Nowadays, most major purchases are financed by a loan. How much credit the individual gets depends on various criteria. First and foremost, it’s about what the loan should be used for. We a normal consumer loan apply different criteria than for the car purchase or possibly real estate financing.
Banks or savings banks must ensure that the borrower is able to repay loan installments and interest over the entire term. The higher the credit, the higher the security requirement.
Which factors influence the loan amount and who gets a loan?
The banks always check in individual cases how much a borrower is able to raise for the installments. The income must be in a healthy relationship to the expenditure and the capital still available. Before applying for a loan, everyone can use a household account to determine in advance how much capital will remain from their salary after deducting all expenses. There must still be enough scope here for the desired credit rate.
Those who have an income below the statutory garnishment limit have little chance of getting a loan at all. The amount of income is in any case decisive for the decision on the amount of the loan to be granted. Those who have items that can be attached in an emergency improve the chances and the amount of their credit line. This is the case for real estate loans right from the start, because here the bank has the real estate as security. The same applies to car loans.
The preferred group of banks when it comes to lending is workers, white-collar workers and civil servants. Since these generally have a secure income, there is a low risk of payment. The situation is somewhat different for those who can not prove a permanent employment relationship.
These are self-employed, housewives, freelancers, trainees, students, unemployed or Good Lender recipients. This group finds it particularly difficult to prove creditworthiness at banks. In general, only other collateral helps, such as assets, real estate or a surety.
Examples of the different types of loans
For a consumer credit that is freely available, the banks require a regular income and a credit check from Credit bureau, where they have no other security. However, a second borrower significantly increases the chances of getting a loan. This also has a major impact on the amount of the loan.
The car loan is a dedicated loan and therefore provides greater security for the banks. That is why people also get a car loan who might not get a consumer loan. Here the bank still has the vehicle as security. The car only becomes the property of the buyer when the loan has been repaid in full. This is how long the bank keeps the vehicle registration.
The situation is similar with real estate loans. Here, too, the bank has the property as collateral, but this is about slightly higher amounts and therefore similar standards are used as for consumer credit. Here, too, the question arises: “How much credit do I get with my salary?” The question cannot be answered in general.
This can only happen after the documents have been checked. This includes proof of income, Credit bureau information and the financing requirements for the property. The willingness to take out a mortgage or mortgage also helps to increase the loan amount. But be careful not to overestimate it, because real estate loans generally have a long term and there must be enough left to live on.