Loan types: an overview of the most common ones

 

There are many different types of credit and the general term for all is the installment loan. Here, as can be seen from the name, the loan is repaid to the creditor in installments. The interest rate and monthly installments remain the same over the specified term.

Installment loan: the loan with monthly constant installments

Installment loan: the loan with monthly constant installments

It is typical of the ordinary installment loan that the installment is always made up of an interest component and a repayment component. The effective annual interest is calculated on the respective remaining loan amount and thus the remaining debt decreases during the term and the borrower pays less and less interest monthly. The lower interest component is then offset by a higher repayment component. The loan is fully repaid at the end of the term.

Overview of other loan names

Overview of other loan names

There are other names for the installment loan, such as consumer credit, consumer credit or online credit. With the latter, the lending is done online via the Internet and it is usually associated with more favorable terms than, for example, a loan from your own bank. There are also platforms that compare different loans online, for example smava. However, there are also loans with slight differences, which are all classic installment loans:

Instant credit

The processing of the credit request is particularly quick, which means that the money is quickly made available. This is possible because the lender uses an automated process and usually the borrowers receive an acceptance or rejection on the same day.

Credit from private

The difference with a private loan is that the lender is not a financial institution, but one or more private individuals. Such loans are granted by certain platforms that act as intermediaries, for example auxmoney or Lendico.

Officials credit

The civil servant loan is a loan that is usually accompanied by particularly favorable terms and can only be claimed by civil servants. The better conditions are that civil servants are considered to be particularly creditworthy because they have a very secure income.

Auto loans

The car loan is a dedicated loan and most of the time the interest rates are lower than normal because the vehicle serves as security.

Modernization credit

Another dedicated loan that supports the renovation or modernization of apartments. Unlike a real estate loan, it is not entered in the land register.

Loans without Credit Bureau – requirements

For many consumers with financing needs, the problem arises that the Credit Bureau information does not look quite as good, and the banks, therefore, refuse to approve the loan.

However, contrary to popular belief, negative Credit Bureau entries are not necessarily an obstacle to finding a loan – it also always depends on the overall situation in which the potential borrower finds himself.

Loans without Credit Bureau – requirements

Loans without Schufa - requirements

Of course, there is also the possibility to get a loan without Credit Bureau. Before you go this route, however, your own situation should be analyzed in more detail and not immediately painted in the darkest colors: the first course should lead to the house bank where you have been a customer for many years and are known accordingly.

Because the advantage of the house bank is simply that the scope for negotiation is greater: the bank does not want to lose the potential borrower as a customer, but this is a risk if the loan is refused. However, this does not mean that the house bank inevitably makes a loan approval against all concerns and aspects that speak against lending: the goodwill of the bank is just a little higher, which in turn also depends on how good the customer relationship is actually.

Nor is it said that negative Credit Bureau entries necessarily mean that you cannot get a loan from a reputable German bank because the creditworthiness is checked more extensively than on the basis of Credit Bureau information. Factors for checking the creditworthiness are, for example, the monthly salary, saved assets and overall the income and expenditure structure of the loan applicant.

Interested parties who actually no longer get a loan

Interested parties who actually no longer get a loan

Due to their creditworthiness can apply for a loan abroad because outside of Germany a Credit Bureau query is not relevant. Nevertheless, the creditworthiness is also checked here, which means that a fixed, not too low and above all permanent salary of the potential borrower is necessary.

If the Credit Bureau-free loan is applied for in Switzerland, there must also be no Swiss debt, but debt in Germany is irrelevant. The respective living situation of the customer is also illuminated abroad: how many people must he provide with his salary? How old is the customer? How much are his monthly expenses? Account statements are required to evaluate the latter.

However, borrowers have to say goodbye to a Credit Bureau-free loan from Switzerland, Austria or Spain from the idea that it is a cheap loan, as a rule, there are interest premiums that the borrower has to bear to secure the bank.