How to get a loan
At first glance, the question is how to get a payday loan, rather amusing. The borrower uses a credit comparison, looks at which bank offers the lowest interest and completes the application. Although he has a loan, it is questionable whether he has the loan that suits him best.
The loans differ not only in the amount of interest or the possible loan sizes and repayment terms. There are still subtleties in the differences. If you want to take out a loan and want to be sure that you have found your best individual solution, you should pay attention to a few points.
The loan application is quickest if the bank offers Visual Indent, so the entire application process can be processed online. In all our comparisons such as the payday loan comparison or the car loan comparison you will find a checkbox " Visual-Indent " under " advanced options ". If you click on these, you will only be shown the banks whose loans incl. Visual Indent can be requested completely online.
Take credit - the two-step process
Borrowing is two-tiered:
- Shopping comparison
The more detailed the offer comparison, the greater the intersection between demand and supply. Therefore, a borrower should pay attention to the following points:
- product features
- repayment period
Only when it has crystallized out, which offers come into question, it makes sense to go into the application process. First, we list what to look for when you want to take out a loan. Afterwards, we describe how the application process works.
Of course, interest rates play a major role in credit selection. There are, depending on the bank, two main criteria for the interest rate:
- A uniform interest rate for all credit ratings, loan amounts and maturities.
- A credit-based interest rate that does not take loan amount or term into account.
In addition, the market also offers conditions that combine the criteria in the second case. This detail becomes apparent upon closer inspection of the provider.
In the case of interest-based interest rates, the Price Indication Ordinance (PAngV) stipulates in section 6a that the provider must name a two-thirds interest rate. This interest rate indicates which maximum APR must be paid by two out of three customers.
For the comparison, the annual percentage rate should always be used. This takes into account all costs incurred in connection with the loan. The over the term "bonded debit interest" has only limited informative value.
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Important: If the loan is backed by a residual debt insurance, the costs are not included in the annual percentage rate. If the bank cooperates with the lowest interest rates with the most expensive insurer, the monthly burden is probably higher than with a medium-term bank and a rather low-cost insurer.
For a normal payday loan or car loan, we always recommend the editorship as the editorial office without any residual debt insurance, as this quickly increases the cost of credit by up to 20 percent, as our calculations later on this page show. In the case of mortgage lending, on the other hand, the conclusion of a credit insurance is, in our eyes, obligatory in order to avoid having to move out of the financed real estate in case of emergency.
Interesting is the consideration of whether the two-thirds interest moves closer to the lower limit or closer to the upper limit. On the other hand, this consideration is also critical to see:
At least the applicant can roughly estimate where he will be located approximately at the respective provider.
Product features include things like loan size, duration, purpose and audience. The lowest loan amounts range from 1,000 euros to 5,000 euros. The lower the credit requirement, the smaller the circle of eligible banks. The size of the loan differs between institutions in denominations:
- Loan steps in increments of 1,000 euros
- Loan steps in increments of 500 euros
- Loan steps in increments of 100 euros
- Individual determination of the loan amount
The range of the maximum loan amount ranges from 35,000 euros to 100,000 euros. The majority of banks maximize to 50,000 euros. In terms of maturity ranges from six months to 120 months. The market average is 12 months minimum duration and 84 months maximum maturity. The gradations also reflect institutional differences
- Duration can only be selected in steps of twelve months
- Duration selectable in six-month increments
- Runtime selectable in 3-month increments
- Continuous choice of term, including 37 months or 53 months
The purpose of use is of particular importance. If the loan for the purchase of a car, whether new or used to be used, a special car loan is recommended. This scores with cheaper interest rates than a loan without earmarking.
Without purpose, but also a target group-specific loan is the civil service loan. Since civil servants are not terminable, there is no risk for the bank that the loan becomes distressed because of unemployment. This circumstance is passed on to the borrower in the form of lower interest rates. Some banks do not accept self-employed as borrowers. This significantly restricts the choice of appropriate credit to freelancers and traders.
- It may happen that the borrower could prematurely repay the loan in full or in part.
- It may also be the case that there is a liquidity shortage and the borrower can not raise the rate.
Anyone who knows before the conclusion of the loan that he wants to make special repayments is in good hands with a bank that waives the prepayment penalty. With a remaining term of up to twelve months, this amounts to 0.5 percent of the remaining debt, with a term of more than one year one percent.
Depending on the bank, special repayments in the amount of 50 percent, 90 percent or a complete repayment before the end of the term are possible at no cost. However, some banks do not offer this service.
Anyone wishing to counteract the risk of faltering repayment is in good hands with a bank that has already agreed on installment breaks. These can be one-time, but also possible once a year.
A look in the imprint of the provider shows who this name for the case of a conciliation procedure. However, some credit intermediaries also point out that they are not participating in any arbitration process.
With the service, it's just such a thing with online loans. Are the employees easily accessible by phone? Are the employees competent or do they have to keep track of every question in the department? Are the contact details clearly visible or only embedded in gray text on a white background in the imprint?
These are not factors that will later affect the installment and thus the cost of the loan. But most consumers feel better off when the seller, in this case the bank, demonstrates expertise.
Does the provider give a full explanation of the loan or is it limited to "requesting a loan" and a loveless, confusing application?
Apps determine more and more our lives and with it the banking business. Positive is to be evaluated as a service feature if the customer can also view his loan account while on the move using an app.
Another service aspect is the cancellation period. Legally, it is fixed for 14 days. However, some banks have extended these to 30 days. If the loan can be repaid prematurely at any time without a prepayment penalty, the revocation period is irrelevant.
Who is not annoyed when he is looking for something on the homepage of a company and will not find it, even though the information "must be there"? It is similar with the online presence of banks with the General Terms and Conditions (GTC) and the price list. While some institutions place the link to this information prominently and prominently, one can believe other banks have something to hide.
But this is not just about the documents of the banks. It also raises the question of what documents a bank would like to see from the customer if they want to take out a loan. Some companies require the bank statements of the last eight weeks and the last three salary certificates. Other banks are technologically so far that they offer the customer to take even his own access to his current account and thus spare him any photocopy.
After explaining what consumers should look for in order to get the "right" credit, we now describe the application process, which is almost identical for all banks. First of all, it is important to clarify the requirements if you want to take out a loan.
- Age: The law requires a borrower to be of legal age. Loans to minors are prohibited.
- Residence: The applicant must prove his residence in Germany.
- The bank account: The prerequisite for a loan is a bank account with a German bank, from which the loan installments can be debited.
Case by case requirements
- Profession: Some banks only grant loans to persons in permanent employment. The employment relationship may not be in the probationary period and may not be limited in time. If the latter is not the case, the repayment term must be shorter than the remaining term of the employment.
- Self-employed: If a self-employed person wants to take out a loan, in many cases he has to include a second applicant who is permanent or who proves that he has a regular income such as pension income.
- Collateral: As a rule, the bank is satisfied with a salary assignment. Since this is not possible for the self-employed, they must provide or at least prove other collateral.
In all cases, the applicant will now receive directly his offer with the provisional loan commitment on the screen. Only an intermediary makes an exception, saying "thank you" and pointing out that the potential customer is being contacted by a sales representative.
At this point, the gap between technologically backward banks and those that are at the height of the technically feasible diverges. There is actually another bank that delivers the loan application by mail. In most cases, the applicant can access the documents as a PDF and print or receive them by e-mail. Together with the application, the bank also sends a list of the documents to be submitted. The documents also contain the general terms and conditions and the product information sheet.