Making a large purchase or taking on a big financial project is the main reason why a majority of people seek loans.
It makes it easier for someone to access money at a short period of time and pay it back at a later date.
Credit services have been flourishing all over the world by making tons of profits from the charged interest rates.
It has even been made easier to access loans from your mobile phone. You can find loans from online banking services or other licensed financial institutions in Germany.
However, you should be extra cautious before approaching any online money lender.
Take time to confirm that they are selling legitimate services through reading reviews from De.collected.reviews.
Engage with the customer feedback to determine whether the loan services you’re trying to access are from a reliable source and the interest rates are favorable and reasonable.
No matter the financial institutional you approach seeking a loan in Germany, you will be required to have the following;
- Identification
In order to secure a loan in Germany, the first proof you need to have with you is all documentation relating to your identification.
The primary reason why you shall be required to produce your identification documents is to prevent securing a loan using a false ID.
Production of identification documents is a procedural requirement and no bank in Germany can issue a loan or credit upon failure to adhere to this.
Some of the documents to produce in order to identify you include a driver’s license, a passport, for German citizens it can be a certificate of citizenship or a state-issued ID, or a military ID.
- A good credit rating
Having a good credit rating is just as important as the production of identification documents.
In Germany this is what is referred to as Schutzgemeinschaft für allgemeine Kreditsicherung or Schufa.
A credit rating represents a measurement of how well you have met your financial obligations in the past like paying your bills and credits.
A good credit rating determines your creditworthiness.
If you are a foreigner moving to Germany and you’re asking whether you can use your previous credit score from your country of the previous residence, then it is impossible.
Your credit score in Germany will begin accumulating the moment you get a German address.
It should not be difficult to apply for a Schufa report. You can apply for one through SCHUFA-BonitätsCheck.
- Residence permit
German money Lendering companies do not grant loans to people without a residence permit.
It will be much easier to access loan Services if you have a permanent residence permit. However, it is still possible to access credit services with a temporary residence permit.
On a short residence permit then the period of your loan should not exceed the expected expiry date of your visa or residence permit.
- Stable income/ verification for income
Another important thing you must have is a stable income. You cannot be granted a loan or money without proof that you are in a position to pay them back in the first place.
A stable income in this case would mean a full-time job or a business with a stable income.
If you have a full-time job then you may have to produce documents relating to your job as well as your employer’s written and verified employment contract.
If you’re a business owner then you will be required to produce documents that identify your business has been incorporated in Germany as well as its tax payment sheets.
All this is done so as to prove that you are creditworthy.
- A good reason for seeking the loan
There are so many reasons why a person may want to secure a bank loan.
Informing your loan provider of the reasons why you need it alone in the first place will determine the type of loan you will get and even the interest rates to be charged.
Why? Interest rates on loans vary depending on what they shall be used for in the first place.
For example, getting an education loan may come with a lower interest rate than a loan purposefully made for a business startup.
- Collateral
It is inevitable that you will be asked to place a collateral before the loan is transferred to your account.
The common forms of security financial institutions may place are;
- A land charge (land, buildings, fixtures)
- A pledge over the bank account of the borrower
- A pledge over shares of the borrower or in the company
The pledged security will only be transferred to the financial institution once there is proof of reasonable doubt that you have failed your obligation to repay your loan.
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