How to qualify for a loan in Germany

Whether it’s the house of your dreams, a new car, or a long-awaited trip around the world—there are many reasons to consider applying for a loan. If you’re a first-timer and full of questions, fear not—you’ve come to the right place. We’ll explain everything you need to know to qualify for a loan in Germany.

First of all, think about why you want a loan and what scope of loan you’re looking for. Do you want to buy a new car or simply cover the costs of that last electricity bill? Next, ask yourself about the logistics of paying back a loan—how much money can you set aside for monthly payments and how long will it take to pay back your loan? 

If you’re interested in a smaller loan, you may want to apply for an overdraft credit. Overdraft allows you to overdraw your account balance—up to €10,000 at N26—to cover your expenses. You’ll be charged interest only on the amount you use. Learn more about how to apply for overdraft at N26 here. 

However, if your dreams need more funding, you can request a personal loan. This means borrowing a certain amount of money from your bank to spend on your vacation, educational training, or a new car. You can even use it as debt consolidation to settle another, more expensive loan. Just like any other loan you have to pay it back—including interest and amortization installments. The loan interest rate depends on the set term and the chosen amount. At N26, for instance, you can request a personal loan between €1,000 and €25,000, and select a repayment plan from six to 60 months. 

As mentioned, you should take the time to think about how much money you actually need and what your budget currently looks like. Only then can you decide how much you’re able to pay back each month. Once you’ve answered those questions, use our personal loan calculator to get a quote. Remember that since you’re borrowing money from a bank, you’ll have to pay back the loan plus amortization and interest rates, as well as the original loan amount.

Whether your loan request is granted and how much you’ll get depends on your personal information and credit history. Your creditworthiness is determined by your credit score and history, your occupation, whether you own real estate, and your Schufa credit score. A bank or lender creates an internal ranking based on these factors to determine your loan worthiness and amount. 

To apply for a personal loan in Germany you must be at least 18 years old. Some banks also set an age limit, usually 65, which is when residual debt insurance expires. This type of insurance guarantees the settlement of a loan even if the creditor can no longer pay the installments. You also have to be registered in Germany and hold a German bank account to be eligible.  

Regular income is another common requirement, but is not a guarantee that you’ll actually get the loan. Your earnings will be checked against your monthly expenses to determine whether you’re able to pay the monthly installments. Self-employed people, freelancers, or students are often thought of as a higher risk group by banks, but there are often special offers for these groups as well.

If your credit score is considered risky compared to the requested credit amount, banks might want to secure the loan with a surety or co-signer. 

In a nutshell, to be eligible for a loan in Germany you must meet the following criteria:  

• be at least 18 years old
• be a resident of Germany
• hold a German bank account
• meet the minimum required credit score
• receive a regular income
• if needed—have collateral, sureties and additional insurance (such as life insurance when applying for a real estate loan)

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Have you ever applied for an apartment in Germany? Then you may already be familiar with Schufa, the German general credit protection agency. The company collects and saves payment histories from consumers and provides them to other companies that are part of the credit protection network. This helps minimize the risk of payment default and checks the creditworthiness of consumers. According to Schufa, 90% of all adults living in Germany have a positive credit score. 

Negative credit scores can be caused by several factors—such as unpaid bills, canceled/multiple standing credits, or entries in public debtor registers. Everyone can request their own credit history from Schufa. It’s important to note that Schufa doesn’t know or save information on your nationality, occupation, address, etc.—it only serves as a way to check your credit history.

It’s almost impossible to obtain a loan with a negative Schufa score. You might find loan offers independent of credit ratings. However, these often come from dubious companies—so carefully check who is giving you a loan. There are still options if you have a negative Schufa score, some credit institutions, banks, fintechs, etc. will still work with you. And always do your research on the potential lender to make sure they’re legitimate. 

Want to request a loan without the wait and unnecessary paperwork? Get a loan with N26 Credit in just a few minutes and finally kickstart your dreams! Use our credit calculator to get an offer that suits you. You can qualify for up to €25,000 with no paperwork—and it’ll be deposited directly into your N26 bank account. Find the loan, and bank account, that suits you best—start by opening an account in minutes!