Getting a loan: What requirements must be met?

You can usually get a loan from the bank. To do this, fill out a loan application and submit it to a bank of your choice. In order to get the cheapest possible loan offer , it is worth comparing several offers with each other in advance. The submitted documents will then be checked. It is important to the bank that the applicant can repay the money within a reasonable period of time. For this reason, the credit rating and the credit rating particularly scrutinized. Anyone who has a good income, is debt-free and cannot show a negative Schufa entry has nothing to fear. In this case, the risk for the bank is very low, so that nothing stands in the way of lending. You should only be at least 18 years old and have both a German residential address and a German bank account.

However, those who are not quite as liquid have a harder time. However, most people also get a loan if the conditions are not quite optimal. The bank then only needs more collateral deposited to minimize the risk for you. Works of art, cars or houses count as collateral, i.e. assets that lose as little of their value as possible during the term. As a rule of thumb, the higher the loan amount, the more collateral is required. In this way, the bank tries to keep the risks low. But even with a poor credit rating, it is not impossible to get a loan. Here we give you tips to help you along the way, which will increase your chances.

Getting credit depends on income

Income plays an important role in getting a loan. The bank makes the amount of a loan approved dependent on income. A permanent employment relationship and the completion of the probationary period in the company favors you getting a loan. Before you apply for a loan, check how much of your income you can invest in a loan. After all, it is not advisable if you get a loan to be able to afford a new TV or a renovation, but are starving for it. Also, don't calculate too tightly so that you don't get into financial difficulties in the event of unexpected events.

Get credit: what to do if you have a low income?

If you don't get a loan, it may be because of your low income. The bank then fears that the installments will not be paid and that they will not see their money again. We will show you some adjustment screws that you can turn so that you can still get a loan.

Extend the term: If you do not get a loan, you can extend the term of your real estate loan. This reduces the monthly burden because the repayment is spread over several months. Keep in mind that this will also increase interest costs.

Reduce the loan amount: If you borrow less, you also have to pay back less. Reduce your loan amount if possible. You will get a loan more easily.

Compare offers: It pays to compare loan conditions . Get several offers and compare them with each other. Even a few tenths of a percent can save you interest. Note that the conditions such as term, monthly rate and extras such as special repayments should be the same.

Determine guarantor: A guarantor is a person who is solvent and serves as security for the bank in the event of a default. If at some point you are no longer able to pay your monthly installments, the guarantor will step in. So you are both liable for the loan and make sure that the repayment is made on time and in full. It doesn't matter who the actual contract holder is who got the loan. Parents, children or friends can act as guarantors, but also life partners and spouses. Suggest a guarantor to the bank to get a loan if they are 18 years old and have good credit.

If you can't get a loan right away, it doesn't mean it's totally impossible. With the points listed, there is still a chance of a positive loan outcome. It is best to talk to your bank or a neutral financial service provider such as Dr. Small to set up tailor-made financing.

My income is below the garnishment limit

If you want to get a loan, but your income is less than 1,133.80 euros, you have bad cards. The amount corresponds to the garnishment limit. This means that the assets may not be seized up to this limit. A next adjustment of the amount is expected from July 1, 2019. The garnishment-free income increases as soon as there are maintenance obligations. As an example, you can see the seizure exemption limits for one or two dependent persons from the table.

Since the income limits of the banks are different, it cannot be said in general: With X euros, a loan request will definitely be positive. Whether you get a loan depends on the bank, so you should always submit an application.