In Germany, there are many different banks that offer loans and credits for many types of purposes. Read our explanation on what you need to look out for and how to apply for it. Simply click on the offer that interests you to learn more about the terms.
| Loan Provider | Interest Rate | Maximum Credit Amount | |||
|---|---|---|---|---|---|
 | Smava – Personal Loan Comparison | from -0.4% / year | €120.000 | More Info | Order here |
| auxmoney – Personal Loan | from 5.40% / year | €50.000 | More Info | Order here |
| TARGOBANK – Personal Loan | from 1.75% / year | €65.000 | More Info | Order here |
| Postbank – Personal Loan | from 1.95% / year | €50.000 | More Info | Order here |
| Santander – Personal Loan | from 1.99 % / year | €60.000 | More Info | Order here |
Additional information on personal loans:
- Minimum period for repayment: 12 months
- Maximum period for repayment: 84 months
- Maximum Annual Percentage Rate (APR): 8.66% APR
- Representative example of the total cost of a loan: Net loan amount 10,000 euros, loan period 60 months, number of instalments: 60, amount of each instalment: 183 Euro, total amount 10,971 Euro, fixed borrowing rate p.a. 3.72%, effective annual interest rate: 3.79% (APR).
| Loan Provider | Interest Rate | Maximum Credit Amount | |||
| Smava – Personal Loan Comparison | from -0.4% / year | €120.000 | More Info | Order here |
| auxmoney – Personal Loan | from 5.40% / year | €50.000 | More Info | Order here |
| TARGOBANK – Personal Loan | from 1.75% / year | €65.000 | More Info | Order here |
| Postbank – Personal Loan | from 1.95% / year | €50.000 | More Info | Order here |
| Santander – Personal Loan | from 1.99 % / year | €60.000 | More Info | Order here |
Additional information on personal loans:
- Minimum period for repayment: 12 months
- Maximum period for repayment: 84 months
- Maximum Annual Percentage Rate (APR): 8.66% APR
- Representative example of the total cost of a loan: Net loan amount 10,000 euros, loan period 60 months, number of instalments: 60, amount of each instalment: 183 Euro, total amount 10,971 Euro, fixed borrowing rate p.a. 3.72%, effective annual interest rate: 3.79% (APR).
See the following list for an overview of various personal loan providers in Germany. The prices indicate the minimum interest rate that you will pay, the actual interest rate depends on your individual loan and your credit score. We recommend to compare different banks and loan providers to find the best offer.
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| Loan Provider | Interest Rate | Maximum Credit Amount | |||
|---|---|---|---|---|---|
| Smava – Personal Loan Comparison | from -0.4% / year | €120.000 | More Info | Order here |
| auxmoney – Personal Loan | from 5.40% / year | €50.000 | More Info | Order here |
| TARGOBANK – Personal Loan | from 1.75% / year | €65.000 | More Info | Order here |
| Postbank – Personal Loan | from 1.95% / year | €50.000 | More Info | Order here |
| Santander – Personal Loan | from 1.99 % / year | €60.000 | More Info | Order here |
Applying for a loan in Germany should not be particularly different to other countries. However, there are certain things you should look out for and of course the German terminology for loans and credits.
Sources for loans in Germany could be your personal bank, such as
- TARGOBANK,
- Santander
- Bank of Scotland
- Postbank,
or you could choose an online provider, such as
- Smava
- auxmoney,
- Cashper.
Reasons for taking out a loan or getting quick credit
You might need to pay a larger amount of money for some unforeseen expenses, for example your car needs a repair, your computer breaks or you need an additional car for your spouse who just got a job.
There can be plenty of good reasons why you need a loan at this very moment. However, you need to be sure that you are able to repay that loan and that you have sufficient future cash flows. Otherwise, that loan will just get you into a spiral of interest fees and more loans.
Try to avoid loans for entertainment or consumption, such as going on vacation or getting a new TV. These expenses are not productive, i.e. they will not help you to pay back the money you borrowed. On the other hand, buying a car for your spouse could be very productive: Your spouse might now be able to get to work without a car and could not earn money without a car. With that new car, he or she can take the job and with the salary you will be able to pay back the credit in the future.
Alternatives for loans or credits
Before you sign a multi-year loan agreement with interest fees, consider some alternatives before you actually take out a loan:
- Ask friends and family
- Use your line of credit from your bank account or credit card
- Try to defer the expenses
- Use all funds you can make available from other accounts
- Ask your employer for a loan or an advancement
These options could decrease the amount of your loan or save you interest expenses. The line of credit of your bank account or credit card can be a convenient option for smaller short-term expenses. For long-term loans it could be too expensive due to the high interest rates.
What to look out for when applying for a loan in Germany
The four most important elements of a loan are
- credit volume (Kreditvolumen),
- lending term (Kreditlaufzeit),
- instalment amount (Kreditrate) and
- interest rate (Zins).
These elements are interconnected and can influence each other. If you choose a longer lent term, you will pay smaller monthly instalments but end up paying more in interest. The credit volume can also influence the interest rate you are given. Additionally, the purpose of your loan is also important: loans for buying a house are usually cheaper than loans for buying a car.
Where to get credit in Germany
Your personal bank will usually be able to give you a loan, but these loans are often more expensive that other options. Online loans have become increasingly popular and offer better rates and smaller fees, as they do not have to pay for a local office branch and branch employees. A lot of the credit application is automated: Algorithms in the background will calculated your individual credit risk and decide on your creditworthiness within seconds.
It is definitely good idea to compare some online offers, especially for smaller short-term loans.
How easy is it to get a loan in Germany?
It depends on your employment situation if you will be approved for a loan and for how much. State-employed workers usually have no problems when applying for credit. It is much more difficult for young graduate with limited-time employment contracts and for self-employed consultants or business owners.
Each time you apply for a loan in Germany, the bank or financial service provider will do a background check on you. This background check shows your financial situation, such as your monthly income, the amount of credit cards you have and the amount of different bank accounts. It also shows how often you have changed your registered address in the past, how often you have applied for a loan and many other things. Based on these criteria, the bank will decide on your creditworthiness and approve or decline your credit application. This background check can also be a factor to the interest rate you are given and the credit volume.
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Glossary for German loan terminology
| German term | English translation |
|---|---|
| Absicherungsoption | Option on Payment protection/ insurance |
| AGB (allgemeine Geschäftsbedingungen) | Standard business terms, the conditions of a contract |
| Antrags-, Abschlussgebühr | Application fee: the fee charged by a lender to cover costs associated with processing the loan. |
| Anzahl kindergeldberechtigter Kinder | Number of children you get child benefit. Kindergeld = child benefit, an amount of money that the government gives to families with children |
| Arbeitslosigkeit | Unemployment, job-loss |
| Arbeitsunfähigkeit | Sick leave, disability |
| Ausgaben | expenses |
| Auskunftei, SCHUFA | Organisation that review your credit information and create credit reports that can be checked by lenders to determine your eligibility for a personal loan. (In Germany, your creditworthiness is most likely tracked and recorded by Schufa Holding AG, Germany’s biggest credit agency. |
| Bankverbindung | Bank account, bank details |
| Berufliche Angaben | job data |
| Berufsverhältnis | job, profession; Selbstständig: employee or self employed/ freelancer Arbeiter, Angestellter Arbeiter, Angesteller: Rentner, Beamter |
| Beschäftigungsdauer | Job tenure; if less than 3 Years it will be sometimes necessary to give additional information |
| Bonität | Credit history, financial standing. It is a record of all the borrowing and repayment transaction an individual has undertaken. It is one of the most crucial factors that determine an individual’s eligibility for a personal loan. |
| Credit History: | It is a record of all the borrowing and repayment transaction an individual has undertaken. It is one of the most crucial factors that determine an individual’s eligibility for a personal loan. |
| Credit Report | A credit report is a report generated by a certified credit rating agency showing an individual’s credit history. |
| Credit Score; SCHUFA | A credit score is an individual’s valuation and ability to repay a loan. It is computed based on his/her history of borrowing and repaying. |
| Darlehensnehmer | A borrower is someone who takes a loan from a lender. Just you or an additional borrower (“zweiter Darlehensnehmer”) |
| Dauerauftrag (Automatic bill) payment | It is one of the repayment options for your personal loan. By choosing automatic payment facility, your monthly EMIs will be deduced directly from your bank account on a particular day each month and you won’t have to do it manually each time. |
| Dispokredit | Lines of credit are essentially loans that do not require any kind of security or collateral and are usually offered at variable interest rates. |
| Effektiver Jahreszins | TheAnnual Percentage Rate is basically the overall cost of credit. A loan’s APR is essentially its overall finance charge. It includes the principal as well as the interest component of the loan, and is shown as an annual rate. The APR enables customers to compare various loans with different charges and interest rates. |
| Einnahmen | Earnings; the money that you earn from your work |
| Erste Rate fällig am | The first payment will be due in ... |
| Fester Sollzinssatz | Fix borrowing rate |
| Fixed Interest Rates: | Interest rates that remain unchanged over the tenure of the loan are called fixed interest rates. |
| Fremdverpflichtungen, die man ablösen will. | Replacement of old debt by new debt |
| Gebühr | Fee |
| Gesichertes Darlehen | It is a loan that requires the borrower to pledge assets as security or collateral |
| Garantiegeber / Bürgschaftsgeber | A guarantor is essentially an individual who guarantees that you will repay the loan in full. Lenders usually require guarantors when the credit history of a borrower is not up to the mark. In these cases, guarantors become legally liable for the repayment of the loan. |
| Interest Rate | Interest rates are basically the cost paid by the borrower for availing a loan from a lender. It is a percentage of the loan amount that will have to be paid along with the principal amount every month. |
| Kleinkredit | These loans are unsecured personal loans that can be availed based on your job. They are ideal for financial emergencies. In case you run short of money towards the end of the month, payday loans can be taken for a few days and the repayment can be done once your salary is credited to your account. |
| Kredit-/ Darlehensnehmer | A borrower is someone who takes a loan from a lender. |
| Kreditantrag | Borrowing request, request for a loan |
| Kreditgeber: Bank | A lender is usually a bank or a financial institution that lends money to borrower |
| Kreditgebühren | see effektiver Jahreszins |
| Kredithöhe, Kreditbetrag | The principal amount of a loan is the amount you borrow, exclusive of fees or interest |
| Kreditrahmen | It is the official document representing the terms and conditions of a personal loan. It also includes the rights as well as the obligations of a lender and borrower. |
| Kreditsicherheit, Pfand, Sicherheit | Security as it is also called, a collateral can be any asset that backs your loan. In case you fail to repay the loan on time or continuously default on payments, the lender has the right to repossess the asset you pledged as collateral for the loan. |
| Kreditwürdigkeit | A credit score is an individual’s valuation and ability to repay a loan. It is computed based on his/her history of borrowing and repaying. |
| Laufzeit | It is the tenure of the loan – the time frame given to you to repay the amount borrowed |
| Nachweispflicht | Obligation to produce proof, e.g. copy of an employment contract |
| Nettoeinkommen | net income; the amount that remains after everything has been taken away from it ( e.g. taxes) = monthly net income |
| Persönliche Angaben | personal data |
| Persönliches Darlehen, ungesichertes Darlehen | It is a loan that does not require the borrower to pledge any asset as collateral. |
| Prepayment Fees | In case you wish to repay your loan ahead of schedule, you will be charged a prepayment fee. Not all lenders charge this fee, but those that do levy a charge in order to recover some of the money they were expecting to collect as interest on the loan. |
| Ratenschutzversicherung | Payment protection |
| Ratenzahlung | repay a loan |
| SCHUFA | In Germany, your creditworthiness is most likely tracked and recorded by Schufa Holding AG, Germany’s biggest credit agency. See also Bonität. |
| Sicherheit (dingliche -), Pfand | Something (physical) pledged as security for repayment of a loan, to be forfeited in the event of a default; collateral |
| Sozialversicherungssystem | The social security system in Germany is funded through contributions paid by employees and employers. The contributions are paid on all direct wages as well as indirect wages up to a ceiling. |
| Todesfall, Unfall, Arbeitsunfähigkeit, Arbeitslosigkeit (Wartezeit 3 Monate, (ausgenommen Unfalltod)) | Death, Accident, Inability to Work, Unemployment (special fees for these incidents) |
| Umschuldung | These are loans that can be taken to combine all your debts into one. These loans come with lower interest rates and are ideal if you have multiple loans to repay in addition to credit card dues to clear. They club all your debts under a single umbrella, thereby effectively ensuring that you have only one loan to clear. |
| Unterlagen | Documents, records |
| Variabler Zins | As opposed to the working mechanism of fixed interest rates, floating interest rates are those that keep changing over the tenure of the loan. |
| Vertrag/ unterschriebener Vertrag | contract, deal, here: loan / signed in person |
| Verzug, verspätete Zahlung, Säumniszuschlag | When you delay your monthly payments, it is called late payment and lenders usually charge a late payment fee to customers who do not make their payments on time. |
| Wohnart | Rental flat = Mietwohnung; Wohneigentum = home ownership; living with your parents = bei den Eltern wohnen |
| Wunschkredit | credit amount |
| Wunschlaufzeit | life/period of a loan |
| Zahlungsverzug, Säumnis, Ausfall | In case a borrower does not meet the legal obligations of a loan, he/she is said to be defaulting on the loan |
| Zinsen | Interest rate: refers to the annual cost of a loan to a borrower and is expressed as a percentage |
