If you would like to take out a loan with Payday Champion, you must first submit a loan application. This is submitted to the bank, which decides on the basis of the application whether you are granted the loan.
As a rule, the application for the loan contains the following items:
- The amount of the loan
- The desired term of the loan
- The desired rates of credit
- Possibly. desired initial repayment of the loan
- The personal information (personal information, financial situation)
It should be noted that the future borrower has to submit documents that represent his creditworthiness as well as his economic situation. In particular, a high credit rating is a prerequisite for lending.
For the personal self-disclosure in the loan agreement, the borrower receives a form. The information provided in this form must all be proved. It is therefore important that you provide all the information about yourself truthfully. To be able to prove the information, the following documents should be submitted:
- personal details
Photocopy of the valid identity card or passport
- List all receipts and expenses
- Information on the job situation
Employment contract, salary statement
- Information on assets and liabilities
Existing loan agreements, account statements
- For self-employed and freelancers
Last income tax bill, revenue surplus bill
In addition, the lender will ask for SCHUFA information to verify the applicant’s creditworthiness. Check your SCHUFA entries to make sure all paid-up loans are settled.
However, before you submit your loan application, you should check that you meet all the conditions for a loan approval:
- Are you of legal age?
- Are you fully capable of business?
- Do you have a regular income?
- Do you have your permanent residence in Germany?
Calculate chances of success in advance
Also, check whether an application makes sense because of your financial situation. If you already have several current loan agreements or you regularly lose out at the end of the month, you can rule out from the outset that your application will be approved.
The loan application can be made either in person at your bank or by mail or fax. Many banks also have the option of submitting the application online. It is best to use a loan calculator – so you can compare different offers and choose the best bank. In our FinanceScout24 calculator, you can submit your application online immediately afterward.
Loan: It’s that easy
Compare conditions and select the desired loan.
Enter data. Non-binding credit offer received
Sign documents and send them to the bank (Postident procedure).
Bank checks the loan documents. Loan disbursement.
Loan application for mortgage lending
If you want to apply for a loan to finance your construction project or the purchase of a home, you will need to submit additional documentation in contrast to the traditional loan.
Above all, object documents are important. These include the address of the house, a land register excerpt, floor plan drawings and a hall map. If you would like to buy an existing house, you should also add object pictures. On the basis of these documents, the bank can prepare an offer tailored to your needs.
Lender and borrower
When lending, there are always two contractors: the lender and the borrower.
The lender or lender is usually a lending institution. As the bank usually grants the loan, the loan application is also submitted to them. Another word for the lender is the lender.
However, private individuals can also act as lenders: either relatives or friends who lend the borrower a fixed amount of money, or persons in various loan portals. However, this is rarely the case.
In order for a loan to be granted by the lender at all, it requires corresponding collateral – this enables it to keep the risk as low as possible. These are both real and personal securities.
The real collateral is a collateral security. Here, the lender has a right to recovery. This means that if the borrower can not pay his installments, the lender has the option to sell the assets in question. This can be, for example, the pledging of savings or securities. In the field of real estate financing, a mortgage is often added or a mortgage registered in the land register for this purpose.
For example, you are taking out a loan to buy your home. The bank requires the registration of a land charge in the land register. If you can not pay your installments for a long time, the bank has the right to foreclose your property in order to use the proceeds to pay off your debts.
In the case of personal securities, it is not just the borrower who is liable but also a third person. These include:
- letters of support
Hereby, a third party is to blame, if you can not pay your installments. In the case of a guarantee, this means, for example, that the guarantor is liable with all his assets if the installment payments fail to materialize.
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A borrower is a person who makes the loan request to get a loan approved. These may be individual persons, but also spouses, partnerships or communities of heirs. A company can also take out a loan and is therefore considered a borrower or borrower. If a credit agreement is concluded, there is a creditor relationship between the borrower and the lender.
In order for the loan to be approved, a contract is drawn up. This states the following points between the two parties:
|Obligations of the borrower||
|Rights of the Borrower||
|Obligations of the lender||
|Rights of the lender||
If the financial circumstances of the borrower change, he must inform the lender accordingly – he is subject to a duty to inform.
Should the economic conditions change, a borrower holding a variable rate contract may request an adjustment of the interest rate. If there is a fixed income contract, the borrower should contact the bank early.
The Loan Deed is the binding basis for the Loan Agreement. In common usage, the document is usually referred to as a loan or loan agreement.
The credit agreement in Germany is subject to the obligations of §§488 BGB – these lists the statutory minimum requirements, which has to fulfill each loan agreement. This basis also states that the following aspects must be part of the contract:
- Type of loan
- loan amount
- lending rates
- credit costs
- Credit Term & Amortization
However, this only applies to loans granted by banks. These credit agreements also require both parties to be named and recorded with personal details. In addition, the general terms and conditions (GTC) and the termination rights must be recorded.
For contracts with private individuals, the contract is much shorter: only the loan amount, the notice period, the interest rate and the collateral used are to be recorded.
If the contract is agreed with an employer, the loan agreement is similar. If you receive an advance from your employer at a surprisingly low-interest rate, you should record the total loan amount as well as the net amount and the interest rate in the contract. Also, remember to list all repayment modalities.
The following table illustrates this again:
|Contract with employer||Contract with a private person||Contract with bank|
|Net loan amount|
|Effective interest rate|
|Type of loan|
Note the SCHUFA clause in the contract
In most cases, a SCHUFA clause is included in the loan agreement. By this clause, you agree that your data will be passed on to the SCHUFA. This is to check your creditworthiness and reduce the risk to the bank.
What to pay attention to in the loan agreement
There are some points to keep in mind when you want to arrange a loan contract:
- Make sure that securities and SCHUFA information are required. There are seldom lenders who grant the loan without SCHUFA’s insight – this is usually paid by the borrower at a very high-interest rate.
- Always read the fine print. Here, often points are set, which the borrower easily overlooks, but which could put him at a disadvantage.
- Check if any hidden charges are listed that may not have been previously discussed.
- Pay attention to whether the receipt of the loan is linked to the conclusion of a residual debt insurance, for which additional costs are incurred.
- Check if special repayment arrangements have been agreed. This is worth it if you know that you will receive a larger sum during the term.
- Also, keep in mind that the contract regulates how installment payments are handled.
The loan terms are conditions that the lender has set in terms of financing – only if the borrower agrees to these terms, a loan agreement is concluded. Usually, these are general loan conditions that are the same for each loan and are applied across the whole range of loan processing.
As a rule, the credit institutions formulate terms and conditions within which the terms of the loan are determined. Thus, the company can ensure that all loans are agreed in a single contractual framework. The basis for this is the AGB-law.
Contents of the loan conditions are usually
- Obligations and rights of the borrower
- Obligations and rights of the lender
- The right of withdrawal
- The right of termination including notice periods
Loan approval: The decision
With the loan approval, the lender legally binds the borrower to obtain the loan. You can find out whether your application has actually been approved after the potential lender has verified your creditworthiness.
When you receive feedback varies from bank to bank. Normally, it will take two to fourteen days for you to receive a notification. If the bank has not contacted you after about fourteen days, you should contact your contact person and ask for the status of your project. In order for the application to be processed as quickly as possible, you should make sure that you complete the complete details and submit all relevant documents.
While you wait for the grant, the lender checks your data. He examines
- Your collateral
- Your financial situation
- Your SCHUFA entries
If the lender evaluates your credit rating positively by means of this assessment, you will usually receive the loan approval or loan rejection by mail. In the case of a license, a loan offer is usually sent directly to you as well. The loan offer usually contains the following items:
- loan amount
- running time
- nominal interest rate
- effective interest
- collateral value
- Information about installments, special payments, and repayment terms
Change of loan offer!
Depending on how the market develops, the details in the loan offer may change. In case of changes, you will be informed directly.
The loan was granted
Once your loan has been approved, you will receive the loan offer tailored to you personally.
- Check the offer for all important aspects.
- Agree or reject the offer.
- Check all aspects of the loan agreement. If you have any questions, ask your contact person.
- Sign the contract and send it back to the bank.
- Hand out any collateral to the lender.
- You will be paid the loan to your account.
The loan relationship comes into effect when you have signed the loan agreement with the declaration of consent and sent it back to the bank. So as long as you do not sign the contract, you can contact your lender and possibly change various aspects.
The loan was rejected
It may well happen that a loan application is also rejected. Reasons can be:
- Bad creditworthiness through SCHUFA information
- No collateral
- No regular income
- Several loans that are paid off at the same time
- Incomplete documents
In this case, be sure to check why your application was disapproved to change these factors. It is important to have a look into your SCHUFA entries: These may already provide information about a bad credit rating. Possibly loans are here registered, which have already paid off but have not been deleted. If so, you can try again to have your application approved by your bank.
You may be able to choose a second borrower or guarantor as collateral when trying again – this will increase your chances of getting the loan application the second time.
The following alternatives are also possible if your loan has been declined:
- Take advantage of debt counseling: In a personal conversation, your financial situation is discussed and tries to solve any problems.
- Try a personal loan: If you present your situation truthfully and in detail, private borrowers will grant you a loan.
- Submit your application to another bank, which may approve your application.
Worth knowing about the loan application
As a rule, recipients of social assistance receive no credit from a conventional bank. Nevertheless, those affected have the opportunity to receive a loan: The social welfare office as state authority usually grants loans at small sums.
Also at the job center, formerly known as ARGE, a loan can be applied for. Here, however, only loans are granted, which are used for purchases that are necessary for a living. The purchases should fall below the standard benefits. The loan is usually repaid without interest and with a maximum repayment of 10 percent.
The social welfare recipients must, however, prove that they can not pay for the planned acquisition through their savings. Also, the acquisition must be mandatory – such as the payment of a washing machine or a refrigerator.
Although often small, it makes sense to get in touch with the job center in advance to see if the loan would be granted.