procedure

Another form of legitimation is possible from home – using a computer, tablet, or cell phone. In this way, borrowers can prove their identity in just a few minutes.

2. The PostIdent procedure

At a Deutsche Post AG branch, an employee performs the legitimation for the bank. He uses the identity card or passport presented to document the personal details. Now the customer’s signature is missing and the legitimation is already on its way to the bank by mail.

Frequently asked questions for your personal loan in Germany

Can I obtain a personal loan despite a SCHUFA entry?

Under certain circumstances, banks also grant personal loans to people with a SCHUFA entry. If you have paid your bills on time in the past, this can increase your chances.

What documents do I need for a personal loan?

When applying for a loan, the bank usually asks for at least the last three salary statements and a self-disclosure. It also needs proof of identity with a valid identification document and proof of creditworthiness. A pension certificate or a guarantee may also be required. If the personal loan is intended to pay off other, existing loans, the bank will also want proof for these.

How do I calculate the monthly installment of the personal loan?

Three variables change the repayment and interest rate of the private loan: the loan amount, the term, and the interest rate. The bank calculates the rate so that at the end of the term both the agreed interest and the personal loan amount are paid in full. This means that the longer the term, the smaller the rate. The higher the sum, the higher the rate.

If the borrower chooses a term of 48 months for a loan amount of 10,000 euros and an interest rate of 2%, the loan installment is around 217 euros per month. For 50 months, the rate is reduced to about 209 euros and for 62 months to about 170 euros.

How much personal loan can I afford?

It is worthwhile to compare your individual income and expenses. As a result, you get what is left over from your salary each month. This remaining amount represents the possible amount of an installment. With the personal loan comparison, you can quickly find out what rate is necessary for your desired loan in Germany.

7 typical credit application mistakes and how to avoid them

Mistakes can quickly creep in when applying for a personal or private loan. Good preparation, no hasty decisions, and knowing your credit rating is important.

Mistake 1 – Not knowing one’s credit rating

Creditworthiness plays an enormously important role in the granting of personal loans. It determines not only whether you get a loan, but also at what conditions. The better your credit rating (also called creditworthiness), the higher the probability of personal loan approval and the approval of low interest rates. If you are well prepared for credit negotiations and have already actively checked and improved your creditworthiness, you will have a clear advantage. Have a look at this article on how to check your Schufa score in Germany.

Mistake 2 – Not comparing

There are countless online loan comparison calculators that allow you to compare the best offers from different providers in Germany. These include not only banks and lenders, but also other institutions such as electricity companies, mobile phone providers or the like. Not informing yourself about different options can cost you money.

Mistake 3 – Misjudge the financial situation

A personal loan in Germany and its repayment can be a lengthy story, especially if you want to finance something big like a property. So a detailed and, above all, realistic financial plan is essential. Create a budget that lists income and expenses, plan the repayment and don’t overextend yourself. 

Mistake 4 – Only pay attention to a favorable interest rate

Low interest rates and fixed interest rates are attractive, that’s for sure. However, a typical mistake when applying for a personal loan in Germany can be not finding out about unscheduled repayment options and thus being tied to a loan for an unnecessarily long time. Since the goal is always a quick repayment, you always benefit from unscheduled repayment options. You can use surprising surpluses of money such as Christmas or vacation bonuses, inheritance or tax refunds to pay off the loan further or to repay it completely. Conversely, with some loans it is possible to take a break from installments if the financial situation is difficult.

Mistake 5 – Not specifying a purpose

In fact, specifying a specific purpose can increase the chance of getting the personal loan and more favorable conditions. In this way, you signal to the bank exactly what the money will be used for. Last but not least, real estate or vehicles can serve as collateral for the bank and thus act as double security for the lender.

Mistake 6 – Taking out loans alone

Even those who are not married can take out loans as a couple. And it really pays off! With two earning borrowers, the bank is doubly secured, which increases the probability of acceptance and the chance of better conditions. In this case, it is important that the second borrower also has a regular income, which could be seized in an emergency.

Mistake 7 – Do not insist on condition requests

Before a bank agrees to grant you a personal loan, it checks all your data again and obtains a detailed credit report about you from the credit agency. When negotiating with different banks, you should always insist on the note “condition inquiry” (KK). This is because – in contrast to the credit inquiry – these do not affect your creditworthiness, i.e. they have no effect on your credit rating. So it’s best to avoid this mistake when applying for a loan and make sure that the respective lenders do not make any credit inquiries with the credit agency. 

Summary – Personal Loan Germany

Of course there are many personal loan providers on the market, but we hope this article gives you a good overview about the topic personal loan in Germany. Here is a quick summary of the three steps to get a personal loan in Germany to find the best personal loan interest rates in Germany:

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