Loan application: What documents do I need for a loan?

Loan application: What documents do I need for a loan?

Felix Stadler November 23, 2019

First of all, it should be noted that you should of course and absolutely only provide truthful information – also with your submitted documents. It is in your own interest to avoid cheating or concealing credit-preventing circumstances. If the bank comes across you in retrospect, it is relatively certain that the loan will be canceled and the loan amount will be due for repayment immediately.

Checklists for the required loan documents

Checklists for the required loan documents

Basically, the required documents vary depending on personal requirements and also from bank to bank and must be coordinated with them in individual cases. Several banks have even created checklists for the required loan documents – ask your advisor about them. The bank needs the documents during the processing of the loan application in order to identify the applicant and to legitimize them regarding their collateral. According to Section 18 of the German Banking Act (loan documents) and current circulars from the banking supervisory authority, the bank is obliged to get a clear, up-to-date and reliable picture of the economic situation of the borrower.

If all the requirements for a loan are met, the following formalities apply:

  1. A valid, not expired identity card
  2. With online loans in particular, a registration confirmation will also be required to prove that you live and can be reached at the address. The registration authority issues such a certificate. Some providers also recognize bills addressed to the address, such as telephone or electricity bills. Some providers, on the other hand, require a legitimation check using PostIdent.
  3. Disclosure of income and, if applicable, financial circumstances:

    Income & expenses:

    • for employees or workers:
      • Payroll / payroll for the past two to three months.
      • If you have regular additional income (e.g. rental income, accident pension, maintenance), you should also submit this evidence in order to improve creditworthiness.
      • Often the current employment contract is also requested, which shows that it is a permanent employment relationship and the trial period is over. If the employment contract is temporary, the term should not be before the end of the term of the installments.
      • Current account statements are less common, but not uncommon, and of course they must not contain blackouts or gaps. The bank does this especially if you do not have a salary account with it and want to clear up doubts based on the rest of the information – especially regarding the regular expenses. The period of the account statements depends primarily on the amount of the loan. With 10,000 USD, a month is usually enough – from 25,000 USD, statements for the last three months are often required.
      • With low incomes, some banks require a signed self-disclosure to prepare a household account and better assess their ability to repay the loan.
    • for self-employed and freelancers
      If you have your own business, you can generally not offer any contractual security for your full and regular monthly income. Therefore, the entrepreneur has to prove by business documents that his business is going and that he will be able to repay the loan properly. He can do this, for example, using the following documents (usually created by the tax advisor):
      • Business evaluation (BWA) not older than three months including sum and balance list during the year (SuSa)
      • Tax return and tax notice (commercial + private)
      • Income / surplus calculation (USD) or profit and loss account (income statement)
      • In addition to these documents, bank statements can also be requested here, which prove the orderly liquidity of recent times

      The bank usually demands higher interest rates for the increased risk. In the case of subject-related loans (real estate, vehicles), the loan commitment will also benefit from a higher equity ratio.

    • among pensioners
      Pensioners, like employees, also have a regular income, but this is usually lower and, depending on their age, less secure due to the increased risk of death.
      • The latest pension notification as well as proof are sufficient here
      • the last tax assessment

I want to replace current contracts. What do I have to consider?

I want to replace current contracts. What do I have to consider?

If a new loan is to be used to pay off other current loans, you should bring your financial advisor the relevant contracts with you when talking to you.

Building loan: Which documents are required for real estate financing?
Anyone who applies for a real estate loan (whether building a house or buying real estate) must of course invest more effort in compiling the documents due to the large amount. These are usually in addition to the above:

  • Proof of existing own funds (bank statements, savings books, deposit accounts, gift certificates,..)
  • existing insurance contracts
  • are other financing partners involved (e.g. building society), including their financing commitments
  • Detailed information on the construction project along with the property or the purchase or renovation property:
    • Extract from the land register, site plan and floor plan
    • Area calculation
    • photos
    • in the case of new buildings or renovations: building description, total cost statement
    • in the case of condominiums: declaration of division showing what belongs to the owner’s special property and what belongs to joint ownership
    • in the case of land with leasehold, the associated contract must be attached to the documents

Please note the following for student loans :
Students who want to have their studies financed through Best Bank must submit the following documents in addition to their ID through a Best Bank partner (e.g. accredited bank or student union):

  • Contract offer A, B and C
  • valid certificate of study with subject, subject semester and desired degree
  • if applicable, the completed form for non-German applicants
  • Proof of a bank account
  • in the case of advanced studies, this also includes the completed “proof of performance” form
  • For all additional, supplementary or postgraduate studies or a doctorate, the completed form “Proof of academic qualification”

Do documents have to be submitted again for a loan increase?
If the net loan amount is subsequently increased, the bank is obliged in accordance with Section 18 KWG and is also obliged in its own interest to update the information. This means that the documents submitted with the loan application must be updated. If there is a significant subsequent increase in the loan amount, even the creditworthiness must be completely re-evaluated.

What documents are required at Bank XY?
Basically, the above points apply in most cases. Individual regulations of the banks differ only slightly – for example in the number of pay slips or the period of the account statements.

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