A consumer credit is also referred to as consumer credit or personal loan. After the overdraft facility, it is the most frequently used form of credit in Germany. Under Simply explained: Personal Loan – Youtube an appropriate video can be viewed, in which the essential aspects of such a loan are explained.

Consumer credit: frequent uses

As the name suggests, a consumer loan is usually used to fulfil a short-term and quite expensive wish. Trauma vacations are often financed by such a loan. The same applies to the purchase of a car or a sofa set. In addition, many people choose such a loan to offset the expensive overdraft facility on their checking account. In times of low interest rates, personal loans are quite cheap, while the low interest rate has had no or only an insignificant effect on overdraft rates.
Consumer credit is an installment loan that cannot usually be paid in one fell swoop. The issuing bank ultimately earns a fairly long term, so that an immediate full repayment of the loan can normally only be made against a certain payment.
Anyone taking out a consumer loan should be aware that he or she is now indebted for a period of three to five years. Such a loan cannot therefore be taken out on an unlimited basis, so that the transaction should be considered carefully.

Consumer credit: How it is concluded

A consumer loan is a simple and unbureaucratic loan: it often serves to fulfil a spontaneous wish, such as a last-minute cruise. Most banks are prepared for this, so that the loan of usually up to EUR 5,000, – can be transferred on the same day or can also be handed over directly at the bank counter.
The granting of the loan is very simple: In addition to the identity card, the customer shall submit a valid employment contract and pay slips for the last six months. In the case of self-employed persons, it should be possible to document incoming payments for the last six months. If a regular receipt of payment can be established, the loan is instructed or paid out immediately. The amount is usually three months’ salary, which can often be rounded up a little. About EUR 5.000,- is the maximum that can be paid out on the terms of a consumer loan.
More and more people today are employed on fixed-term contracts, which basically stands in the way of granting loans: a consumer loan has a repayment period of several years, which can hardly be guaranteed by someone whose employment is limited to twelve months. Due to the low interest rates and the good employment situation in Germany, however, the banks here have become quite generous: It is assumed that someone with a fixed-term employment contract will subsequently find another job, so that the credit application is usually approved.
A consumer loan is normally linked to information from the Schufa: anyone who has a negative entry here is normally not eligible for a loan. However, the banks have reacted to this: Many banks today maintain online banks as subsidiaries with their headquarters abroad. The strict German rules do not apply here. The customer can therefore apply for the credit online and receive it online from the same bank that would have refused him or her the consumer credit at the counter. An online consumer loan is slightly more expensive than a consumer loan at the counter, but otherwise has the same conditions. This rather absurd construction shows that in times of online banking it is time to think about going it alone nationally in connection with Schufa and lending.