What is a loan application?
A loan application is the application of a potential customer to a bank to grant him a loan. Specifically, this means: If you want to take out a loan, you have to submit a loan application to a bank. This then decides on the basis of certain criteria, such as your creditworthiness or any collateral, whether the contract is concluded. The bank does not approve the loan application until it has been checked positively.
Loan application: procedure and approval
The loan application is preceded by a non-binding offer that the bank makes to the borrower. If you are planning to take out an installment loan, for example, the bank will make you an offer for the desired loan amount. This always happens on the condition of your positive creditworthiness. If you agree with the offer, you can submit the loan application to the bank.
In order to check your application, the bank needs documents about you and your financial situation. This includes
- A copy of your identity card
- bank statements
- Your employment contract or proof of salary
- Any existing credit agreements
- For self-employed persons, the last income tax assessment and a surplus income statement
If you would like to submit a loan application for a property purchase, you will need to submit additional documents. In order to check your creditworthiness with the mortgage, the bank also needs the land map, floor plans and a land register extract. In the case of an existing property, photos of the property are also required.
In addition to the requested documents, the bank also obtains Schufa information. If your creditworthiness check is positive, the bank approves the loan application. You will now receive a binding loan contract. The loan certificate contains information on the type of loan, the loan amount and the interest rate as well as the term and any collateral. A repayment schedule is also included.
With large amounts, borrowers often have to provide additional collateral. For example, if you submit a loan application for a car, the vehicle is considered collateral for the car loan. In the case of construction financing, the property is taken into account as security.
What is in the loan application?
In order for the bank to process your loan application, you need information about the desired loan. The loan application must therefore contain the following points:
- The amount of the loan you want
- The desired term of the loan
- Possibly the rate and the initial repayment
- The documents already mentioned above
All information in the loan application must be correct. If errors or incorrect information are found, the bank can reject the loan application. If a loan contract has been concluded due to an incorrect application, this can lead to the termination of the loan contract and, in the worst case, to a fraud report.
How do I apply for a loan?
A loan application to a bank must be in writing. As a rule, this is created digitally – either directly at the bank or via an intermediary. Submit the loan application through, we take care of the processing and go through the points that are most important for you again. Our on-site consultants communicate with the bank on your behalf, compile all the necessary documents and then submit the loan application to the bank. How long it takes to process the application mainly depends on how quickly the bank receives all documents relating to the loan application. In most cases, the money is paid out between three and twelve working days after the loan application has been approved.