Personal loans in Germany: instalment, term and total cost at a glance
Go through instalment loans step by step, using identical key figures to make repayment, term, effective rate and total amount comparable.
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An instalment loan is repaid in fixed instalments. What matters is whether the repayment fits your budget for the long term and whether the total amount is reasonable compared with the alternatives.
In short: A personal instalment loan (Ratenkredit) is repaid in fixed monthly instalments over an agreed term. The longer the term, the lower the instalment – but the higher the total interest cost. So always compare offers with the same amount and term using the APR and the total amount payable.
Don’t stop at the monthly figure
A longer term usually reduces the repayment but often increases the interest cost. Work through at least two terms with the same amount.
Worked example: how the term changes the cost
A loan of €10,000 at 6 % APR:
| Term | Instalment | Total (of which interest) |
|---|---|---|
| 36 months | €303.50 | €10,926 (€926) |
| 60 months | €192.59 | €11,555 (€1,555) |
| 84 months | €145.32 | €12,207 (€2,207) |
The longest term cuts the instalment by more than half but costs more than twice as much interest. Choose the shortest term whose instalment safely fits your budget. Work out your own figures with the loan cost calculator.
Before you apply
Check your income, fixed spending, existing repayments and reserve. Additional insurance only belongs in the comparison if its benefit and cost can be assessed separately.
- Effective rate, not just the borrowing rate
- Total amount and number of instalments
- Special repayments and early settlement
- No unnecessary add-on products
How a personal loan works
- Clarify your budget: Decide on the amount, term and a safe monthly instalment.
- Request conditions: Use condition enquiries (Konditionsanfragen) – they are neutral for your Schufa credit score.
- Submit documents: Usually your ID, payslips for the last few months and bank statements.
- Credit check: The bank checks income, outgoings and Schufa entries and then gives you your personal rate.
- Contract and withdrawal: After signing, you have a 14-day right of withdrawal.
- Payout: After identity verification and signing, the money is usually transferred within a few working days.
Creditworthiness and rate: why your offer differs from the advert
Many banks use credit-dependent rates: people with a high, secure income and a good Schufa score get a lower rate than in the advertised example, others a higher one. With credit-independent offers, the stated rate applies to everyone who gets the loan. Our guide to creditworthiness explains how to assess and improve yours; our guide to a rejected loan shows what helps after a refusal.
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Read moreFrequently asked questions
What is an instalment loan?
An instalment loan (Ratenkredit) is a consumer loan with a fixed term that you repay in equal monthly instalments made up of interest and capital. The borrowing rate is usually fixed for the whole term, so the repayment and the total amount are known from the start. At the end of the agreed term the loan is fully repaid.
What should I pay particular attention to in a loan offer?
Always read the effective annual rate and the total amount together, along with the size and number of instalments. Also check whether special repayments and early settlement are possible and what they cost. Add-on products such as payment protection insurance should be shown separately and assessed individually.
Can I repay an instalment loan early?
Consumer loans can generally be repaid early, in full or in part, at any time. Under certain conditions the lender may charge early repayment compensation (Vorfälligkeitsentschädigung), the amount of which is capped by law. The amount that applies in your case is stated in the loan agreement and in your lender's settlement statement.
Which documents do I need for a personal loan?
Usually a valid ID, payslips or proof of income for the last few months and bank statements. Self-employed people usually submit tax assessments and a business evaluation (BWA). The bank uses these to check your creditworthiness.
How quickly is a personal loan paid out?
Often within a few working days of signing and identity verification, and sometimes faster for fully digital applications. Missing documents or questions from the bank can delay the payout.
What is the difference between a credit-dependent and a credit-independent rate?
With a credit-dependent rate, your personal interest rate depends on your income and Schufa score – it can be above or below the advertised rate. With a credit-independent rate, everyone who gets the loan pays the same rate.
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