Apply for a loan online – this is what you should look out for

Digitalization has simplified the search for credit. You can compare online, make the application online and even get the money within a few hours. Going to the local bank or other local lending institutions is no longer necessary at all. But how secure is the digital process for getting a loan really?

Whether to buy a house or to fulfill a great wish: The most diverse situations can lead to worrying about a loan. Photo: Imago/Francis Joseph Dean/Dean Pictures

What matters in credit comparisons

In order to choose a suitable and favorable loan in the variety of options, an independent loan comparison is a stable foundation. But it's not enough to compare debit interest rates and assume that the offer with the lowest interest rate is also the most favorable loan. Online comparisons create transparency within minutes, giving you an advantage.

If you compare correctly and consider all essential factors in comparison, you eliminate risks and conclude the right contract. The effective interest rate, the term and the monthly repayment should be compared. Since no one knows whether their own financial situation will change in the next few months, flexible repayment terms with free special payments and installment breaks are optimal. The more information can be found on the comparison start page, the easier it is to compare two to three relevant loans.

Request for credit or conditions?

Lenders advertise the lowest interest rate: the shop window rates. Which conditions one receives depends on one's own creditworthiness. How cheap or how expensive the favored credit is and whether an offer that looks more expensive at first sight is better, you can only find out through a personalized condition proposal. Inquiring with various lenders should always be done as a condition inquiry, not a loan inquiry. If one asks for a credit, a Schufa entry visible for all contracting parties takes place.

If, on the other hand, one inquires about the personal conditions, the creditworthiness remains intact and no risk is taken. The condition request must contain this term in the subject line. Otherwise, the bank will assume a binding credit request and the entry in the Schufa will be made. If you ask three or more banks, it gives the impression that you have received rejections, which in turn has a negative effect on your credit rating.

Credit without Schufa: A pitfall that can be expensive

There are many reasons for a small or larger loan. If you need to buy a new car or want to give yourself and your family a little time off from everyday life, a small cash injection can be helpful.

Quickly you come across instant loans without Schufa and the promise of the lenders that neither an entry nor a query is made. Nobody lends money without the security that the borrower is solvent. There are small loans without Schufa, but these are high interest rates and not infrequently bring additional contracts with them. Here, there is a risk that the loan will ultimately be rejected – but the bindingly concluded insurance with a two-year minimum term remains in place. Or the consumer:in is asked to pay the fees in advance, but the allegedly approved money does not arrive.

Conclusion: when it comes to applying for credit, you should choose the contracting party with the utmost care. If one has found the apparently best offer, a condition inquiry gives insight into the interest and basic conditions. With instant loans without Schufa and Co. it is not seldom a question of dubious or disproportionately high-interest loans.