Nowadays it is almost natural to finance a house, a car or other consumer goods with a loan. However, a loan is not a blank check but is only granted if the borrower has sufficient collateral.
The higher the amount of funding, the higher the collateral must be.
This is essentially due to the fact that the banks and savings banks want to be sure that the borrower is able to repay the sum borrowed, including interest, in full and within the agreed term. For this reason, a credit check is carried out prior to borrowing. Only when this credit check is positive, the applicant can get a loan.
How much credit do I really get?
The credit and the income
There are several factors involved in answering the question of how much credit a person can get. For a rate or consumer credit, which is given by banks and savings banks, a regular income and a positive Credit bureau information in the vast majority of cases. The income should be in reasonable proportion to the amount borrowed. Therefore, in the first step, it is also important to answer honestly the question “How much credit can I afford?”. The bank will do a thorough audit of revenue and expenditure to answer this.
Only if, after deducting all costs, there is still enough room to pay monthly mortgage payments, including interest, can the claimant obtain the loan. Otherwise, the loan must be reduced or the application must be rejected. For people who only receive an income that is below the statutory seizure limit, it is not possible to get a loan in Germany. Here, the bank would have no way to access the income of the borrower in case of a payment arrears and to seize a part of it.
How much credit do you get at what salary?
The maximum amount of credit a person can receive is determined individually by the bank.
If the salary is very low and is only slightly above the seizure-free limit, usually only small loan amounts of a few hundred to a few thousand euros are possible. An exception is made only if the borrower can show additional collateral for the loan.
If he owns attachable valuables, he can increase his credit rating significantly. The most important prerequisite for this is that these valuables be left as collateral during the term of the loan so that the bank can call on it at any time if necessary.
If you want to get a loan, you should have the following documents ready:
- proof of income
- employment contract
- Proof of additional collateral that can be used for the loan.
Get credit – with or without Credit bureau?
In Germany it is not possible to get a loan without Credit bureau from a bank or savings bank. The Credit bureau information is an important feature when it comes to assessing the creditworthiness of a person. If there are negative entries, the chance of getting a loan almost always drops to zero. In this case, it would be possible to contact a private lender or a bank domiciled abroad.
However, it would be very important to pay attention to the credibility of the lender and not to pay any fees before it has ever come to award a loan. If the lender insists, it is actually a dubious lender who is only interested in ripping off the customer. A loan will most likely never come.
Can people with no regular income get a loan?
The self-employed, freelancers, housewives, students, apprentices, unemployed or recipients have a much harder time getting a loan than workers, employees or civil servants. Many banks exclude self-employed or freelancers in principle from lending, other banks may be willing to give a loan to this group of people. In any case, here are other collateral than required by employees or civil servants.
Which these are, informs the bank on request. Other groups also ask themselves how much credit is possible on what income. Although unemployed or recipients receive a regular monthly amount of money, this amount of money is not sufficient to serve as collateral, but is solely for the livelihood. For this reason, these persons are not creditworthy for the banks.
Car Loan: How much credit do I get?
A car loan is a loan that is expressly earmarked and may only be used to finance a new or used car. Such a loan is given by the bank or the dealership. Who wants to get a loan, should have a regular salary and a positive Credit bureau information. There is also the advantage that the car can serve as security. This means that even people can get a loan for the car, which have no or only bad chances with a normal installment or consumer credit. If the loan for the car is completely paid off, the car finally becomes the property of the buyer. Until then, it remains the property of the dealer.
Credit for the house and the apartment: How much credit can I get?
Buying a house or apartment is a life-long decision that should never be taken lightly. Financing needs are very high and generally well beyond the financing needs of other consumer goods. The collateral for a loan must be correspondingly high. A future builder or homebuyer can only get a loan if he has an income that is secured in the long term and is so high that it is easily possible to repay the monthly loan installments including interest.
Anyone who lives in a property does not have to pay rent, but only pay the loan installments. Nevertheless, he should keep in mind that the total financing requirement is very high and for a property is almost always in the six- to seven-digit euro range.
In this context, the question arises: how much credit does one get at what salary? It can not be a flat rate, but only after thorough examination answer.
The following documents are required by the bank in order to be able to verify the creditworthiness:
- proof of income
- Credit bureau information
- financing needs
- Willingness to accept a mortgage or mortgage.
If necessary, further documents can be added. Only if the bank has no doubt that the borrower meets his obligations, he can get the loan.