Best Privatkredit (Personal Credit) Germany [2024] - Navigate Germany

If you are on a vacation trip or for a job or business meeting in Germany, you must know about personal credit in Germany, which is a small loan to meet your regular expenses. Germany’s financial system is very developed and organized, but for foreigners it is challenging.

Personal Credit

Personal credit is a small personal loan used for private or personal expenses. There are two sources to get personal credit;

1. Loan by a private person
2. Loan by a bank

Loan by a Private Person

A lot of people have set and established their platforms to offer personal loans where you can submit your credit application. It is also called peer-to-peer dealing as you get a loan from your friends, colleagues, relatives, or any private person with easy and flexible terms and conditions. These platforms always strive to get more clients to enhance their market share and have a higher success rate.

Loan by a Bank

You can get a loan from a bank by applying online or in person at a bank who will consider the various factors to approve the loan application. If you meet basic and legal requirements, your application will be approved.

Basic Information about Personal Credit

Loan Amount: Amount of a personal loan is between 1,000 Euros to 50,000 Euros, but most loans paid out are between 7,000 Euros to 12,000 Euros. Your approved amount is based on factors like your current job, background, and creditworthiness.

Interest Rates: Germany’s interest rate is 4% to 6%, which is comparatively low. Overall, the interest rate is between 1.99% and 19.99%, but a few providers offer zero interest rates. Creditworthiness requirements are very high for these loans. 

Loan Duration: Pay back the loan between 12 to 120 months, but in most cases, duration is between 48 to 60 months.

Borrower’s Rights: Germany is a developed country with strict rules and regulations for everyone and they are very concerned about consumer protection. When a German is bound to fulfill the legal requirements, they have rights too;

• Return the loan anytime you can, but you need to pay 1% additional fee for the outstanding amount of the loan to your bank.
• Withdraw from a loan anytime within 14 days.
• Data protection and security.
• Ask for the reason, if the application is rejected.

Kinds of Loans (Personal Credit)

Here are different kinds of loans in Germany.

1. Auto Financing
2. Housing loan
3. Instant loan
4. Personal credit line
5. Personal consumer loan

Auto Financing

Autokredit / auto financing / car credit is a fixed installment loan that is available in Germany with many options for follow-up financing, so you can decide the final rates easily.

Housing Loan

Immobilienkredit is a housing loan used to purchase some real estate. These loans are not consumer loans or personal credit.

Instant Loan

Sofortkredit is a fixed installment loan in which there are lower payout amounts and lead time is also down. The processing method is faster for instant loans.

Personal Credit Line

Rahmenkredit is connected to a bank account overdraft or a credit card with a specific credit limit.

Personal Consumer Loan

Ratenkredit is a fixed installment loan with monthly repayments. Interest rates are lower if you get personal consumer loan from a traditional bank, but higher for big banks and financial institutions.

Looking for others kinds of loans? Read article about getting a loan in germany.

Eligibility Criteria to Obtain Personal Credit

You need to meet the legal requirements to get the personal credit in Germany;

• 18 years of age(minimum)
• Resident of Germany or have a German address.
• Valid national identity card and a valid passport.
• Valid phone number or email address for correspondence.
• Good creditworthiness
• Have a German bank account.
• Earn a minimum of 600 Euros per month
• Verification documents of personal information and credit history 
• Have a pay slip or your bank account statement for income proof.

Process to Apply for a Loan

Different platforms offer loan or credit services with the collaboration of foreign banks, financial institutions, credit institutions, and private individuals. The process for both small and large loans is not very difficult. Follow these steps to apply for a loan in Germany. 

1. Fill out the online application form.
2. Choose the kind of loan.
3. Upload the required documents.
4. Submit your application.
5. Receive your credit

Fill Out the Online Application Form

Fill out the online application and give your personal details like your name, address, contact details, occupation, and financial position. Give the loan related information such as the amount of the loan, duration, timeframe, and reason to get personal credit.

Choose The Kind of Loan

Based on your need, think carefully about the kidn of loan you need and mention this in your application form.

Upload the Required Documents

Upload the required documents to verify the details in your application form and prove your identity. Here are the documents you must upload; 

• Salary statement or payslip
• Valid identification document (identity card or a passport)
• Proof of creditworthiness (SCHUFA)
• Pension certificates in some cases

Submit Your Application

After completing verification step, sign your application, and submit it.

Receive Your Credit

After submission of your application, authorities will review your application to approve or reject it. If approved, you will get your loan amount through your bank.

Tips to Follow

These tips are good to follow when applying for a loan and have a smooth process.. - Improve your credit rating and prepare yourself for negotiations.
- Make a practical reason why you need a loan. Your application approval is based on your reason.
- Compare and choose the best loans option to fulfil your needs.
- Compare the plans and select the best option to avoid additional costs and higher interest rate. - Make intime repayments to avoid fines and additional charges.
- Make a detailed and realistic financial plan to repay the loan in monthly installments.

Personal Loan Providers in Germany

Here are the top loan providers in Germany;

• Auxmoney
• SWK bank
• Smava
• Tarifcheck
• Verivox
• 1822 direkt

Auxmoney

Auxmoney is an onlie platform, established in 2007, offering the easiest way to get personal credit.

Pros

• Economical plans
• Easy and fast process to apply.
• High success rate
• Use the money for any purpose.
• Rating 4.8 out of 5 regarding services and satisfied clients.
• Average interest rate of 4.42%.

SWK Bank

SWK bank was established in 1959 and now it is one of the largest banks in germany.

Pros

• Almost 20,000 positive reviews for their reliability and quality.
• Over 60 years of experience.
• Digital application process
• Quick and easy to apply
• Interest rate of 1.54% to 3.99%.

Smava

Smava is the most accessible loan calculator to calculate your loan, monthly installments, and interest rate. You can also compare, select, and apply for the best offer according to your needs.

Pros

• Interest rate between 0.4% to 10.9%.
• Free to apply for the loan.
• No impact on the credit score if you cancel your loan.
• Different loan options for self-employed persons.
• Have collaboration with different banks
• Flexible terms and conditions.
• 14 days lead time.

Tarifcheck

It was established in 2001 and is one of the largest loan providing platforms in Germany.

Pros

• Interest rate between 0.68% to 5.99%
• Simple application process.
• High success rate.

Verivox

Verivox is the platform where you can compare services or different options tlo get a loan.

Pros

• Interest rate starts from zero.
• No requirement to submit your documents.
• Digital system.
• Can pause your payments.

1822 Direkt

1822 direkt is the part of Sparkasse (German) bank offering loan with different duration from 12 months to 120 months.

Pros

• Interest rate of 2.49% to 7.31%.
• No delays
• Favorable terms and conditions.
• Free to apply.
• Debit and credit cards available.
• Digital application process.

Conclusion

There are several personal credit or loan providers in the Germany, but choose a best amd reliable provider. Whenever singing the contract, read the terms and conditions very carefully and follow the tips to make an informed decision. Make your repayments in time to avoid any inconvenience.