A loan for foreign citizens is basically possible and not a problem. Discrimination against foreigners against German citizens violates the principle of equal treatment and is not permitted. Therefore, the same application requirements apply as for German citizens.
However, some additional documents must be submitted in individual cases. The type of application depends on whether the applicant is a citizen of an EU country or another country. In this article you can read which application requirements have to be fulfilled and where you can get cheap loans as a foreigner.
General application requirements
Each applicant must have sufficient creditworthiness to receive a loan. Regular income from self-employment or employment is essential. The same applies to positive information from credit agencies such as Credit Bureau.
The determination of score values can be difficult if foreigners have only recently moved to Germany. In such cases, credit bureaus often do not yet have enough data available to be able to classify them into a certain score class.
Do not apply for a loan immediately after you have established a place of residence in Germany. Anyway, you have to open an account in Germany before you can take out a loan. Wait at least a few months before borrowing so that you can at least provide the bank with bank statements that show your payment history. Every borrower must fulfill these application requirements, regardless of whether they are foreigners or citizens in Germany:
Borrowers must be of legal age.
- You have to take out the loan for yourself, i.e. act on your own account.
- Borrowers have a permanent place of residence in Germany.
- An account with a bank based in Germany is required.
- Information from credit bureaus (Credit Bureau) must not show any negative characteristics.
- There must be a regular income.
Most banks only lend to workers if they have been with the current employer for a few months and have survived the trial period. Mostly, a period of employment of three months to six months is required. If your employment relationship is limited, the term of the loan may generally not exceed the duration of the time limit.
For self-employed people, businesses and freelancers, a certain period of self-employment is usually required. Most of the time, they have to be self-employed for at least two years to get a loan for private purposes.
Banks expect documents to prove the application requirements. For example, current pay slips must be submitted over a certain period of time. Current bank statements are also often required.
Self-employed people can prove their income through income tax assessments and annual accounts. Sometimes business evaluations are requested. Finally, you must prove your identity by presenting identification documents.
Lending to EU citizens
There are no special requirements for lending to EU citizens. EU citizens have the same rights and obligations in Germany as German citizens. If the current place of residence in Germany cannot be proven by an identification document, the submission of the registration certificate is required. The presentation of the registration certificate does not constitute a disadvantage for German citizens.
German citizens must also present the registration certificate if they do not have an ID card, but only a passport, for example. In Germany, establishing your identity and address is a mandatory prerequisite for lending. Among other things, it serves to prevent money laundering.
Lending to foreigners from non-EU countries
The willingness of banks to lend does not depend on whether their foreign customer comes from EU countries or from non-EU countries. However, there are some special proof requirements. From the bank’s perspective, additional documents are required to assess the credit risk. Most banks will ask for both residence and work permits.
The term of the loans will be limited by the period of validity of both documents. A loan for foreigners with a temporary residence permit is therefore possible if the term of the loan expires within the period of validity of the residence permit.
However, exceptions are often made, provided that the extension of the residence permit / work permit will not be a problem under current legislation. In both cases, it is a prerequisite that a regular income can be expected during the credit period.
Loan to foreign students
A student loan is used to finance expenses incurred during and during your studies.
Student loans are a promotional measure by Across Lender (funding set 174). You cannot apply directly to Across Lender, but only through a sales partner such as the Deutsche Studentenwerk or a regional or national bank.
Unfortunately, this funding measure is not available to all foreign students. The following are funded:
- EU citizens who have been residing legally and legally in Germany for at least three years and who are registered in Germany.
- Family members of such an EU citizen who are in Germany with him and who are registered (citizenship and length of stay in Germany are irrelevant in this case).
- Educational residents who are registered in Germany. A resident of education is a person who, as a non-German citizen, has obtained his or her German university entrance qualification through a school leaving certificate in Germany or at a German school abroad.
Across Lender provides an application form on its website that can be printed out.
Credit without Credit Bureau for foreigners
Loans without Credit Bureau are issued by the Lite Bank and can be applied for there directly or through a German credit intermediary. These are strictly standardized small loans with loan amounts of over 7,500 USD, 5,000 USD and 3,500 USD.
The loans are repaid in 40 monthly installments. Interest rates are just over 11%. Maturities can be up to 42 months because installment payments only start up to two months after the Credit Bureau-free loan has been concluded.
We have found no indication that foreign citizens living in Germany cannot apply for Credit Bureau-free loans. However, in addition to strict income requirements for foreigners from non-EU countries, the additional award conditions will apply.
This means: residence permit and work permit must still be valid for at least 42 months. If you are considering taking out a loan without Credit Bureau, advice from a credit broker is useful.