In today’s world, loans are still a popular option for many Germans to temporarily expand their financial scope. It is basically irrelevant whether this is for the purchase of a luxury item or for the realization of your own four walls. The basic idea behind a loan is the same in every case. The lender, in this case a credit institution, lends its own capital to the borrower. The lender can get the temporary waiver of his own capital in the form of interest. The amount of this loan interest is based on the creditworthiness of the customer, the term of the loan and, last but not least, the amount of the loan taken out. The repayment of the loan is usually guaranteed by monthly repayment installments to be paid by the customer. In the loan agreement, the latter undertakes to settle the entire loan debt in previously negotiated installments.

Make a loan comparison before taking out a loan

Make a loan comparison before taking out a loan

The amount of these rates varies depending on the amount of the loan interest and the chosen term. In general, it can be said that the shorter the loan term, the lower the interest charge, but the higher the monthly loan installments. A healthy average should be chosen here so that the borrower does not experience financial constraints when repaying the loan, which can have a negative long-term effect on his further creditworthiness. To take out a loan, the loan seeker contacts a credit institution of their choice. It makes sense to choose this according to the most favorable conditions. A loan comparison before taking out a loan makes sense in any case and can help to save money. The differences between the individual credit companies can be serious in some cases.

Important criteria to be check

Important criteria to be check

In a personal conversation with the lender, the borrower stores his personal data and, ideally, proof of regular incoming payments. These are one of the most important criteria for successful lending and play a major role in the credit check. This also includes a query from Credit Bureau, which serves the security of the lender. Here, for example, open or recently repaid loans and other payment obligations from purchase transactions are listed. If the credit check is positive for the customer, there is usually nothing standing in the way of lending. All important conditions are now recorded in a loan agreement. The customer will receive the corresponding loan amount credited to his checking account within a few days of the conclusion of the contract.

In individual cases, the money can also be given in cash. From this point in time, the borrower undertakes to pay the monthly repayment installments until the loan has been paid in full. In the event of temporary payment difficulties, which may arise from unexpected unemployment, for example, it is advisable to contact the relevant credit institution as early as possible so that a solution that is satisfactory for both sides can be found. For example, the lender can waive payment of the due loan installments for a certain period of time until the borrower’s financial situation has relaxed again.