The German Banking Act stipulates that banks, when granting loans, need to obtain an overview of the economic situation of the borrowers. A credit check is inevitable. What documents are now needed exactly to be able to apply for a loan , in turn, is not fixed.
Nevertheless, there are some documents that have become the standard to the credit application. In doing so, further distinctions can be made with regard to the group of persons and the type of credit. Depending on this, other documents will be required. An employee must provide other evidence than a pensioner. For a car loan, you also need to submit other documentation than a simple consumer loan.
Basically, banks need to assess their financial position when lending. Therefore, in most cases bank statements are requested, regardless of the group of people and the type of loan. Also, a copy of a valid identification document, such as an identity card, is one of the overarching documents requested.
Differences according to groups of people
Depending on which group of persons a private borrower belongs to, it makes a difference which documents are requested when applying for a loan. In addition to the fully completed loan application, it depends on your employment, what evidence the banks want to see from you.
Employees & Employees
This group of people generally has the easiest option to apply for a loan, provided the financial circumstances are appropriate. Basically, you need the salary statements of the last 2-5 months. For smaller loans, it is sometimes sufficient to provide such evidence of account statements. Some banks also request a copy of the employment contract to be sure about your employment.
Pensioners & Pensioners
Pensioners and retirees already make a risk group for some banks. Therefore, there is often an age limit for loan applications. The most important documents for this group of persons are the last pension notices. This will provide proof of a regular income, similar to the salaries and employees.
Self-employed & freelancers
Since self-employed and freelancers have no regular income, such as an employee, there is a significantly higher default risk for banks in this group of people. Accordingly, significantly more documents must be submitted to support one’s own solvency. Because of this increased risk, self-employed and freelancers often get credit only at a higher interest rate.
Depending on the requirements of the bank, you must submit the following documents if you belong to this group of persons and would like to obtain a loan:
- Business Evaluation (BWA)
- Income surplus calculation (EÜR)
- Loss and profit account
- Income tax assessments
- VAT returns
Differences by type of loan
In addition to the different groups of people, it also depends on the type of loan, which documents must be submitted to the bank. For general loans, without any special purpose, the rule of thumb is first of all: the higher the loan, the more documents have to be submitted. If you apply for a mini loan or small loan with a very small amount, in some cases an analysis of your last bank statements is sufficient. By contrast, loans with significantly higher amounts require considerably more collateral.
Depending on the purpose of the loan, further documents are required by the banks:
- Car loan: registration certificate Part 2 as well as the purchase contract of the vehicle and the vehicle documents, in each case in copy.
- Real estate loan: Appropriate documents that you receive from the seller about the property, such as floor plan, land register entry, calculation of living space, building description and a list of costs related to ancillary costs, taxes, cost estimates, etc. Furthermore, existing reports can be submitted and in the case of a condominium a Declaration of division and of course the purchase contract.
- Debt rescheduling: Copy of the existing loan agreement, a power of attorney to replace the old loan and the current bank statement of the repayment account, so that the remaining debt can be determined.