Interested parties should compare credit institutions in advance to find the cheapest loan at the best conditions. Online direct banks mostly have low administration costs and can offer particularly good conditions for a loan.
Prepare the loan application
The future borrowers must take the following criteria into account when deciding on a loan based on their personal economic circumstances:
- the amount of the loan
- the term of the loan amount
- the amount of repayment rates
- the interest rate
- the type of loan (e.g. small loan or building loan)
- the available monthly net income.
Necessary documents for the loan application
Interested parties must submit the following documents for a loan application to the selected credit institution:
- Self-disclosure form (personal data, financial situation data)
- Consent to the Credit bureau query
- Corresponding documents for the respective forms (the last three proof of salary, existing loans, savings)
- for real estate loans – certain information about the building and the property.
If the future borrowers have all the documents for the loan application, they can send the required documents to the bank. After receiving the documents, the bank will start a Credit bureau query and check the documents and documents sent in carefully.
The loan application was accepted
If the documents are assessed positively by the bank, the loan contract and the Postident document will be sent to the customer. The customer only sends the Postident document back to the bank and is now waiting for the loan amount to be released.
Once approval has been given, the money will be transferred to the applicant’s account. This whole application process takes at least six working days.
- If a loan application is made online, the processing time is often considerably reduced. Proof of income can then usually be sent in digital form.
Instead of Postident, online web ident or video ident is possible. So it is usually possible that the loan application can be processed within three days.
The loan application was rejected
The bank may reject the loan application. It is usually very difficult to get an exact explanation from the bank. The rejection is mostly attributed to the bank’s internal review.
However, there are some clues that have already led to the rejection of many other applicants, including:
- very young first-time applicants without previous Credit bureau data
- older applicants (higher risk of default)
- Sole earner
- negative Credit bureau information
- insufficient net income.
If the rejection of a loan application could not be triggered by a negative Credit bureau entry, it is advisable to submit the loan application to another bank. Likewise, long-standing customers usually have high chances of getting a loan application from their branch bank.