Many of us were certainly in a situation where we had to take out a loan. Perhaps the loan was urgently needed to escape a financial emergency, or maybe even for a larger purchase. Every year millions of people across Germany apply for loan agreements in different amounts. There are many reasons to take out a loan, but for what purpose are loans most often taken in Germany and how does the application process work?
What types of credit are there?
Before we look at the most common reasons for borrowing, let’s first look at the main loan options. As a rule, it applies that almost all loan variants can be summarized under the term installment loan. The borrower negotiates a loan amount with the lender and a period in which the borrowed money is repaid in previously agreed installments. Although all loan options actually work on the same principle, we will briefly explain the most important loan types here:
- Lite Lender: Is very popular in Germany. It convinces with minimal processing times and the payment of the requested amount of money takes only a few days.
- Small loan: Is optimally optimized for lending small amounts of money, whereby the terms are also minimal.
- Consumer credit: This includes all loans taken out to make private investments. It is also often called the preferred loan.
- Debt restructuring: This type of loan is used to consolidate existing loans into a new, usually cheaper loan.
- Overdraft facility: is a very flexible but also cost-intensive type of financing. The overdraft facility is granted by banks so that the customer can overdraw his account balance. The credit contributions can be structured flexibly, with each customer being assigned an individual credit line, which is generally based on their monthly income.
- Car loan: For the repair or purchase of a new vehicle.
- Official loan: This is a special loan option for everyone who works as an official or in the public service. The civil servant loan is characterized by very favorable conditions and low interest rates.
- Home loan: Usually taken up for the renovation or furnishing of your own home.
- Credit without Credit Bureau: This special loan option is granted at Credit Bureau without a credit check. In many cases, the interest accrued is much higher than for loans with a credit check. You will find a list of reputable lenders and intermediaries in this area here with us or at Smava.de in a practical calculator.
The life of a borrower in numbers
Current statistics show that around 50 percent of people apply for a loan before they turn 30. Around 20 percent of this age group has an unfavorable overdraft facility with an average amount of almost 3,000 dollars among the 33-year-olds. In the age group of 40-year-olds, around 44 percent of people pay off an installment loan, while among 63-year-olds loans for debt rescheduling top the list with 40 percent.
Most popular loan options
Loans to reschedule the list clearly. Such a loan offers several advantages to people who have to pay off several loans at the same time. With a debt rescheduling loan, all current loans are combined into one sum. This total amount is then lent to the borrower for payment at a uniform interest rate. This has the advantage that the borrower gets a better overview of his debt situation.
Home loans are also at the top of the list of the most popular loans. Such loans are usually taken out for renovation or modernization work on your own four walls. Car loan is extremely popular with borrowers of all ages. The examples above show that there are many different reasons to take out a loan.
From offer to payment: This is how the loan application works
As a rule, the application process for a personal loan with each bank follows the same pattern. A particularly convenient way to apply for a personal loan is through the various online providers. Most of the time you can get loans from them at better terms than at the local bank branch.
- 1. In the beginning, it is about choosing a loan that is optimally tailored to your personal requirements and needs. The best and fastest way to do this is to search on an online comparison portal for personal loans. All you have to do is enter your individual parameters to get a list of the best and cheapest loans.
- 2. If you have decided on one of the offers, you should first check the applicant. This check usually takes only a few seconds and is initiated after you have entered your personal data.
- 3. If the initial examination turns out to be positive, you can complete the loan application by printing out and signing the documents.
- 4. You now have to verify your identity. In most cases, the PostIdent procedure is used for verification. You go to a post office with your ID documents, where an identity check will take place and all documents will be passed on to the lender.
- 5. After all documents have been received by the lender, all information is checked again. If this is positive, the loan amount will be paid out.
A good loan on favorable terms is definitely worth it. This thesis is also supported by the number of current loans in Germany. The subtle difference is always in the offer. Nowadays, top loans can be found with minimal effort, which offer enormous potential for cost savings.