More than 200 domestic and foreign financial institutions are approved in Germany. Almost all of these banks also offer their customers installment loans in addition to other financial products. When it comes to installment loans for homeowners, many banks grant applicants particularly advantageous conditions because homeowners are among the preferred customers of financial institutions.
What are the conditions for an installment loan for homeowners?
First of all, the same criteria and provisions apply as for other installment loans. However, this property ownership plays an important role in a home loan installment loan. The bank is happy to accept the property as security. As a result, the creditworthiness of applicants who have their own property is rated higher than that of consumers who do not have such collateral. If the property can be accepted as security, the credit risk for the bank will decrease considerably.
If for any reason the borrower is suddenly unable to make the installment payments, the financial institution can, under certain conditions, sell the property accepted as collateral and use the proceeds of the sale to settle the remaining debt on the loan. If the sales proceeds are higher than the remaining loan amount, the remaining amount will be paid to the borrower.
What conditions must be met for the homeowner installment loan?
The property must be registered in the land register in the name of the applicant. The loan amount may not exceed the value of the property. If the property is encumbered by mortgages, the encumbrance must not be so high that the loan amount of the additional installment loan for homeowners cannot be covered if a sale becomes necessary. Official documents must be presented for the value of the property and any charges.
It’s worth comparing
There is fierce competition between providers in the market for financial products. Customers can benefit from this competition by comparing different offers. By choosing a cheaper provider, you can save a lot of money, especially with relatively large loan amounts. With the offers, particular attention should be paid to the possibility of repaying the loan earlier than agreed, as this can save a lot of money. Special payments should be possible at any time without extra costs.
It is also advisable to choose a loan term that is as short as possible, since in general the longer a loan is to be repaid, the higher the cost of a loan. All offers can be compared at a glance on the Internet. More and more financial institutions are increasingly offering their products exclusively on the Internet. You can often also apply for a loan online and receive a preliminary decision within a few minutes.