This article’s explore the full process how to get a loan Germany complete guidelines for a beginners and professionals.
Get a loan in Germany with VERIVOX
There are 2 ways to get a personal loan on verivox
If you do not speak German
Call our toll-free hotline (06221 79617216) and ask for an English-speaking credit advisor.
We are happy to guide you through the comparison and the application process. We’ll make sure you get a low interest rate (APR) and help you fill out your application.
We are there for you from 8am to 8pm on weekdays and from 10am to 6pm on Saturdays.
If you do speak German
Use our free loans comparison tool above. It calculates your personal interest rates (APR) at several German banks. You can apply for a loan at the bank of your choice.
For more details, see section “How to get your credit in 4 steps”.
VERIVOX loans hotline
We don’t believe in call centres.
That’s why VERIVOX assigns a dedicated and experienced credit advisor to every customer.
Your designated advisor will support you all the way until you receive your money and beyond. We will:guide you through the credit comparison;
make sure you get a low interest rate and receive your money as soon as possible;
help you select the appropriate loan term to keep your monthly payments well within your budget;
fill out the credit application form together with you;
explain the process of identity verification;
keep tabs on your credit application and give you status updates;
contact you at once if the bank makes any additional requests and help you deal with them;
still be there for you after you receive your money.
Call us if you need help with refinancing, deferring your payments, repaying early or making an unscheduled payment.
How to get your credit in 4 steps
German speakers may follow the following 4 steps to compare banks and apply for a loan.
1. See what types of loans are available
Enter your desired loan amount in Euro and the loan term in months into the VERIVOX calculator above.
You may also select one of the following reasons for the loan:
“Freie Verwendung”: unspecified.
You will see all general-purpose personal loans, but neither secured car loans nor personal loans for home improvement.
“Umschuldung / Kreditablösung”: consolidation or refinancing of existing debt.
If this option is not selected, the bank will assume the new loan will be added to your existing loans, leading to a higher APR.
“Auto / Motorrad”: car or motorcycle loan.
With this selection you will see secured car loans in addition to general-purpose loans.
Most banks will expect you to provide your motor vehicle registration certificate (Kfz-Zulassungsbescheinigung Teil 2) as collateral in exchange for a lower rate.
“Modernisierung / Renovierung”: personal loans for home improvement.
This option will show personal loans for homeowners in addition to general-purpose personal loans. These loans are not secured against your property.
You will merely have to show proof of home ownership and usually also of the fact that the money will be used for home improvement.
“Ausgleich Girokonto”: debt consolidation for bank overdrafts. If you find yourself constantly using your overdraft facility, you may transfer that debt from a high-interest overdraft to a lower-interest personal loan in order to save money.
“Gewerbe / Selbstständige”: businesses and the self-employed.
This option will only show loans that accept self-employed people or businesses.
You will receive a list of banks that offer loans within these parameters.
Every offer includes the lowest and the highest possible APR (eff. Zins p.a.) and nominal interest rate (Sollzins geb. p.a.).
Underneath every offer you will find the representative example (repräsentatives Beispiel). It shows the lowest APR and nominal interest rate available to at least 2/3 of the customers.
Consumers with an average credit score can use it to better estimate their own interest rate.
2. Find out your individual APR
To receive personalized loan offers, click on the orange buttons and enter your personal data until the end of the application route (last button “Angebote anfragen”).
You must also agree to a credit score check at the Schufa, the main credit agency in Germany. This is not an application, so the check (Konditionenanfrage) will not influence your credit score.
Based on this data the banks will pre-approve you for a loan and calculate your personal APR.
3. Apply for a loan
Print out and fill out an application for the loan that offers you the best terms.
Gather the documents required by the bank of your choice (proof of income etc.).
Contact our hotline if you have any questions.
Banks are legally obligated to verify the identity of every new customer.
You can undergo identity verification while sending your application at the post office. Learn more about face-to-face identity verification at German post offices under Postident-Verfahren. Many banks also allow online identity verification via video chat (Videoident-Verfahren).
4. Loan approval
After receiving your signed application and documents, the bank will compare them to the data you entered online.
It will also request another credit score check at the Schufa.
This time it will influence your credit score. If all data is consistent, the bank will approve your loan and transfer the amount to your account. This may take up to a week.
Your personal loans advisor will keep in touch with you and make sure you know where you stand.
Prerequisites for a personal loan in Germany
To get a credit in Germany, you must fulfil the following prerequisites:
At least 18 years old
Living in Germany
German bank account
Regular income (attachable earnings) that covers the monthly payments
High enough credit rating (Schufa score)
German residents may order one free credit report per year from every credit agency.
The most important agency is the Schufa. Contact our hotline for an English explanation of how to receive your credit report.
For an explanation in German, read Schufa Score.
Available types of credit
Ratenkredit (instalment loans): Unsecured personal loan.
Repayment in equal monthly instalments.
Loan amount: 1.000 to 100.000 Euro. Loan term: 12 to 120 months. This is what Germans typically mean by “Kredit”.
Autokredit (car credit): Instalment loan as above for the purpose of buying a car.
The bank uses the car as collateral and offers a lower APR than for an unsecured loan.
This means the buyer cannot sell the car until they pay off the auto loan.
Dispositionskredit or Dispokredit (overdraft credit): Line of credit available for overdraft. Usually granted when opening a checking account (Girokonto) – no separate application necessary.
Kreditkarte (credit card): A term used in Germany to describe various types of cards. Revolving credit cards are called echte Kreditkarte or Kreditkarte mit Kreditrahmen. Charge cards (Chargekarte), debit cards (Debitkarte) and prepaid credit cards (Prepaid-Kreditkarte) are available as well.
Baufinanzierung or Immobilienkredit (mortgage loans): Secured long-term loans used to finance real estate.
NEED TO KNOW MORE ON WHICH BANK IS THE BEST IN GERMANY FOR EXPATS
Finding the right bank account for you as an expat does not have to be daunting.
Verivox can help you compare and find the right bank.
Most online banks provide customers with basic information in English, and some also employ English-speaking customer service staff, while others offer online banking in English.
With online banks in particular, a bank account can be opened quickly if you have your ID card/passport and proof of residence in Germany to hand.
If you don’t have all the documents you need, you may have to complete a few additional steps.
Best banks in Germany for students
For those who are studying in Germany, most banks offer a no-fee current account.
Be aware that the terms can change and give rise to charges once you graduate.
It is also important to check that there are no hidden charges with your chosen account. Cash withdrawals from cash machines, for example, should also be free.
Current account (Girokonto)
Most consumers use a current account for their everyday financial transactions.
They use it to receive their wages and for bank transfers, direct debits, outgoing payments and cash withdrawals.
The features of this type of account differ from one bank to the next.
High street banks (Filialbanken), which offer the benefits of personal service and a physical presence, generally charge an account management fee (Kontoführungsgebühr) to cover their costs.
Online banks (Direktbanken), on the other hand, generally do not charge a management fee but expect customers to carry out most of their transactions online.
For this type of free account, online banks in Germany often require customers to pay in a certain amount of money every month, 700 or 1,000 euros for example. This type of account is also known as a “salary account” (Gehaltskonto).
Credit and overdraft interest rates
Interest rates are important criteria when comparing current accounts. At present, banks very rarely pay interest on account holders’ credit balances.
If you use Verivox to compare current accounts, however, you can still find some banks that pay interest.
Overdraft interest (Dispozins) is charged when an account holder uses their overdraft facility – overdraws their account.
The interest can vary between seven and fifteen percent and is a factor that should be considered when choosing a bank.
Customers can avoid paying high overdraft interest rates by taking out a debt consolidation loan.
Withdrawing cash
When thinking about high street banks, the number and location of cash machines (Geldautomaten) and branches in your local area can be an important factor.
It determines how easily you can obtain cash free of charge at any time. Banks that operate no cash machines, or only a few, have joined forces in groups, such as Cash Group and Cashpool, which allow customers to withdraw cash free of charge from any of the banks in the group.
By working together, the density of these banks’ cash machine networks can rival that of other banks.
Online banks often offer a free credit card with their current accounts, which customers can use to withdraw cash free of charge from the cash machines of any bank, even ones that belong to different banking groups.
The Verivox bank comparison tool lets you choose whether to compare only free current accounts or accounts with maintenance fees as well.
Apart from fees, the comparison results show which banks offer free sign-up cash or other rewards for new customers.
Even in the case of accounts that provide attractive rewards, customers should still look for those that offer the best overall terms and conditions.
Bank account
Comparing and opening bank accounts in Germany
The simple Verivox comparison tool enables you to find the perfect current account that satisfies all the key criteria important to you:
No account management fee
Free debit card (Girokarte) and/or credit card
No fees for online transfers or standing orders
Free withdrawals from cash machines in Germany and abroad
How to compare bank accounts
1. Select options
To compare accounts, first click on “Zum Vergleich”, then select to view only free accounts (Kostenfreies Girokonto: Ja) or accounts for which a management fee is payable as well (Kostenfreies Girokonto: Nein). Next you can select whether you want to only view accounts that offer a free credit card (Kostenfreie Kreditkarte: Ja). Now either click “Girokonto vergleichen” to run the search or “Filtereinstellungen” to set filters first.
2. Filter your criteria
For a more in-depth comparison, you can set filters under “Filtereinstellungen”. The options are:
Monthly incoming payments in euros: This amount is taken into account to calculate whether an account is
Account switching service: Any, yes, no
Current account with a credit card: Yes, no, any
Now click on “Girokonto vergleichen” to run the search.
The search results give a summary of the products and providers that match your criteria. At the top of the list are the accounts with the lowest costs.
If several accounts attract identical fees, those with the highest credit interest rate and lowest overdraft interest rate appear highest in the list.
3. Compare details
Under “Produktdetails” (product details) you can open a series of tabs showing charges and credit interest (Kosten und Ertrag), information relating to the banking card (Kreditkarte), details about using the account and security (Führung und Sicherheit), and other account particulars (Weitere Informationen).
Once you have decided on an account that is right for you, simply click the orange button “zum Anbieter” to go to the provider’s website.
What is a current account?
A current account (Girokonto) is a bank account that consumers use for their everyday financial transactions – to receive their wages and for bank transfers, direct debits, outgoing payments and cash withdrawals.
Around 97% of German citizens have their own current account.
Young people generally first need a bank account when they enter employment.
People who are not currently employed also need an account in order to receive social security benefits or pension payments.
In addition to a debit card (Girokarte) for withdrawing cash and making cashless payments, some banks also offer a free credit card with their current accounts.
Many accounts include an overdraft facility as well, which gives the account holder access to funds even when they have a debit balance.
In such cases, interest is charged on the overdrawn amount.
Online banks versus high street banks
Unlike many online banks (Direktbanken), only a few high street banks (Filialbanken) offer free current accounts these days.
In view of the shift towards mobile or online banking and cash machines, lots of consumers are asking themselves why they should be paying the account fees (Kontoführungsgebühr) charged by a high street bank.
Switching banks can reduce the fees you pay by up to 100 euros a year.
How to find the best bank account for you
The best current account for you depends on your average account balance, the extent to which you use the overdraft facility, the account management fee (Kontoführungsgebühr), if any, and additional costs incurred for a debit and/or credit card.
Whereas all banks charge interest on overdrafts (Dispozins), a few also pay interest on credit balances (Guthabenzins).
The offer of free sign-up cash or other rewards for new customers can reduce the cost of an account for a short period, but these benefits are eroded over time.
They can prove beneficial, however, for those who are willing to switch accounts regularly.
Free current accounts sometimes have hidden charges
Many banks offer an account known as a “salary account” (Gehaltskonto) that is free to customers who undertake to make a minimum monthly deposit, typically of around 1,000 euros.
Other providers offer free account management only until the account holder reaches a certain age.
If, under the filter settings (Filtereinstellungen), you set the monthly incoming payment (Zahlungseingang / monatlich) to 0 euros, the Verivox comparison tool enables you to find a current account that is free without any such conditions.
In addition to account management fees, there are other cost factors to consider when comparing bank accounts in Germany.
Both high street and online banks can charge fees for transfer instructions issued on paper, account statements, sending transaction authentication numbers (TANs) by text message, or other services.
Some even charge a fee for issuing a debit card. After performing a search with the current account comparison tool, you can find an overview of these costs under “Produktdetails” (product details).
Free credit card
Some current account holders may also want a free credit card.
Note that the conditions attached to credit cards vary enormously:
Are all payments and cash withdrawals free?
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Do the conditions apply only in Germany or in other EU countries or worldwide as well?
In which currencies are cash withdrawals free of charge?
Some providers charge card holders for withdrawing cash in Germany, but not anywhere else worldwide.
You can use the Verivox credit card comparison tool to find out in which countries individual credit cards allow you to make cashless payments and withdraw cash free of charge. You can even search specifically for contactless (near-field communication – NFC) cards.
Overdraft interest (Dispokredit)
Both high street and online banks can charge high interest rates on arranged overdrafts – often between 5 and 15 percent.
Banks set the account fee and the interest rate on overdrafts separately, so prospective customers cannot assume that a free current account automatically offers low overdraft interest rates.
For customers who use the overdraft facility only for a few days, the amount of interest may not be significant, but those who wish or need to overdraw their account more often should select a bank that charges a low interest rate. When the Verivox comparison tool finds accounts with an identical annual fee and credit interest rate, it gives a higher ranking to those with the lowest overdraft interest rates, so that you can quickly identify the best offer for your needs.
If you are already using an overdraft facility with a high interest rate, you can reduce your costs by taking out a debt consolidation loan (Umschuldungskredit), which is an instalment loan that allows you to pay off different types of debt.
Unlike a conventional loan, you can repay an overdraft in full at any time – paying off the overdraft immediately with a loan that charges a lower interest rate reduces the total amount you have to pay.
Withdrawing money from cash machines guide
For many customers, the convenience and cost of withdrawing money from cash machines is a key factor when comparing high street and online banks in Germany.
Unlike in the UK, for example, where consumers can use any cash machine free of charge as a general rule, in Germany it can be expensive to use a machine belonging to a third-party banking group.
Here, banks without cash machines of their own that belong to a network, such as Cash Group or Cashpool, allow their customers to withdraw cash free of charge from other banks in the network.
Some online banks without a branch network offer credit cards that enable account holders to withdraw cash from any cash machine in Germany without paying a fee.
The overview of results generated by the Verivox comparison tool also shows how many free cash machines are available (“Automaten für kostenloses Abheben”).
How to open a bank account in Germany
When you use the Verivox account comparison tool to select an offer, you are taken to the relevant provider’s website.
Here you can apply to open an account by completing a form online.
As a new customer, you will need to prove your identity by way of the PostIdent or VideoIdent procedure.
Detailed information is provided in our guide to opening an account (German).
After you submit the form, the bank will send you a contract by post or e-mail.
To activate the account, you have to sign the contract and send it back to the provider. Customers without a German passport or ID card must submit other proof of residence in Germany.
If you aren’t an EU national, you will also have to provide your work permit or visa.
Requirements: Who can open a bank account in Germany?
In Germany, everyone has the right to have a bank account.
Customers who do not fulfil the requirements to open a regular checking account can open a basic account (Basiskonto) with any bank that offers current accounts.
The only condition for opening a basic account is that the account holder must be lawfully resident in Germany.
There is no permanent residence, minimum age or credit score requirement. Consumers can refuse to undergo a credit check.
The fees for basic accounts are usually higher than for regular accounts and there is no overdraft facility.
Arranging an overdraft
When bank customers open a current account in Germany, they are automatically granted an overdraft facility if they fulfil the conditions for receiving one.
Without a line of credit, their spending cannot exceed the amount held in the account at the time.
If an outgoing transaction exceeds the current balance, the payment cannot be made.
To qualify for an overdraft, customers must meet the following requirements:
Age of majority
Permanent residence in Germany
Regular income
Good credit score
Qualifying for a free account
Young people and students can open a free account with many providers without satisfying any further requirements.
Individuals who do not belong to this group are often able to open a free account only if they can deposit a certain minimum amount in the account for several months.
As sources of these regular deposits, some banks recognise only employment income, pension payments or educational grants paid according to the Federal Training Assistance Act (BAföG).
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