It is not uncommon in life that one lacks the necessary money for a purchase or a long-term investment. Then it can be useful to take out a loan. In the meantime, you no longer have to go to your local bank to get an offer for a loan. Today, loans can be concluded completely online.
However, the offer is large and not every lender found here necessarily favorable or reputable. So-called loan comparisons can help here. These are portals that can find the right offer for every potential borrower.
Difference: Direct bank vs. Branch bank
Usually people who need money first turn to their house bank. This makes sense, of course, because in most cases they have been customers there for many years and have had good experiences with their own house bank.
The advantages are obvious:
- One is known as a customer at the bank.
- There are personal contacts who can advise you on your own wishes.
However, loans offered by the house bank are not necessarily always the most favorable. Often, the larger branch banks in particular are quite picky when it comes to making loans.
If you compare the branch bank with the direct bank, the latter lacks direct personal contact, but applying for a loan is much more convenient and in most cases cheaper. It is not uncommon for installment loans to be paid out on the same day.
Although there is no personal contact person, this is usually replaced by a hotline where someone can always be reached around the clock, even on weekends. So it seems like direct banks are where the future of lending lies.
Requirements for a loan in general
If you want to take out a loan in Germany, in whatever form, this is subject to a number of conditions. Not all prerequisites must always be given. Especially when it comes to creditworthiness, banks often make exceptions and grant loans despite lower credit ratings.
We have summarized below which requirements are particularly common.
- Age of majority: Anyone who wants to apply for a loan in Germany must be of legal age. It may not be used until you reach the age of 18. After all, by the time you reach the age of 18, you have full legal capacity.
- Residence: A residence within Germany is also a basic requirement for the granting of a loan.
- Banking: While you don't have to have an account at a German bank to be awarded, it is necessary that the bank operates in Germany and provides a German banking connection.
- Income: A regular income is the basic prerequisite for being able to repay the loan later on. A permanent job is important for this. However, this also means that potential borrowers must not be in training or in the probationary period of a job. For these reasons, the self-employed or freelancers have a particularly difficult time obtaining loans.
- Creditworthiness: the bank granting the loan is required by law to check the creditworthiness of the applicant. Creditworthy is the one who offers sufficient collateral to repay the loan. Such collateral may include houses, savings accounts, or securities.
The information is requested in the form of various supporting documents during the loan application process.
Which loan is required?
Before you start looking for a loan, you first need to find out which type is suitable for you at all. For depending on the intended use or loan amount, there are different loan forms.
While a normal installment or consumer loan can be used freely, car loans, for example, must be used specifically for the next car purchase.
With both forms of credit, however, the sum is usually only in the five-digit range. Depending on the amount, the term may be a few months or several years.
Similar to the car loan, the real estate loan is also earmarked for a specific purpose. It may only be used for houses or apartments. This involves building, buying, renovating or rehabilitating property.
The sums here, however, are significantly higher. Mostly they are six-digit. Real estate loans usually run for several decades until the house or apartment is paid off.
Spoiled for choice on the Internet
People who want to borrow have long turned to more than just their local bank for help. Often the conditions are not optimal: the loans are comparatively expensive and the requirements are high. Meanwhile, direct banks have become a good alternative.
Current figures show that. In the past ten years, direct banks in Germany have gained more than 14 million customers. It is foreseeable that this growth will continue in the years to come. The frontrunners among the direct banks are ING, DKB and Comdirect Bank.
Photo: Bruce Mars on unsplash.com
In addition to these three major players, however, there are many other smaller direct banks that can offer favorable terms for loans. One must be able to find it with the large offer simply only. With the right help, however, this is easy.
Use comparison portals
It feels like new banks are added almost daily. Here it can be quite difficult to keep the overview. This is where comparison portals on the Internet come into play, which can help to compare the large number of different loans with each other. Interested parties not only find the right offer for them, but can also save money compared to offers from branch banks.
This works through the interest rates. According to the German Bundesbank, banks in Germany charged an average of about 5.82 percent interest for a consumer loan in 2020. With certain comparison portals in the net one would have paid in the same year with the conclusion of a credit approximately 35 per cent less for the credit.
It can also be worthwhile to look for loans outside your own bank, and not just because of the possible financial savings.
Advantages of a loan comparison
An online credit comparison can bring a variety of advantages with it.
- In addition to advice from the respective direct banks, comparison portals also offer professional advice from experts.
- The selection of offers by the comparison portals has no influence on one's own Schufa score. Only when the official and binding credit request is made, it is stored at Schufa.
- In the online loan comparison will give a good and transparent overview of the various credit offers, so that they can be compared with each other.
- Often, comparison portals are offered exclusive favorable interest rates by banks, which in turn are passed on to borrowers.
- From the inquiry to the application, everything can be done via the portals without even having to leave the house.
- Of course, the sensitive data of borrowers is protected at all times and is transmitted exclusively to potential lenders.
Secure, fast and inexpensive – the conclusion of a loan can hardly be better.
Conclusion in three steps
In order to obtain the desired loan via a comparison portal, three steps are necessary:
- First the portal is called and the basic data are entered. The type of loan, the desired amount and the term must be entered in the search mask. Personal data is then requested, such as personal details or household income. In the run-up it applies to set up a household calculation. How to find out how much money you have available for monthly repayments.
- Once the data has been entered, the work of the comparison portal begins. The potential borrower receives individually tailored offers based on the entries, which can be compared with each other to find the right loan. It is important to pay attention to the lowest possible APR in order to save costs. Unscheduled repayments should also be possible.
- If the desired credit is found, it is selected directly in the portal. Then it can be applied for there directly completely online.
Submit documents and evidence
In order to properly conclude the loan, some documents must first be submitted online. To do this, you need to enter the data described in point 1. The information entered in the credit application must be supported by the appropriate documents and records. Only in this way the criteria for the loan are met.
The specific documents required for this can be found in this credit agreement. Typically, however, the following evidence is required:
- Bank statements from the last three months prior to the credit application,
- Proof of salary from the last three months,
- Copies of employment contracts as well as
- additional proofs depending on what else the bank needs.
Although it may be difficult to get a loan if you are self-employed, it is not impossible to obtain. You must also submit a copy of the income certificate for the past two years with the loan application.
Retired people enclose a copy of their pension certificate.
All documents can be uploaded online as a digital copy to the comparison portals.
Legitimation also online
In order to complete the loan application, it is also necessary to legitimize oneself. A signature under the application is not sufficient here for security reasons. Fortunately, this can also be solved online via so-called Video-Ident procedure.
Using the camera of the computer, smartphone or tablet, the identity of the borrower is established. To do this, in simplified terms, the respective ID card is held up to the camera and compared to the person.
Credit can then be processed. In the case of a positive decision on the part of the bank, the money is then already within a few days on the bank account of the borrower.
Everything from one source
A loan comparison online can be worthwhile for potential borrowers in any case. Not only can you save money compared to loans from your own bank, but you can also benefit from a much larger selection and find a suitable offer this way.
However, such comparison portals do not only take over a search function, rather they offer a full credit service, from the search, to the consultation to the actual application. Does not even have to leave the house. It could hardly be easier.