How to Get the Right Loan: Quick and Easy
Whether it’s for buying a house, financing a car, or starting a business, here are the most common types of loans in Germany and their key features.
What is your goal?
1.Privatkredit or Ratenkredit
The personal loan, also known as an installment loan, is the most popular type of loan in Germany. It’s typically used for personal expenses such as furniture, electronics, or vacations.
- Features: No specific purpose, fixed monthly installments, and terms ranging from 12 to 84 months.
- Institutions: Banks like Deutsche Bank and online platforms such as Check24 offer competitive terms for personal loans.
2. Mortgage Loan
A mortgage loan is designed for purchasing properties or construction projects. Due to the high amounts and long terms, interest rates are usually lower.
- Features: Long-term durations (up to 30 years) and typically require a 20% down payment.
- Institutions: Prominent providers like Commerzbank and ING Deutschland are leaders in the mortgage market.
3. Auto Loan
For purchasing a car, many banks and dealerships offer specific loans. This type of credit is exclusively for vehicle purchases and often comes with lower interest rates compared to personal loans.
- Features: Terms of 12 to 72 months, with the vehicle serving as collateral.
- Institutions: Banks such as Santander and dealerships like Volkswagen Financial Services are popular options.
4. Student Loan
Students can apply for loans to cover tuition fees or living expenses. These loans usually come with favorable conditions and flexible repayment options.
- Features: Low interest rates, repayment begins after graduation.
- Institutions: The KfW Bank is the primary provider of this type of loan.
5. Business Loan
Business loans are tailored for self-employed individuals and companies. They assist in financing operational costs, investments, or business expansion.
- Features: Flexible in amount and term, often with specific conditions.
- Institutions: Banks like Sparkasse and Commerzbank offer customized solutions for businesses.
6. Microloan
A microloan is ideal for covering short-term financial emergencies. These loans usually involve smaller amounts and are approved quickly.
- Features: Loan amounts range between €500 and €5,000, short terms from 1 to 12 months.
- Institutions: Online providers like Smava or Cashper are leaders in this market.
7. Loans Without SCHUFA
For individuals with a poor credit history (equivalent to being “negativado” in Brazil), there are specific loans that do not require a SCHUFA check. However, these loans typically come with higher interest rates.
- Features: Higher interest rates, limited loan amounts.
- Institutions: Providers like Bon-Kredit and Maxda specialize in this type of loan.
Conclusion
In Germany, there is a wide variety of credit options that can be utilized depending on your financial needs and situation.
Whether for a long-term project like buying property or for unexpected expenses, it’s essential to gather information and compare different offers to find the loan that best suits you.
Do you have questions about a specific type of loan? Let us know how we can help!
