July 21, 2024

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Is it possible to access a loan in Germany as a foreigner?

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How to apply for a bank loan in Germany
Whether you’re in Germany for work, business or studies, you may at times come to a point where you need urgent financial help. It is nothing to be ashamed of. Many people need loans to survive and overcome difficult situations.

If you need to get a loan for business in Germany, you can read about companies that offer loans to businesses on reviewsbird.de to know the right platform to patronize.
You may be wondering if it’s possible to access loans as a foreigner living in Germany, the short answer is “Yes”. Nevertheless, you need to meet certain requirements.

Requirements To Access Loan In Germany:
1. A resident permit/permanent address.
2. A good SCHUFA score.
3. Must be at least 18 years old.
4. Must have a regular and stable source of income.
If you’re meet the above requirements, you can access one of the types of loans accessible by residents in Germany. Some might come instantly or may take weeks to process, depending on how qualified you are and the availability of requested documents.

Types of Loans in Germany
Available loans may fall under one of the following categories:
1. Small loans.
2. Instalment loans.
3. Car loans.
4. RahmenKredit.
5. Home loans.

Before proceeding to ask for a loan, ensure that you have a good credit rating also known as SCHUFA score.
What is SCHUFA score?

SCHUFA Holding AG is a German company that tracks and records your bills or fines over time and generates from this data what is known as the SCHUFA score. All German residents have a SCHUFA score, which is simply a rating score on their ability to pay bills. This score may affect you positively or negatively, as some companies take a look at your SCHUFA before granting you access to their products or services. Be sure to keep your rating score clean and high. Avoid late payments and fines whenever possible.

Where to Access Loan From?
The nature of your need determines which source is best to seek a loan from. You may need a quick instant loan with a short repayment period or a large loan whose repayment period traverses over a long period. Let’s explore some available options for foreigners living in Germany.
1. Banks: Banks in Germany allow you to access low-interest rate loans. You can access larger loans with a longer repayment period. You can use collaterals to access higher loan amounts. Your SCHUFA is important when applying for a Bank loan. Ensure that it is good. You must also be able to show a record of stable income. German banks providing loans to foreigners include Volksbank, the Deutsche Kreditbank (DKB), etc.
2. Small Loan Providers: Sometimes you may just need that quick little money to get overcome a hurdle. German small loan providers allow you to borrow a small amount of money with a short repayment period. The interest rate is usually high, but you may be able to receive your desired amount in an instant.
3. Loan Institutions: These institutions allow you to access loans just like banks, but with leniency on the requirements. You can access large or small loans. The only downside is that the fees are higher than those of banks. If you have a decent SCHUFA, you can follow this option. Most of these institutions have an online presence from which you can directly apply for loans right from the comfort of your house.

Which option is right depends entirely on what you want and your tolerance level. Don’t make the mistake of defaulting. It’ll affect your credit score badly and make your stay in Germany less smooth. Only borrow what you know you can pay within a certain period.

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