Getting credit: what requirements must be met?

Requirements for your installment loan

"Can I get a loan?" – We will explore this question in more detail below. Also learn whether you can get a loan with low income and what documents are needed for an application.

Consultant Dr. Klein

Getting a loan – what are the requirements?

You can usually get a loan from the bank. To do this, you fill out a loan application and submit it to a banking institution of your choice. In order to obtain the most favorable loan offer possible, it is worth comparing several offers with each other in advance. The submitted documents will then be checked. It is important to the bank that the applicant can repay the money within a reasonable period of time. For this reason, creditworthiness and credit rating are particularly scrutinized. If you have a good income, are debt-free and do not have a negative Schufa entry, you have nothing to fear. The risk for the bank in this case is very low, so that nothing stands in the way of a loan being granted. You should only be at least 18 years old and have both a German residential address and a German bank account.

However, those who are not quite as liquid have a harder time. However, most get a loan even if the conditions are not quite optimal. The bank then just needs more collateral deposited to minimize the risk to you. Works of art, cars or houses count as collateral, i.e. assets that lose as little value as possible during the term of the loan. As a rule of thumb, the higher the loan amount, the more collateral is required. This is how the bank tries to keep the risks low. But even with a poorer credit rating, it is not impossible to get a loan. Here are some tips to increase your chances of getting a loan.

Getting a loan depends on your income

Income plays an important role when you want to get a loan. The bank depends on the income, in which amount a loan is approved. A permanent employment relationship and the completion of the probationary period in the company favors that you get a loan. Before you apply for a loan, check how much of your income you can invest in a loan. After all, it is not advisable to obtain a loan in order to be able to afford a new television or a remodeling project, but to be starving in return. In addition, do not calculate too tightly, so that you do not immediately run into financial bottlenecks in the event of unexpected events.

FAQs – Frequently asked questions

Getting a loan: What to do if your income is low?

If you do not get a loan, it may be due to your low income. The bank then fears that the installments will not be paid and it will not see its money again. We show you some levers you can turn, so that you still get a loan.

  1. Extend Term: If you can’t get a loan, you can extend the term of your real estate loan. This reduces the monthly burden, as the repayment is spread over several months. Keep in mind that this also increases the interest costs.
  2. Reduce the loan amount: If you take out less, you also have to pay back less. Reduce your loan amount, if possible. You will find it easier to get a loan.
  3. Compare offers:Compare conditions for loans is worthwhile. Get several offers and compare them with each other. Even a few tenths of a percent can yield an interest rate savings. Note that the conditions such as term, monthly installment and extras such as unscheduled repayments should be the same.
  4. Determine guarantors: A guarantor is a person who is solvent and serves as collateral for the bank in the event of a payment default. If at some point you are no longer able to pay your monthly installments, the guarantor steps in. You are both liable for the loan and ensure that the repayment is made on time and in full. It does not matter who is the actual contract holder who got the loan. Parents, children or friends can act as guarantors, as well as life partners and spouses. Propose a guarantor to the bank to get a loan, he should be 18 years old and have a good credit rating.

If you do not get a loan immediately, it does not mean that it is completely impossible. With the listed points there is still a chance of a positive loan outcome. Talk best with your bank or a neutral financial service provider like Dr. Small to get a tailor-made financing on the legs.

My income is below the garnishment limit

Would you like to get a loan, but your income is less than 1.133,80 Euro, you have bad cards. The amount corresponds to the garnishment limit. This means that the assets may not be seized up to this limit. A next adjustment of the amount will be made from 1. July 2019 expected. The garnishment-free income increases as soon as maintenance obligations exist. As an example, you can see in the table the seizure exemption limits for one and two dependents respectively.

One personTwo persons
Garnishment limit 1.569,99 € 1.799,99 €

Since the income limits of the banks vary, it is not possible to make a blanket statement: With X euros, a credit request will definitely be positive. Whether you get a loan depends on the bank, so you should apply in any case.

Consumer credit

You can often get a loan more easily from the dealer. The so-called consumer loans are concluded for a smaller sum than is the case with construction financing. With a consumer loan, the dealers require a Schufa information, but the income plays a subordinate role. Note that such offers are often more expensive, since the dealers cooperate only with a bank.

Self-employed: How to get a loan

If self-employed people would like to get a loan, they have it very difficult. Since banks expect irregular incoming payments from self-employed persons, the risk for the bank increases. If you are self-employed and still want to get a loan, you must deposit sufficient collateral that the bank can seize in case of emergency. A three-year self-employment is a prerequisite for the banks to pave the way for a positive loan approval. In addition, proof of income for the last three years is required. Further specifics as well as alternatives to get a loan, we explain in our article credit for self-employed people.

Pensioners: How to get a loan

For the banks, when granting a loan, it is important that they get their money and the profitable interest back. Therefore, age is also evaluated in the risk management of a bank to decide whether applicants get a loan or not. The more advanced the age, the harder it is to get a loan. Although the number of pensioners will increase in the future, there are still no special loans for pensioners. Pensioners are still considered a risk factor by the bank, which usually results in the rejection of a loan application. It is not entirely impossible for pensioners to obtain a loan as well. A few institutions grant loans up to an age of 79 years. The best chances have loans with a short term and a small loan amount. If the full repayment of the loan is achieved within the statistical life expectancy, the chances increase significantly.

You can get a loan in the area of construction financing easier again since May 2018. According to the residential real estate loan directive, the decisive factor for a positive loan approval was whether the loan amount could be repaid within the statistical life expectancy. If this was not the case in the past, the applicant did not get a loan. This requirement has now been relaxed with the Real Estate Credit Guideline Regulation. Since May 2018, the bank must grant loans that are not expected to be repaid during the statistical life expectancy. A loan is now also available to applicants who can service their loan in the long term.

Students: How to get a loan

Studying can be very time-consuming, so that either there is no time left for a part-time job or a part-time job unnecessarily prolongs the studies. For this reason, many students decide to take out a loan. A loan is granted to those who submit an appropriate application to the bank. However, not all banks also offer loans for students. The most famous lending institution for students is the Kreditanstalt fur Wiederaufbau (K). Students who want to get a loan receive a grant of up to 54.600 euros, without the need for collateral. The payment is made monthly for a maximum amount of 650 euros. Repayment does not start until 18 months after the last monthly partial payment. Most often, the Federal Education and Training Assistance Act (BAfoG) is used. Students have the opportunity to obtain a non-interest bearing loan at favorable conditions. In addition, the service provided only has to be repaid in half.

Credit: What documents are necessary?

With your loan application, some documents are necessary for you to get a loan in the first place. The bank will use your documents to assess how much of a risk you are to them if you are granted a loan. The bank needs these documents for a check:

  • Basically all documents confirming liquidity
  • Documentation of collateral
  • Proof of income for the last three months
  • If applicable, bank statements
  • Documentation of existing loans if any
  • Self-disclosure
  • Identity card/ registration certificate
  • Credit application

Each bank decides on the basis of different criteria whether you get a loan or not. Therefore, not always all documents are to be submitted. Inquire best directly with your house bank, what is necessary for the calculation.

Procedure to get a loan

Regardless of what you want to afford with the borrowed money – you can get a loan only after you have submitted an appropriate application to a bank or financial service provider such as Dr. Have submitted small. The procedure is always the same.

Without submitting an application, you can also not get a loan. On the application your personal data as well as details about your financing are requested.

Together with the application you will need all the documents that support your information on the application. In addition to proof of income, this includes, among other things, documents regarding collateral and your Schufa information.

The bank now reviews your application. It pays particular attention to your creditworthiness and your credit rating. If any documents are missing, the bank will ask you to submit them later. This will delay the bank’s decision on whether to give you a loan.


After a thorough examination of the documents, the application is either approved or rejected. It depends on how high the bank considers the risk, would they approve you for a loan. If you get a loan, the signing of the loan agreement follows. If your application is rejected, you can try again with changed conditions or apply for a loan at another bank.

This application route is highly simplified. For more detailed information, we would like to refer you to our article on taking out a loan.

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