Express loan – quick bridging of financial bottlenecks

Sometimes things have to happen quickly: If there is an unexpected financing gap in the private household budget, swift action is required. Those who finance urgently needed renovation work or the purchase of a new household appliance by drawing on their expensive overdraft facility are not infrequently faced with escalating costs. In this case, an express loan is a remedy, with immediate processing and the money is available after a few days on the current account.

Features and characteristics of an express loan

The express loan is essentially a consumer loan and does not differ from a traditional installment loan in terms of repayment terms. Significant differences exist, however, in terms of processing time and disbursement of the loan amount. For consumers who need to dispose of a certain amount of money quickly, the unbureaucratic procedure for processing the application has the highest priority. With the express loan, the decision on the loan approval is made within hours or minutes. After the loan agreement has been signed, it only takes a few days for the money to be disbursed. The repayment of the loan is made in fixed monthly installments at a predefined interest rate.

These are your advantages with an express loan

With an express loan, you benefit from numerous other advantages in addition to the lightning-fast processing of your loan request. Specifically, the following features are in favor of this loan:

• immediate credit decision
• Payment of the desired amount within a few days
• Planning security through fixed monthly payments
• interest rate based on creditworthiness
• Loan from 500 euros
• flexible arrangement of the terms
• no earmarking in the use of the money

An express loan can be requested without obligation and free of charge from a direct bank. There are no consulting fees and after approval of the loan application, the required documents are sent by return of post by e-mail.

Long processing times at the house bank

In contrast to your house bank, direct banks on the Internet offer you decisive advantages. For this form of the borrowing speaks primarily the uncomplicated treatment and completion of the credit business. While with the house bank first an appointment must be arranged with the responsible case worker, who asks probing questions about the intended purpose of the money and the reason for the credit request, with a direct bank only an on-line inquiry form must be filled out completely and submitted. At the local bank, the processing time can take weeks, while the loan seeker can't estimate whether the financial institution will approve the application. In the worst case, the house bank rejects the request and the customer must start looking for alternatives. Automated processes in loan processing at a direct bank ensure that the decision is usually available and communicated to the applicant within a few hours. In addition, you benefit from more favorable conditions, as online banks have lean administrative structures and pass on the resulting savings to customers in the form of lower interest rates.

Who can take advantage of the express loan?

In principle, any consumer who can prove a regular income can apply for an express loan. This loan is particularly suitable for people who unexpectedly find themselves in a financial emergency and need money quickly to cover their financial needs. Salaried employees, workers and civil servants with regular monthly salaries can take advantage of the express loan with immediate disbursement as well as self-employed persons who can prove a regular income. Consumers without their own income have the possibility to benefit from this fast loan by naming a guarantor.

Express loan – application in just a few steps

The express loan is applied for easily and quickly at a direct bank thanks to self-explanatory online forms. In the overview mask, the monthly income and the monthly fixed costs such as rent, maintenance payments and energy costs are to be recorded. In addition, information on existing liabilities and current credit agreements must be provided. The credit institution needs this information to assess the liquidity of the applicant. After the personal data have been added to the entries, the application is sent with a mouse click. If the application is approved, you will receive a loan offer with a fixed interest rate by mail. You then have the option of accepting or rejecting the offer.

Express loan – payment after 2-5 days

Of course, the questions in the online request form must be answered truthfully. For verification purposes, you will be asked by the financial institution to submit the documents together with the signed loan application and proof of identification. As soon as the documents have been received and checked by the bank, the transfer of the agreed credit amount will be initiated. Within a period of 2-5 days, the money will be credited to your account and you can freely dispose of the entire amount.

Documents for the express loan

The approval of an express loan is basically based on the information entered by the applicant in the online form. Evidence must be provided to verify the accuracy of all the information provided. Together with the signed loan application, the following documents must be submitted for this reason:

• Copy of personal documents
• Evidence of existing debts with an indication of the monthly burden
• Wage or salary slips for the last three months
• Balance sheet and tax assessment notices for the last three financial years in the case of self-employed persons
• bank statements for the last few months, clearly showing income and expenses
• completely filled in and signed self-disclosure form

The personal identification procedure usually takes place in a post office and is called the Postident procedure. You present your identity card or passport to the employee at the counter, whereupon a form is filled out. This document identifies you as the loan applicant and is generally sent directly from the post office to the bank. In the future, this procedure will be simplified and identification will also be possible through online channels.

No earmarking with the express loan

Unlike a building loan or mortgage loan, an express loan is, with one exception, not tied to a specific intended use. The loan can be used to pay off an expensive overdraft facility, to fulfill consumer desires, to settle outstanding bills or to pay for a vacation. The bank is only interested in punctual installment payments. One exception is an express loan needed to finance a new motor vehicle. This loan is a secured loan with more favorable conditions that may be used exclusively for the purchase of a car. For this reason, there should be clarity on how the money will be used even before the application is submitted. Then a comprehensive loan comparison should be made to filter out the most favorable offer.

Express loan with interest rate based on creditworthiness

Express loans are approved in most cases with an interest rate based on creditworthiness. In practice, credit seekers must provide a detailed self-disclosure, with an obligation to provide truthful information. This information is used by the financial institution as a basis for determining creditworthiness. In addition, a credit report is obtained from Schufa, which serves as a basis for assessing creditworthiness. The bank uses all the data to determine a score value for the applicant, which forms the basis for calculating the interest rate. In this way, people with very good credit ratings enjoy a loan with favorable interest rates, while consumers with poor credit ratings receive the express loan at less favorable conditions. Every German citizen can get an idea of his or her own creditworthiness once a year by making an inquiry at Schufa and have the stored data sent to him or her free of charge.

Express loan – Thorough planning before applying

Anyone who wants to take out an express loan should thoroughly examine their own financial situation in advance in order to avoid the debt trap in the future. This includes an analysis of the income situation and a comparison with the monthly fixed costs. The decision on the amount of the loan depends largely on whether punctual repayment of the loan in full can be guaranteed over a longer period of time. Future risk factors such as the non-renewal of a fixed-term employment contract, renovation or repair work required in the near future, or education financing for the next generation must also be taken into account. Basically, the following factors should be taken into account when evaluating your financial situation:

• existing savings or cash assets
• Payment obligations under existing loan agreements
• current monthly income
• monthly fixed costs for house or apartment
• Maintenance obligations

In addition, annual fixed costs for the own car must be broken down to the month and contributions for membership in gyms or non-profit clubs must be considered. The amount available per month after deducting all fixed costs serves as a basis for estimating financial capacity. A maximum of half of this amount of money may be used to make monthly installment payments to avoid financial difficulties in the event of unforeseen expenses.

Requirements for borrowing

When applying for an express loan, certain requirements must be met, which are mandatory to comply with. The applicant must be 18. Have reached the age of 14 to be allowed to sign a loan agreement without the consent of a parent or guardian. Below this age limit, young people are considered to have limited legal capacity and the bank will reject the loan application. In addition, credit seekers must have a permanent residence in Germany and have their own account at a bank or savings bank.

Express loan – questions and answers

Express loans from different financial institutions differ from each other in some points, sometimes significantly. Important evaluation criteria are the interest rate, the length of the term and the amount of the monthly installment. Cost factors are possible additional insurances and agent commissions. If an early redemption of the loan is being considered, you should also inquire about a possible prepayment penalty. This is charged by some banks because of the loss of interest due to the early redemption of the loan.

Generally, banks view additional collateral such as an endowment policy with a high cash surrender value or real estate positively when granting a loan and reward the offer with more favorable interest rates. In the case of a conventional instant loan, proof of income of the applicant is sufficient. Workers and employees who are in employment subject to social security contributions submit pay slips for the last three months. Self-employed persons prove a regular income by submitting tax assessment notices or company balance sheets for the last three years.

With an express loan, the interest rate is usually fixed for the duration of the entire term and the monthly rate does not change. Every month a part of the loan is amortized and at the end of the term the borrower is debt free. A variable interest rate is the exception to the rule when it comes to express credit. Such an arrangement can only be agreed if both parties to the contract agree.

The total cost of an express loan refers to all costs, fees and commissions incurred during the term of the loan. Since the interest makes up the largest part of the total cost, the term should be chosen as short as possible. Each additional month costs cash money and drives up the total costs. Some banks require the purchase of residual debt or term life insurance in order to grant an urgent loan. The cost of insurance also contributes to an increase in total costs.

In addition to personal data such as name and surname, address, date of birth and marital status, the financial institution requires information on financial situation. This includes accurate and truthful information about income, monthly housing costs, maintenance obligations and existing credit agreements. The accuracy of the information is proven by submitting the appropriate supporting documents.