How credit comparisons work online

It is not uncommon in life that one lacks the necessary money for a purchase or a long-term investment. Then it can make sense 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 taken out completely online.

However, the offer is large and not every lender, which is found here necessarily favorable or serious. Here so-called credit comparisons can help. 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. That is naturally meaningful, because in most cases they belong there already to many years to the clientele and made good experiences with the 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 ones. Often, especially the larger branch banks are quite picky in granting loans.

If you compare a branch bank with a direct bank, the latter lacks direct personal contact, but applying for a loan is much more convenient and in most cases cheaper. Not infrequently installment loans can be paid out 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. It seems therefore as if in the direct banks the future of the credit business lies.

Requirements for a loan in general

If you want to take out a loan in germany, no matter in what form, this is linked to a number of conditions. Not all requirements must always be met. Especially when it comes to the issue of creditworthiness, banks often make exceptions and grant loans despite a lower credit rating.

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. Only with the completion of the 18. After all, once you reach the age of 18, you have full legal capacity.
  • Residence: residence within germany is also a basic requirement for the granting of a loan.
  • Bank account: although it is not necessary to have an account at a german bank, it is necessary that the bank operates in germany and provides a german bank account.
  • Income: A regular income is the basic prerequisite for being able to repay the loan later on. For this purpose, a permanent job is important. 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 when it comes to obtaining loans.
  • Creditworthiness: the bank granting the loan is obliged by law to check the creditworthiness of the applicant. Creditworthy are those who offer sufficient collateral to repay the loan. Such collateral can be, for example, houses, savings accounts or securities.

The information is requested in the form of various documents during the loan application process.

Which loan is needed?

Before you start looking for a loan, it is first necessary to find out which type is even possible for you. For depending on the intended use or loan amount, there are different forms of loan.

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 credit forms the sum moves however usually only in the five-digit range. The term is depending on the amount a few months or several years.

Similar to the car loan, the real estate loan is also earmarked for a specific purpose. It may be used exclusively for houses or dwellings. This involves the construction, purchase, renovation or refurbishment of real estate.

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 just paid off.

Spoilt for choice on the internet

People who want to take out a loan have long since turned not only to their house bank. 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 coming years. Front runners with the direct banks are the ING, the DKB or the 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 conditions for loans. You just have to be able to find them with the large offer. With the right help, however, this is easy.

Use comparison portals

It feels like new banks are being added here almost daily. It can be quite difficult to keep track here. Here comparison portals on the internet come into play, which can help to compare the variety of different loans with each other. Interested parties can not only find the right offer for them, but can also save money compared to offers from branch banks.

This works on the interest. 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 on the net, one would have paid about 35 percent less for the loan in the same year when taking out a loan.

It can therefore be worthwhile to look for loans away from your own bank, and not just because of the possible financial savings.

Advantages of a loan comparison

An online loan 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.
  • The online loan comparison will give a good and transparent overview of the different loan offers, so that they can be compared with each other.
  • Often the comparison portals get exclusive favorable interest rates offered by the banks, which in turn are passed on to the 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 only transmitted to potential lenders.

Safe, fast and cheap – the conclusion of a loan can hardly be better.

Conclusion in three steps

To now get to the desired loan via a comparison portal, three steps are necessary:

  1. First the portal is called and the basic data are entered. In addition the kind of the credit, the desired sum and the running time must be entered into the search mask. Personal data is then requested, such as personal details or the income of the household. In advance it is necessary to prepare a budget calculation. Thus one can determine, how much money one has for the monthly repayment installments at the disposal.
  2. Once the data has been entered, the work of the comparison portal begins. The potential borrower receives individually tailored offers based on the input, which can be compared with each other to find the most suitable loan. It is important to pay attention to the lowest possible effective annual interest rate in order to save costs. Unscheduled repayments should also be possible.
  3. If the desired loan is found, it is selected directly in the portal. Afterwards it can be requested there directly completely on-line.

Submit documents and evidence

In order to properly conclude the loan, some documents must first be submitted online. To do this, the data entered at point 1. Entered, be substantiated with the help of the appropriate documents and records. This is the only way to meet the criteria for the loan.

The specific documents required can be found in the credit agreement at hand. Usually, however, the following evidence is required:

  • Bank statements from the past three months prior to the loan application,
  • Proof of salary from the last three months,
  • Copies of employment contracts and
  • Additional evidence depending on what else the bank requires.

Although it may be difficult to obtain a loan for self-employment, it is not impossible. 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 statement.

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 verify the identity of the applicant. A signature under the application is not sufficient here for security reasons. Fortunately, this can also be solved online via so-called video identification procedures.

With the help of the camera of the computer, smartphone or tablet, the identity of the borrower is established. In addition, simplified said, the respective identity card is held into the camera and compared with the person.

The loan can then be processed. In 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 in any case for potential borrowers. Not only can you save money compared to loans from your own bank, but you can also benefit from a much wider selection and find a suitable offer in this way.

However, such comparison portals do not only take over a search function, rather they offer a full credit service, from the search, over the consultation up to the actual application on. You do not even have to leave the house. It could hardly be simpler.