For taking out a loan, many reasons can speak. Expenses quickly increase by an unplanned investment. The washing machine breaks down or a new car is needed. Reserves have not been built. What should consumers turn to now?
Since a personal loan can usually be applied for immediately and, above all, without complications, it is one of the most popular and widespread loans. An installment loan for borrowing euros is an option well worth considering in some financing matters. Often the money can be found in the account of the borrower within a few days.
Online providers offer a plus here: borrow money right now, offer here many different institutions at favorable rates, 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, from the bank or via the internet – the borrower has the freedom to choose where and from whom to take the loan. But what speaks for and against one of these variants? A guide to making responsible money management decisions in the form of loan selection is presented below.
When is the short-term lending of money profitable??
Borrowing euros are not always profitable for the borrower. In some cases, it must be weighed up which is more sensible. Take out a loan or do without something after all. Mini loan 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 considered. Are these "fees" worth borrowing money or not? For example, applying for money may make sense in the following cases.
Borrow euros to pay off the overdraft facility
Those who open a checking account in the vast majority of cases set up a so-called overdraft facility. This overdraft facility allows the account to be overdrawn by a certain amount if necessary, which means incurring debts for the holder. This stall framework can also be more than 5 if need be.000 euros. In contrast to other loans, an overdraft facility is convenient – once it has been set up, it does not require any further contract modalities or a further SCHUFA check.
Still, caution is advised. A dispo can quickly become a cost trap.
The reason for this is the expensive interest rate of ca. Ten percent. Thus, the overdraft facility is above an installment loan in the same amount. So who uses several months in a row the dispo should take a loan if possible to be able to balance the account and thus pay off the debt more cost-effective. 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 overdrafting of the account.
Special repayments by means of credit to pay less installments
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 think about another loan for making unscheduled repayments.
This is the case when a newly taken loan has better liabilities than the previous one. This also allows the loan term to be shortened. The borrower is finished paying back the euro loan a few months earlier.
For example, this is the case with traditional real estate financing.
There, the interest rate is usually fixed for at least ten years and is thus bound. In this example, it may be worth taking out a new loan to pay off the loan early. Here, the expert speaks of a so-called rescheduling at the end of the fixed interest rate. It is always advisable to ask an expert for advice before taking out a loan in order to repay an existing loan more quickly. When it comes to debt restructuring, there can be some pitfalls that are not apparent to the layperson.
Loan for the financing of an own passenger car
In addition to taking out a loan for the vacations, the car loan is one of the classics in the field of lending. In this case, it's worth comparing special auto 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 perspective. This results in a lower annual interest rate for the creditworthy person. He therefore has to pay back less than if he does not deposit any security in the form of the car. When taking out the loan, some providers require the vehicle registration as collateral. This is given back to the vehicle owner after complete repayment of the loan.
Loans for financing studies
For the student wait not only lectures, but also costs for his study time. The costs range from the first apartment furnishings to a new laptop or a new computer. Non-fiction up to a semester abroad. Financially strong students are rather the exception, so 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 do not get a chance to get 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 bafog. The two variants are processed separately from each other and thus one does not exclude the other. Especially the education loan offers a very favorable interest rate. In addition, there are other advantages, which are adapted to the circumstances of pupils and students. For more special student loans, it is worth taking a look at the offers of the kfw here.
Requirements for a mini loan
For the admission of an immediately credit some conditions are to be considered. These are valid both at the branch bank and for the way over the internet.
- Age of the borrower: as a borrower, the minimum age of 18 years is mandatory to get money. This means that the borrower must be of legal age, because only then they are fully capable of doing business. From an increased risk due to death, beacons assume mostly seniors. Therefore, for pensioners it is only possible, if at all, 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 for immediate payment to receive. This is the main residence, as a secondary residence is not sufficient for taking out a loan. The borrower must be immediately available and liable in case of late payment. This is not guaranteed in the case of a permanent residence outside.
- The employment relationship:especially in this area there is some information to consider. If the borrower is within the probationary period, it is difficult to take out a mini-loan, because the risk of default is too high for the lending institution. The borrower could lose within the probationary period without giving any reason his employment and thus the installments after the disbursement for months no longer be able to lift. Therefore, at least a permanent employment is often a credit prerequisite. Here the borrower immediately receives a loan approval, if the term of the loan agreement is shorter than that of the employment contract.
For the self-employed, borrowing money becomes a challenge. Within the first three years, an immediate private loan is excluded due to the existence of a business. After this time, the income still remains difficult to calculate (see next point).
- Proof of regular income:in order for a credit institution to verify creditworthiness, proof of income must usually be provided when applying for a loan. With it the lender examines whether the income less existing expenditures is sufficient for a repayment in time. Employees are usually required to immediately provide two to three months' proof of salary for consumer loans. Here, too, the situation becomes more difficult for the self-employed. Since no salary statement is available, self-employed 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 assessment.
- Checking SCHUFA:just banks carry out a strict credit check before granting credit. 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. The 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 a SCHUFA check. This is associated with higher interest rates.
- Immediate proof of security:if a higher amount of money, such as z. B. In the case of construction financing, some credit institutions require so-called collateral. This is especially the case with loans that are fixed for long periods of time and have a high loan volume. Here, the conclusion of a residual debt insurance is often required or a security in the form of life insurance or risk insurance. In the case of real estate financing, the property is taken as collateral, in the case of a car loan, the purchased 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 provided 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 borrow a few euros from relatives, friends or acquaintances is a good way without SCHUFA check or entry to get money.
However, this type of money lending is also associated with risks for both sides, such as when the lender suddenly demands the sum back in full 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 whether a private loan with family, friends and acquaintances is useful or not, the advantages and disadvantages should be considered more closely.
That speaks for a money loan of a private person for a private person:
- Basis forms the confidence relationship of the two contracting parties
- Less cost and time
- No credit check (formal)
- Less effort (inquiry, application procedure, verification, credit contract, etc.). Usually fall away or are converted simplified)
- Loan amount immediately available
This speaks against a money loan from private individuals for private individuals:
- Risk of strain on the relationship between the two parties to the contract to each other by the loan
- Lender may demand a sudden repayment of the loan and this immediately in full amount
- Risk of the lender his lent money not fully recovered again
- Lenders are not always able to adequately substantiate and represent their legal claim to repayment
- Breach of friendship due to disputes about the loan
In summary, it can be roughly said that the supposed advantages can quickly become disadvantages. An example: A married couple borrows money from the wife's parents to buy a house. Eventually, divorce occurs and thus the personal loan becomes an additional burden for all persons involved. What portion 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 many more questions have to be clarified additionally in this case.
For this reason, it is important that both partners create a secure framework for lending money in advance. This applies just as much to the person who needs the advance as it does to the lender. A simplified loan agreement is recommended and almost urgently necessary here. A fixed contract between the two credit partners usually helps to avoid unpleasant and burdensome surprises.
Taking out a loan at the (house) branch bank
The first place that comes to mind when wanting a loan is usually going to the house or. Branch bank. Provided there is still a local bank branch of their trust, as many financial institutions have to close part of their branches. Especially with an offer from the bank plays a close examination of the terms and obtaining several offers from different banks a great deal of importance.
Advantages and disadvantages of bank loans
The branch bank can score positively with many features and is therefore also a better alternative for an immediate loan, as the private money lending. Nevertheless, there are some important negatives to consider in the opposite direction.
Per branch bank:
- Contact person on site
- Personal advice
- Customized advice
- Available room for negotiation
- Greater flexibility in terms and conditions
- Possibility of reacting more flexibly to problems and, if necessary, to changes in the credit situation. To be able to suspend the rate
Contra branch bank
- Contact credit department not always locally
- Faulty advice possible
- Fewer opportunities to compare with other banks
- Usually noticeably higher interest rates than, for example, with an online bank
- With the inclusion of unnecessary credit modules
- Attempting a package deal: if you as a customer want better conditions, then you must also take out this insurance with us
- Customers are overwhelmed by too much information
Obtaining a loan offer from a branch bank is particularly suitable for people who are not confident in using the internet and for people who would like to have a personal contact person on site. 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 loan offers on the respective websites and can be applied for there directly. Thus also the customers of a branch bank can profit possibly from a more favorable interest rate and possess the possibility of the claim partner locally. A comparison with several banks and the respective conditions is nevertheless advisable.
Nowadays, almost everyone owns a smartphone, tablet or PC. The internet is ubiquitous and is used in many ways to obtain more favorable offers, such as when booking a vacation or signing an electricity contract. Why not use this option for 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 made immediately and the interested party receives an immediate commitment
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 more favorable interest, due to lower running costs
- Better conditions
- Application can be made conveniently from 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 to compare too many providers (overload of the borrower)
- No personal consultation
- Online or telephone support may be less responsive to personal needs
- Less room for negotiation: no chance of averting the impending rejection with arguments
Especially when comparing online loans, the selection of the lender is associated with research. After the selection of the desired product, it should be briefly checked which institute it is to be protected from unpleasant surprises.
Nevertheless, the large selection of providers makes an online application sensible. 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 receives a mini loan with lower fees and a low annual interest rate with good credit rating.
Step by step to the loan
In order to successfully take out a mini-loan, a few steps must be followed. This also applies to borrowing via the internet. Here is a little guide to follow:
- Determine the loan amount correctly:when determining the need for the right loan amount, the first mistakes can already creep in. In principle, the financing requirements must first be determined. This means the money needed to the existing capital: total costs minus existing money. The financing requirement is also the basis for the loan comparison with the providers.
- Budget calculation:to determine the possible monthly rate, the budget calculation is an important component. In the budget calculation, all income is determined and compared with the expenses realistically. The difference between the two represents the monthly credit balance available. This can be used for repayment. The branch bank or even an online bank always makes a budget calculation when applying for a loan. In advance, it is quite useful to perform this task yourself to get an overview of whether the targeted loan amount and the amount of the installment are really realistic.
- Compare providers with each other: to find the best conditions for the loan, a comparison of providers should always take place. For this purpose, so-called loan calculators are available on the internet. In this first the framework data are collected and a clear presentation of the best offers with each other issued. For this purpose, in addition to the loan amount, the desired term must also be specified for the calculation as a rule.
- The application: if the optimal offer was found to the basic conditions, the credit application must be submitted. The application contains practically all the relevant data on the loan: in addition to the financing requirement, the intended use, the term and the interest rate are also specified. To the application, the required documents, such as the proof of income, must be submitted with. Based on this, the information is checked for accuracy.
- Legitimation, application verification, SCHUFA query: in this step, the type of institution is crucial. At a branch bank, the legitimation takes place on site by means of the presented identity card or passport. Online institutions often check 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 the SCHUFA for relevant entries, so that the creditworthiness can be determined. This is a so-called credit check. If application, legitimation and creditworthiness are in order, the loan is approved.
- The money is disbursed: only when the loan is approved, the euro loan is disbursed within a few days to the account of the applicant. The money can now be disposed of.
Important information for borrowing
Borrow now euro is often not so easy. Attention should be paid to some conditions in particular. If the loaner speaks of a credit, he speaks mostly of a classical installment credit. This is characterized by three features: the loan amount, the term and the interest rate.
From these three factors the monthly repayment rate is determined, which the borrower must repay to the financial institution. For this purpose, an additional account is opened for the loan. This way, you can always get an accurate reading of the remaining debt. The interest rate is decisive for the costs incurred for the loan. Together with the desired term, the result is 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 be used to compare terms and their impact on loan payments. Thus the admission of a favorable credit is guaranteed.
Increasing the 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 variants that increase the chances of approval:
- Two borrowers instead of one: if two borrowers are listed on the loan agreement, it can increase the chances of approval. Two borrowers minimize the risk of default. Many banks now require married couples to apply for a loan together. Applying for a loan from married people without a spouse can even become a problem here. Another option is the entry of third-party guarantees.
- Additional collateral: beside the life insurance or the own house, also the own passenger car can be deposited with certain credit forms as collateral. It will now be easier to get a loan with the help of a declaration of assignment.
- Employment relationship: if, despite poor creditworthiness, a regular income is available due to a long or even permanent employment, this circumstance is positively evaluated and classified. The chance to get a loan with good conditions is good here.
Frequently asked questions and answers
Confusing can be the search for the right loan offer. As you do so, one or two questions pop up. A clarification of these question marks needs to be done in advance. A small selection of the questions are clarified here.
If processing fees are incurred?
A clear no to this. In 2014, there was a case law on this topic. The federal supreme court ruled that accruing processing fees of personal loans are inadmissible. Processing fees that have already been paid can be reclaimed.
Can an apprentice claim a loan?
A trainee's income turns out to be low, so getting a loan becomes rather difficult. Even the prospect after the training period remains unclear and speculative. Nevertheless, with the help of a takeover declaration of the enterprise after the training the chances for a credit can increase.
What are the different types of credit?
Types of credit come in many different types and designs. The purpose of use, for example, can serve as a distinguishing criterion. Thus, in this area can be called the car loan or even the real estate loan. In either case, the use must be exclusively for the specified purpose.
Differences can be found in terms and conditions as well. This includes, for example, the classic loan on installment payment and the overdraft facility. Differences here make the amount of interest and the modalities for payment. Construction financing can either be repaid with consistent monthly payments or taken out as a bullet loan. In the case of the second, redemption occurs in full at the end of the fixed period of time.
When will the amount be disbursed for use?
The payment of the amount due can hardly be more different. In most cases, a maximum of one week elapses between the conclusion of the loan agreement and the due date. Some online banks or even branch banks offer flash transfers. With this, the amount is transferred in full within one business day or sometimes even within just a few hours.