Getting a Personal Loan as a Foreign Resident in Germany: Requirements, Process, and Key Tips
Many foreign residents in Germany need personal loans (Ratenkredit) for various reasons – such as buying a car, furnishing an apartment, or covering unexpected expenses. However, obtaining a loan as a foreigner can be more challenging and may involve additional conditions compared to German citizens. In this comprehensive guide, we outline the key requirements, the application process, and practical tips to help you secure the best financing offer for your needs.
Covering unexpected living expenses
Foreign residents may face extra costs, such as car repairs, medical expenses, or moving to a new home.
Financial stability
A personal loan can help consolidate debts (Umschuldung) or reduce high interest charges from credit cards.
Purchasing important goods or services
For example, buying a car or an e-bike, or investing in training courses to develop professional skills.
SEO tip:
When searching and comparing loan offers, it is helpful to clearly define the purpose of your loan. Some institutions provide special conditions for particular loan types, such as car loans (Autokredit).
Valid legal residence
You must hold a valid residence permit (Aufenthaltstitel), whether for work, study, or family reunion.
Some banks are reluctant to lend to borrowers with short-term residence permits and tend to prefer long-term or permanent residence permits (Niederlassungserlaubnis).
Stable, verifiable income
Most banks require a stable job, ideally full-time (or regular part-time), supported by a formal employment contract.
You will typically need to submit your last 3–6 payslips (Gehaltsabrechnungen) and recent bank statements to prove regular income.
Credit history (Schufa) or alternatives
German banks usually assess your creditworthiness through Schufa, the main credit bureau.
If you are new to Germany, you may have little or no credit history, or your score may still be low.
In the absence of a good credit record, banks may charge higher interest rates or ask for a guarantor (Bürge).
Minimum age and income
You must be at least 18 years old.
Some institutions require a minimum net monthly income, often between 1,200 and 1,500 euros (exact figures vary by bank).
Sufficient employment history in Germany
Certain banks require that you have been employed in your current job for a minimum period (e.g. 6 months) to demonstrate job stability.
Temporary residence permit (Befristete Aufenthaltserlaubnis)
If your residence is limited (e.g. one or two years), the bank may restrict the loan amount or loan term so that it does not extend beyond the expiry date of your permit.
Some banks only grant loans to holders of short-term permits if additional security is provided or if there is a German guarantor.
Permanent residence (Niederlassungserlaubnis)
A permanent residence permit generally makes it easier to obtain a loan with better and more flexible conditions, as it signals lower risk for the bank.
International students (Studenten)
For foreign students, obtaining a standard personal loan is often difficult due to the lack of stable full-time income.
However, there may be special student or education loan programmes, or the bank may require a guarantor – for example, a person living in Germany with a regular income.
Define the loan amount and purpose
Clearly identify why you need the loan and how much you really require, in order to avoid unnecessary debt.
Compare bank offers
Use loan comparison websites (Kreditvergleich) to search for suitable offers.
Pay close attention to the effective annual interest rate (effektiver Jahreszins) and any additional fees.
Prepare all required documents
Identity document (ID card or passport) and valid residence permit.
Employment contract or proof of self-employed/freelance income.
Payslips for the last few months and recent bank statements.
Information about your place of residence and regular monthly expenses (such as rent).
Submit the application
Many banks allow you to apply online or in person at a branch.
Often, you first submit an online application and then complete an identity check using PostIdent or VideoIdent.
Credit check (Schufa-Auskunft)
The bank will review your credit file to assess how reliably you have met payment obligations in the past.
If your file is thin or your score is low, the bank may demand extra security or offer a loan at a higher interest rate.
Signing the contract and receiving the funds
If your application is approved, both you and the bank sign the credit agreement (Kreditvertrag).
Read the conditions carefully, especially any clauses relating to early repayment (Vorfälligkeitsentschädigung).
The loan amount is usually transferred to your bank account within a few days.
Creditworthiness (Bonität)
Your interest rate is mainly based on how confident the bank is in your ability to repay the loan.
The higher your Schufa score, the lower your interest rate is likely to be.
Loan term (Laufzeit)
Longer terms reduce your monthly instalments, but increase the total cost of the loan due to extended interest payments.
Loan amount
Very small or very large loans may be priced differently than standard loan sizes, depending on the bank’s policy.
Insufficient credit history
Many foreigners arrive in Germany without any credit record, which makes banks more cautious.
You can build your credit history by using a current account regularly and paying all your bills on time.
Limited loan options
Some banks have internal policies that favour German citizens or permanent residents.
As a result, you may have fewer offers to choose from.
Risk of leaving Germany
Banks are aware of the risk that borrowers may leave the country without fully repaying their loans.
This perceived risk is higher when your residence permit or employment contract is short-term.
Build your credit profile
Open a bank account with a reputable institution and use it for your salary and regular payments.
Avoid late payments on rent, utilities, and subscriptions.
Ask about special programmes
Some banks offer special loan products for foreign professionals, employees of large companies, or newcomers (“Welcome programmes”).
If you are a student, look into government-backed education loans (Bildungskredit) or scholarships.
Consider a guarantor
If your income or credit history is not strong enough, a reliable German guarantor (Bürge) with stable earnings can significantly improve your chances of approval.
Review the contract carefully
Check for terms on early repayment, administrative fees (Bearbeitungsgebühren), and any loan insurance that might increase costs.
Beware of “too good to be true” offers
Very attractive offers with “ultra-low” interest rates may hide high fees or come from unregulated lenders.
Always verify the lender’s reputation and regulatory status before signing.
Reminder letters (Mahnung)
The bank will send payment reminders, often with additional reminder fees.
If you continue to miss payments, the debt may be handed over to a collection agency (Inkasso).
Negative impact on your Schufa
Late or missed payments will be reported to Schufa.
This can make it harder to obtain future loans, sign mobile phone contracts, or obtain certain insurance policies.
Sparkasse and Volksbank
Local, traditional banks with branches across regions.
They may show more flexibility and goodwill towards long-standing customers in their area.
Deutsche Bank and Commerzbank
Large nationwide banks with extensive online services.
Generally require a solid credit history and good Schufa score.
Online banks (e.g. ING, DKB, N26)
Fully digital offerings with quick online loan applications.
Typically require a stable income and a satisfactory credit rating.
Specialised finance providers
Companies such as CreditPlus or Auxmoney may offer loans under more flexible criteria, including to foreign residents.
However, interest rates can be higher than those offered by traditional banks.
Obtaining a personal loan as a foreign resident in Germany is not impossible, but it does require you to meet certain conditions: a valid residence permit, stable income, and a good credit record.
It is strongly recommended to carefully research and compare offers from different banks, paying attention to interest rates, fees, and early repayment conditions before committing.
A clean Schufa record and regular income are the two most important factors for securing favourable loan terms. If you make your payments on time and provide sufficient security, a personal loan can be a valuable tool to achieve your financial goals or to manage unexpected expenses in your everyday life in Germany.
Note:
Policies and regulations differ from bank to bank and from one federal state to another. You should always consult a qualified financial advisor or contact banks directly to obtain up-to-date information about requirements for foreign residents in Germany.
The team of writers and editors on this website strives to provide accurate information based on extensive research and multiple sources. However, errors may still occur or some information may remain uncertain. Therefore, please treat the information provided in these articles as an initial reference and always consult the competent authorities for confirmed, up-to-date guidance.
