Online loans are a good alternative to requesting credit from your house bank. Here you can get an overview of possible loans quickly and without the help of a bank advisor. The request can be made directly and without obligation. At best there will be initial feedback within a few hours. If you do not want to take out the loan online, you can also prepare for a conversation with the bank advisor online.
How can a credit application be started online?
1. What is an online loan in general?
- Lending over the Internet
An online loan generally refers to a loan or a loan that is granted by banks via the Internet. A credit request can therefore be made online via the homepage of the respective bank.
- Mostly classic installment loans
Most online loans are also installment loans. The main providers of online loans are mostly direct banks, but an increasing number of credit institutions that can access a broad network of branches. This means that the debtor, i.e. the actual borrower, is released from the debt of having to make his payments immediately even with an online loan.
- Repayment according to plan
The respective payments can therefore be made according to an agreed payment schedule at certain intervals. The banks therefore make an advance payment, even for an online loan application.
2. Under what conditions can a loan be taken out online?
If you want to take out a loan online, you have to meet various requirements in order to receive it later.
- Legal age and German account
In addition to the requirement of legal age, the customer is also required to provide proof of a German place of residence. Furthermore, the banks also require that the customer has a checking account with a German bank or bank. After successful application for the loan, the sum of the online loan is paid into this current account.
- Proof of identity via Postident
The customer also needs a valid passport or ID card to send the loan application back to the respective direct bank using the PostIdent procedure.
- Sufficient income and good creditworthiness
The bank also ensures that the customer also has sufficient income and a secure employment relationship. This employment relationship must also be unlimited and the trial period must have already ended successfully. Many banks value regular and monthly customer income. In order to prove this, the borrower must attach the last two to three pay slips to the loan application.
- No credit request for third parties
It is also important that the borrower accompanies and carries out the loan process on his own account and in his own name. This is important so that the respective banks can ensure that the online loan is not taken out for possibly insolvent third parties.
- Loan for self-employed only after at least 2 years of activity
Freelancers and the self-employed can have difficulties with an online loan application. Because these, due to their mostly irregular salary or income, represent an uncertainty for direct banks and credit institutions. If the self-employed or the freelancer nevertheless wants to apply for a loan online, most banks require proof of income in the form of the last two to five of the so-called business economics Evaluations. This business evaluation can be shown, for example by income notices or balance sheets.
- Query the creation data
In order to finally be able to grant a loan, many banks check the general creditworthiness of the borrower, for example via Credit Bureau.If the Credit Bureau file contains a negative entry or a poor Credit Bureau score, the chances of an online loan decrease enormously. Because these two factors could indicate poor payment behavior or even insolvency. However, if the income is too low or the Credit Bureau score is poor, it may be advisable for a borrower to reduce the loan volume when applying again. In this case, it can also be helpful to include a second borrower with your own secured income in the application. Because the alternative of taking out an online loan without Credit Bureau can involve many dangers.
3. Possible examples why can an online loan be useful?
An online loan is of course a good solution for fulfilling the borrowers’ own dreams and wishes. However, in order to be able to obtain the right loan offer in the end, it is advisable to use the various calculation options offered by loan calculators online. So the borrower can get a profitable comparison.
Depending on the goods to be purchased, the form of credit is also decided. An annuity loan can be suitable here, for example for financing a home. Or also a current account credit, for the repayment of the installment of your own current account. It is therefore crucial to know for which concern, or project, a loan is needed in order to crystallize the respective loan form. Then a loan calculator can be used free of charge via various online portals to filter future costs clearly.
In addition, an online loan can also be a good option for a debt rescheduling, possibly of several installment loans or a slightly larger loan. The borrower can save so much money because the new loan or the new financing can be taken out at much better and cheaper terms. Debt rescheduling is also possible in order to avoid high interest rates.
Generally speaking, a debt rescheduling is understood to mean that a borrower combines his or her current and several loan obligations into a single and therefore entire loan. In most cases, rescheduling is a good option, especially if the several loans have different terms and different installment levels.
This process can of course also be done online. So if a borrower wants to reschedule an existing building loan or an installment loan, the current interest rate position, the existing conditions of the existing loans and a comparison of the desired providers must be taken into account. Furthermore, the interest rate factor of the existing loans plays a key role in debt rescheduling.
If the existing loans have high interest rates and rescheduling is to take place in the current low-interest phase, the sum of the interest and the repayment should play a major role in the decision to reschedule. For this reason, a comparison of the previous costs, to the possibly future and summarized costs from a debt restructuring, can be useful for the borrower.
4. The special forms of an online loan – use the loan calculator efficiently!
Apply for the installment loan online
Generally, an installment loan is a loan that has a fixed interest rate and constant monthly installments. An installment loan is therefore the generic term for many different types of credit. Personal loans and instant loans also fall under an installment loan. In most cases, amounts between $ 1,500 and $ 50,000, with terms between 12 and 72 months, are applied for with this form of online credit. However, the interest rates vary depending on the provider of an installment loan.
The comparison of an annuity loan
An annuity loan is probably the most sought-after real estate loan in Germany. With this type of loan, the borrower has to pay the constant rate over the entire term. With an annuity loan, the repayment and the interest are settled jointly in constant installments. Here, a loan calculator is recommended for a comparison of the respective interest rate, the remaining debt, the repayment rate, the term, the loan amount, or also the possibly different final rate.
The effective annual interest rate must also be taken into account for an insightful repayment plan. Furthermore, this form of loan is to be understood as a sub-form of normal credit. The interest rate is also determined over a fixed period of time and the borrower is therefore protected against a possible future rise in interest rates. Nevertheless, with an annuity loan, the interest is somewhat higher the longer a fixed interest period has been agreed by the borrower.
There may also be some residual debt after the fixed interest rate expires. For this reason, follow-up financing may be required for a borrower. With follow-up financing, the interest may also be even higher for the borrower.
Compare the repayment loan optimally
The repayment loan includes a subdivision of the repayment and the interest. Both factors must therefore be paid separately. The basis for calculating a comparison is, for example, the remaining debt, the repayment period, the repayment rate, or the loan amount. For the detailed repayment schedule, the effective interest rate and the loan interest rate must also be calculated.
Since a repayment loan is the generic term for an installment loan and an annuity loan, it can be used wherever irregular repayments are to be made. This can be the case, for example, with a current account overdraft facility.
How does a mortgage loan compare?
A mortgage loan usually includes more complex calculation bases. A mortgage loan also uses a repayment and a detailed repayment plan. Special repayments and possible follow-up financing of real estate are also taken into account. Accordingly, a mortgage loan uses the mortgages of at least one secured property.
Comparing overdraft interest rates can be worthwhile
An overdraft facility can also be taken out as an online loan, for example when changing banks. Here it is crucial to also calculate and compare the overdraft interest or overdraft interest on the overdraft facility. After all, every credit institution for overdraft facilities for private individuals usually has only limited overdraft facilities for non-cash payment processing in their portfolios.
Since most banks allow overdrafts on the checking account up to two or three times a month’s net income, attention should be paid to the respective interest rates. These can fluctuate between 10 percent and 13 percent, depending on the bank. So if a borrower only needs smaller amounts in a short period of time, an overdraft facility would be a good option.
What does a credit line include?
The credit line is a special form of the classic installment loan. The terms on-demand loans or vario credits for a credit line are often included. For this reason, a borrower has access to the required money on a credit line. The repayment and interest are based on an agreement determined in advance. Some direct banks and credit institutions also offer online applications for this special form.
Finance the desired dream car
With auto financing, various loan options can be used. For example, an installment loan, with a repayment that is constant and precisely defined, can be made at the respective bank. Or a car loan from the dealer can also be used by the borrower. Car loans are usually granted by special car banks that only deal with vehicle financing.
Use instant loans efficiently
Another form of installment loan is an instant loan. This can also be applied for online. An instant loan is usually very suitable if a particularly fast payment is desired. The payment is usually successfully completed after a few working days. Also, it is not always necessary to state the purpose for an instant loan. Nevertheless, an instant loan can often be useful for a borrower instead of an overdraft loan that is too expensive.
The small loan option
A small loan can also be used, for example for the purchase of a used car. However, a loan amount of 5,000 dollars may not be exceeded. A small loan is therefore particularly suitable for a borrower with smaller purchases.
5. The possible pitfalls of an online loan
As the special forms already show, it is essential that the desired loan is compared in advance. Accordingly, the various online loan offers of the banks should be compared by the borrower in advance. Free comparison portals are particularly suitable for this.
- Beware of shop window rates
Furthermore, the attractive interest rate offers can create additional confusion. The “interest rates” often mislead those interested in credit and lure them into a fateful trap. This is because the interest shown only serves as “shop window interest”, which in the end only represents the effective interest. However, these attractive terms of effective interest can only be used under the best possible conditions. These conditions would be, for example, a very good credit rating and at the same time a certain loan amount and term.
- Beware of hidden fees
A fee calculation for the respective loan offers is also not serious. Competent and reputable credit providers refrain from making an additional payment when creating credit offers or setting up credit on peer-to-peer platforms. An agency fee should therefore only be payable when a loan agreement is concluded or when the loan amount is paid out. In addition, the so-called “Credit Bureau-free loans” have their pitfalls. For this reason, the creditworthiness of a borrower is also thoroughly checked for an online loan. Online credit can only be granted if the result is a positive result, the check of the credit reporting agency. This, of course, puts the providers who advertise Credit Bureau-free loans for those interested in credit very much in question.
- Consider termination options
Caution is also advised for the borrower when it comes to hidden costs and fees when concluding a loan contract. Accordingly, the borrower should pay attention to whether early termination would be possible or whether there would be additional costs. Careful reading of the terms and conditions and the contractual terms and conditions offers a good solution for those interested in credit so that they do not experience any inconvenience later. However, if the information on the general terms and conditions is missing on the homepage of the respective provider, this is a clear signal for a prospective customer to refrain from this loan offer. Furthermore, care should be taken to ensure that the loan offer is only possible in connection with, for example, taking out residual debt or life insurance.
- Check the reliability of the provider
A certain reliability and accessibility should also be guaranteed for the borrower by the chosen loan provider. If the information on the provider’s website is missing, this is another clear warning signal. The prepayment penalty factor is also a key feature. Because if a borrower wants to quickly minimize their respective debt burden and accordingly want to repay the loan early, there are providers who charge enormous fees due to the lack of interest gains. Accordingly, great attention should be paid to this factor. Customer reviews can also be another good source of information about the desired provider. If these are negative, the borrower should not contact the provider here either. Furthermore, the intended use of the desired loan should be taken into account. The borrower should also pay attention to the correct choice of loan form.
6. The advantages and disadvantages of an online loan compared to a bank branch
Advantages of online credit:
- Attractively priced
Probably the most significant advantage of an online loan, compared to the conventional loans of a bank branch around the corner, is the favorable cost factor. Because with an online loan request, there is no detailed and personal customer advice. The interest on an online loan is often cheaper than the interest on an installment loan at a bank branch.
- Apply easily
In addition, the application for the desired loan is simple, convenient and can be carried out in a matter of ten minutes. The requested information includes, among other things, all important personal data and information on the financial and personal circumstances. This is of course all recorded online by the borrower on the home computer. However, it is important that this information is entered carefully and truthfully by the borrower, as otherwise there may be significant financial or legal consequences.
A targeted comparison also opens up other low-cost options for the borrower.
Disadvantages of online credit:
The only general disadvantage of an online loan is probably the failure to provide personal support, which is known from a bank branch.
With the variant of an online loan, with an immediate commitment, a higher interest rate compared to a conventional online loan would also be mentioned. Since even faster processing of the bank is required here. Here it is important that the use of an online loan with immediate approval should be checked in advance by the borrower with the respective benefit and purpose.
Since many providers offer quick availability of the desired money on utopian terms, caution should always be exercised with the borrower in such cases. Accordingly, borrowers should obtain information about the respective provider of the online loans at an early stage.
7. What scope do you have with a bad Credit Bureau or credit rating?
Unfortunately, with a negative Credit Bureau or poor creditworthiness, very little or no room for maneuver for those interested in credit can be expected. Here it is only advisable to contact your own bank, as they know the payment processes and the background.
8. The perspective interest rate developments of online loans
In general, the interest rate is determined by many different factors. For example, the interest conditions can also be influenced by the chosen term of the contract or by any existing equity. It is generally true that the shorter the contract term and the higher the total equity, the lower the interest accruing. Of course, the borrower’s credit rating must also be right.
Accordingly, since the cost of a loan and the income and expenses of the borrower play a major role, these should always be kept in mind by the borrower. The base rate always forms the basis for the amount of an interest. The key rate development is an important part of a borrower’s own cost structure. The opinions of experts regarding a potential interest rate trend are currently in a stable to slightly increasing trend.
9. Is a personal loan a profitable alternative?
Even with a classic personal loan, one or more people can apply for and take out a loan. However, it should be noted that smaller projects, or objects, are financed with a personal loan. This would be, for example, computers, washing machines, or music systems. Accordingly, a basic requirement for granting a loan is the private and non-commercial use of the required goods.
So it can be seen that earmarked financing arrives with a personal loan. A personal loan can be divided into different types of credit. For example, the overdraft facility should be mentioned here. Since this would have to be added to the borrower’s own current account, the variant and application for an online loan would be possible, for example when changing the respective bank.
An installment loan is also a form of personal loan. This is often referred to as consumer credit. Furthermore, the framework credit, or the call credit, is a possibility of personal loans. Here, the money is borrowed and repaid afterwards within a defined and certain framework, depending on the needs of the borrower. In addition, mortgage lending is part of the private loan.
An online application can also be made here. A building loan is generally a long-term loan, which is used for the purchase of real estate and can be made up, for example, of a property loan or a home loan.
In contrast to a personal loan, no purpose is defined for a personal loan. Thus, the borrower has a lot of freedom to use the loan. With a loan, a loan contract is always agreed for the respective condition, loan amount, interest rate, the monthly installment amount, or loan amount.
Only when the submitted documents and all the required signatures have been checked can the borrower have the desired personal loan. A personal loan can also be applied for online from the desired provider.
In general, however, an online loan, unlike a personal loan or a bank branch personal loan, has more leeway with even lower interest rates. The simple handling, application and quick processing of an online loan is what makes it so attractive for borrowers when it comes to forms of credit for personal loans and personal loans.
In summary, it is evident for borrowers and those interested in credit that online preparation can offer real added value if you thoroughly prepare and examine comparison offers. Depending on your own needs and calculation bases, this form of credit can be worthwhile. The quick processing can be very worthwhile for those interested in credit who have a good grasp of electronic media and tools. However, it is important to identify a suitable and competent provider as a reliable partner in order not to experience disappointments and consequences later on.