For taking out a loan, can be many reasons. Quickly increases expenses by an unplanned investment. The washing machine breaks down or a new car is needed. Reserves have not been formed. What should the consumer now resort to?
Since a personal loan can usually be applied for immediately and, more importantly, without complications, it is one of the most popular and widely used loans. An installment loan for borrowing euros is definitely an option worth considering in some financing issues. Often the money can be found in the account of the borrower within a few days.
Online providers offer a plus here: Money borrow now immediately, offer here many different institutions at favorable conditions, without fees to be able to realize the issue.
Possibilities for borrowing money there are many on the market and the offer is large. Either the borrower borrows a few pennies privately from family, friends or acquaintances, at the bank or via the Internet – The borrower has the free choice of where and with whom the loan should be taken out. But what speaks for and what against one of these variants? A guide for decision-making for the responsible use of money in the form of loan selection is presented below.
When is it profitable to borrow money for a short period of time?
Euro loans are not always profitable for the borrower. In some cases, it is necessary to weigh what makes more sense. Taking out a loan or going without after all. Mini-credit is a good way to get money in the short term as a bridge.
However, in addition to the loan amount, the annual interest rate and the loan term must also be taken into account. Does these "fees" make it worthwhile for the student to borrow money or not? For example, applying for money can make sense in the following cases.
Borrowing euros to pay off the overdraft facility
Who opens a current account establishes in the vast majority of cases a so-called overdraft facility. This overdraft facility allows the account to be overdrawn by a certain amount if necessary, which means incurring debt for the owner. This overdraft limit can, if necessary, be more than 5.000 euros. Unlike other loans, an overdraft facility is convenient – Once it is set up, it does not require any further contract modalities or a SCHUFA query again.
Nevertheless, caution is advised. A Dispo can quickly become a cost trap.
The reason for this is the expensive interest rate of approx. ten percent. Thus, the overdraft facility is above an installment loan in the same amount. Anyone who uses the overdraft facility for several months in a row should, if possible, take out a loan to balance the account and thus pay off the debt more cheaply. The annual interest rate for the same loan amount as well as the installments for the repayment of the mini loan are much more favorable for the account holder than the constant overdrawing of the account.
Special repayments by means of credit around fewer rates to pay
With some credit contracts it is contractually agreed to be able to make unscheduled repayments if necessary, to pay back the loan amount as quickly as possible. For the borrower, this means making an unscheduled repayment that is higher than the monthly repayment installment. From a financial point of view, it may make sense to consider taking out a further loan for making unscheduled repayments.
This is the case when a newly taken loan has better liabilities than the previous one. This also allows you to shorten the loan term. The borrower is finished with the repayment of the euro borrow a few months earlier.
For example, this is the case with traditional real estate financing.
There the interest rate is mostly fixed for at least ten years and is thus bound. In this example, it may be worthwhile to take out a new loan to pay off the loan early. Here the expert speaks of a so-called rescheduling at the end of the Zinsbindung. In any case, it is advisable to ask an expert for advice before taking out a loan to pay off an existing one more quickly. When rescheduling debt, there may be some traps that are not apparent to the layman.
Loan for financing your own car
Besides taking out a loan for a vacation, the car loan is one of the classics in the field of lending. In this case, it is worthwhile to compare special car loan offers with each other. These are often significantly cheaper than normal consumer loans or. Installment loans. In the case of a car loan, for example, the lending institution takes the car as additional collateral, as a pledge, so to speak.
This minimizes the risk of default from the lender's point of view. This results in a lower annual interest rate for the creditworthy person. He has to pay back less than if he does not deposit any security in the form of the car. With the admission of the credit some offerers demand the vehicle title as security in. This is returned to the vehicle owner after full repayment.
Loans for financing studies
For the student wait not only lectures, but also costs for his study time. The costs range from the first home furnishings to a new laptop or a new car. non-fiction literature to a semester abroad. Financially strong students are rather the exception, which is why the desire for financial support is great. This is where the first problem arises: Students do not always have regular and recurring income. For this reason, pupils and students get no chance of a mini loan to bridge a financial bottleneck immediately.
Nevertheless, students can resort to special credit offers and borrow euros. One of the best known is the education loan, which students can take out despite BAföG. The two variants are processed separately from each other and thus by the one the other is not excluded. Especially the education loan offers a very favorable interest rate. In addition, other benefits are available to suit the circumstances of school and university students. For more special student loans, it is worth taking a look at the offers of the KfW here.
Requirements for a mini loan
To take out an instant loan, there are some requirements to be met. These are valid both at the branch bank and for the way via the Internet.
- Age of the borrower: as a borrower, the minimum age of 18 years is mandatory to get money. That means, the borrower must be of age, because with it they are only fully legally competent. From an increased risk due to death, beacons assume mostly with seniors. Therefore, it is only possible, if at all, for pensioners to apply for a mini loan that must be repaid before a certain age.
- The place of residence: A permanent residence within Germany is without exception a prerequisite to receive immediate payment. This is the main residence, since a secondary residence is not sufficient for taking out a loan. The borrower must be immediately available and liable in the event of late payment. This is not guaranteed in the case of a permanent residence outside the country.
- The employment relationship:Especially in this area, there is some information to consider. If the borrower is within the probationary period, it will be difficult to take out a mini loan, because the risk of default is too high for the lending institution. The borrower could lose his employment within the probationary period without giving any reason and thus not be able to pay the installments for months after the disbursement. Therefore, at least a permanent employment is often a credit requirement. Here, the borrower immediately receives a loan commitment if the term of the loan agreement is shorter than that of the employment contract.
For the self-employed, borrowing becomes a challenge. Within the first three years, an immediate personal loan is excluded due to the existence of a new business. After this time the income remains nevertheless badly calculable (see next point).
- Proof of regular income: In order for a credit institution to be able to check creditworthiness, proof of income must usually be submitted when applying for a loan. This verifies to the lender that your income, minus existing expenses, is sufficient to make repayments on time. Employees are usually required to immediately provide two to three months of salary records for consumer loans. Here, too, the situation becomes more difficult for self-employed persons. Since no salary statement is available, self-employed persons must even prove the income of the past two to three years by means of a business analysis (BWA), profit and loss statement (P&L) or the income tax statement.
- Checking the SCHUFA: Banks in particular carry out a strict credit check before granting a loan. In the process, they obtain a credit report from SCHUFA. Reason for this is the examination of the payment behavior in the past, as well as the indebtedness degree of the borrower. Creditworthiness is expressed with the help of the so-called SCHUFA score. A sufficient creditworthiness for the approval of a loan, represents for credit institutions a SCHUFA without negative entries. Some institutions now offer loans without SCHUFA query. This is associated with higher interest rates.
- Immediate proof of security:If a higher amount of money, such as z. B. In a construction financing, needs, some credit institutions require so-called collateral. This is especially the case with long fixed loans over months and high credit volume. Here, the conclusion of a residual debt insurance is often required or a security in the form of a life insurance or risk insurance. With a real estate financing the real estate is taken as security, with a car credit the acquired vehicle. If no collateral is available, a guarantee can serve as security. In the case of relatively small amounts, collateral does not always have to be available when the loan is granted in order to obtain an immediate commitment and approval.
The fewer requirements are met by the borrower, the lower the chances of obtaining a loan.
Private money lending for the fulfillment of desires and immediately build up liquidity
Short-term borrowing a few euros from relatives, friends or acquaintances is a good way to get money without SCHUFA check or entry.
However, this type of money lending is also associated with risks for both sides, for example, if the lender suddenly and fully reclaims the sum or the borrower can no longer pay his debts. This type of lending is done on the basis of trust between the two parties.
Advantages and disadvantages of private money lending
For a better decision on whether or not a private loan from family, friends and acquaintances makes sense, consider the pros and cons in more detail.
This speaks for a money loan from a private person for a private person:
- Basis is the relationship of trust between the two contracting parties
- Reduced costs and time
- No credit check (Formal)
- Less effort (request, application process, verification, loan agreement, etc.). are usually omitted or simplified)
- Loan amount immediately available
That speaks against a money loan from private individuals for private individuals:
- Risk of the relationship between the two parties to the contract being strained by the credit
- Lender can demand a sudden repayment of the loan and this immediately in full amount
- The lender runs the risk of not getting back all the money he has lent
- Lender can not always adequately prove and represent his legal claim to repayment
- Break of the friendship due to disputes to the credit
In summary, it can be roughly said that the supposed advantages can quickly become disadvantages. Here is an example: A married couple borrows money from the wife's parents for the house. Finally, divorce occurs and the personal loan becomes an additional burden for all persons involved. What share must the husband pay back to the in-laws and by when? In what monthly installment? Does the man pay back at all? These and still many further questions must be clarified in this case additionally.
For this reason, it is important that both partners create a secure framework for lending money in advance. This applies as much to the person who needs the advance as it does to the lender. Recommendable and almost urgently necessary here is a simplified loan agreement. A fixed contract of the two credit partners usually helps to avoid unpleasant and burdensome surprises.
Borrowing at the (house) bank branch
The first point of contact that comes to mind when seeking a loan is usually a visit to a bank or credit card company. Branch Bank. Provided it is locally still a bank branch of their confidence available, since many financial institutions must close a part of their branches. Especially in the case of an offer from the bank, a detailed review of the provisions and obtaining several offers from different banks plays a major role.
Advantages and disadvantages of bank loans
The branch bank can score positively with many characteristics and is therefore also a better alternative for an immediate credit, as the private money lending. Nevertheless, the counterpart some important negative points to be aware of.
Per branch bank:
- Contact person on site
- Personal consultation
- Individually adapted advice
- Available room for negotiation
- Greater flexibility in the granting of conditions
- Possibility of reacting more flexibly to problems and if necessary. To be able to suspend the installment
Contra branch bank
- Contact credit department not always on site
- Faulty advice possible
- Fewer opportunities for comparison with other banks
- Mostly noticeably higher interest rates than, for example, with an online bank
- With inclusion of unnecessary credit modules
- Attempting a package deal: If you as a customer want better conditions, then you also have to take out this insurance with us
- Overloading the customer with too much information
Obtaining a loan offer at the branch bank is especially suitable for people without confident use of the Internet and for people who like to have a personal contact on the spot. Everyone who wants to take out a loan at the branch bank is aware of the often higher interest rates than with an online loan and accepts them. Meanwhile, some branch banks offer favorable credit offers on their respective websites and can be applied for directly there. Thus, even the customers of a branch bank may possibly benefit from a more favorable interest rate and possess the possibility of the claim partner on the spot. A comparison with several banks and the respective conditions is nevertheless advisable.
Meanwhile, almost everyone owns a smartphone, tablet or PC. The Internet is ubiquitous and is used in many ways to get cheaper deals, such as booking a vacation or electricity contract. Why not use this opportunity to get a quick loan with instant approval?
This form of borrowing money is probably one of the fastest and most popular in Germany. With just a few clicks, the application can be submitted immediately and the interested party receives an instant approval
Advantages and disadvantages of online loans
Borrowing money in the form of a mini loan is always associated with advantages and disadvantages. Therefore, as with any type, the criteria should be carefully reviewed.
- Comparison of several providers at a glance
- Often lower interest rates, due to low ongoing costs
- Better conditions
- Application can be made from the comfort of your home
- Fast processing of the loan application
- Money is paid out within a few hours
- Online or telephone support around the clock
- Confusing online jungle
- Danger of comparing too many providers (excessive demands on the borrower)
- No personal consultation
- Online or phone support may be less responsive to personal needs
- Less room for negotiation: no chance to use arguments to avert the threat of rejection
Especially when comparing online loans, choosing a lender involves research. After the selection of his desired product, should be briefly checked, which institute it is to be protected from bad surprises.
Nevertheless, it is the wide range of providers that makes an online application worthwhile. Especially if the money is needed now and no long waiting times or trips to the branch bank are possible. On the Internet, the borrower gets a mini loan with fewer fees and a low annual interest rate with a good credit rating.
Step by step to the loan
In order to successfully take out a mini loan, several steps must be followed. This also applies to admission via the Internet. Here is a little guide to follow:
- Determine loan amount correctly:When determining the need for the correct loan amount, the first mistakes can already creep in. Basically, the first thing that needs to be determined is the funding requirements. This means the money needed to the existing capital: Total costs minus because existing money. Financing needs also provide the basis for comparing loans with providers.
- Prepare budget calculation:To determine the possible monthly installment, the budget calculation is an important component. In the budget calculation, all income is determined and compared realistically with the expenses. The difference from this, represents the credit available each month. This can be used for repayment. The branch bank or even an online bank always makes a budget calculation when applying for a loan. Beforehand, it makes sense to carry out this task yourself in order to get an overview of whether the desired loan amount and the rate are really realistic.
- Compare providers with each other:For finding the optimal condition to the credit, should always take place a provider comparison. For this purpose, so-called credit calculators are available on the Internet. In this first the framework data are seized and a clear representation of the best offers with one another spent. For this purpose, in addition to the loan amount, the desired term must usually also be specified for the calculation.
- The application:Once the optimal offer has been found to the conditions, the loan application must be submitted. The application contains virtually all the relevant data about the loan: in addition to the financing needs, the purpose, the term and the interest rate are also indicated. The required documents, such as proof of income, must be submitted with the application. On the basis of this, the information is checked for correctness.
- Legitimation, application verification, SCHUFA query: In this step, the type of institution is Crucial. With a branch bank the legitimation takes place locally by means of the submitted identity card or the passport. Online institutions often verify the identity by means of the PostIdent procedure. For this, the applicant is checked from the letter carrier whether the identity is correct. In the background, the credit institution queries SCHUFA for relevant entries so that creditworthiness can be established. This is a so-called credit check. If the application, legitimation and creditworthiness are in order, the loan is approved.
- The money is disbursed: only when the loan is approved, the payment of the euro borrow is made within a few days to the account of the applicant. The money can now be disposed of.
Important information for borrowing
Now Euro borrow is often not so simple. On some conditions the attention should be particularly directed. Speaks the loan of a credit, he speaks mostly of a classic installment loan. This is characterized by three features: the amount of the loan, the term and the interest rate.
From these three factors, the monthly repayment rate is determined, which the borrower must pay back to the financial institution. This will open an additional account for the loan. Thus, the remaining debt can always be read accurately. Decisive for the costs incurred by the loan is the interest rate. Together with the desired term results how expensive the respective loan is. Favorable interest rates are determined by a low interest rate. With just a few clicks, online loan calculators can compare terms and their impact on loan payments. This guarantees that they will receive a favorable loan.
Increase your chances of getting a loan
The loan is to be taken out, but the credit rating is not sufficient? No problem, because there are some factors and variations that increase the chances of approval:
- Two borrowers instead of one: if two borrowers are listed in the loan agreement, this can increase the chances of approval. Two borrowers minimize the risk of default. Many banks now require married couples to apply for credit together. Applying for a loan from married people without a spouse can even be a problem here. Another possibility is the registration of guarantees of third parties.
- Additional collateral: In addition to life insurance or your own house, your own car can also be deposited as collateral for certain types of loans. It is now easier to get a loan with the help of a letter of assignment.
- Employment relationship: If, despite a poor credit rating, a regular income is available due to a long or even permanent employment, this circumstance is positively evaluated and classified. The chances of getting a loan with good conditions are good here.
Frequently asked questions and answers
Confusing can be the search for the right loan offer. In the process, one or the other question arises. A clarification of these question marks must be done in advance. A small selection of the questions are clarified here.
Do processing fees apply?
A resounding no to this. In 2014, there was a case law on this issue. The Federal Court of Justice ruled that accruing processing fees of personal loans are inadmissible. Processing fees already paid can be reclaimed.
Can a trainee claim a loan?
An apprentice's income turns out to be low, which makes a loan rather difficult to obtain. The outlook after the training period also remains unclear and speculative. Nevertheless, with the help of a takeover declaration of the company after training can increase the chances of obtaining a loan.
What are the different forms of credit?
Types of credit are available in many different types and designs. As a distinguishing criterion can serve, for example, the purpose of use. Thus, the car loan or even the real estate loan can be mentioned in this section. In both cases, the use must be exclusively for the specified purpose.
Differences can likewise be found in terms and conditions. This includes, for example, the classic loan on installment and the overdraft facility. Differences here make the amount of interest as well as the modalities for payment. A construction financing can either be repaid with constant monthly installments or set up as a bullet loan. With second, repayment is made in full at the end of the fixed term.
When will the amount be disbursed for use?
The payment of the amount due could hardly be more different. In most cases, a maximum of one week elapses between the conclusion of the loan agreement and the maturity date. Some online banks or even branch banks offer lightning transfers. Thus, the amount is transferred in full within one business day or sometimes even within just a few hours.