Loans provided by private individuals

A loan is usually associated with a bank, but there are alternatives. People of all ages, including pensioners, can apply for a loan without a bank, whether they are employees, civil servants, freelancers or self-employed. These private loans are generally financed by private individuals who are willing to grant a loan without a bank.

Loans without a bank via online platforms

Various online platforms offer the possibility of taking out a loan from private individuals, ensuring financial flexibility even without a SCHUFA entry or with a negative SCHUFA entry, which is a clear advantage. For the private individuals willing to invest their money on these platforms in a loan without a bank, the return is naturally decisive. Basically, no special prerequisites are required for this type of borrowing.

Application for loans without a bank

Anyone who needs financing and requires a certain loan amount can submit a non-binding application for a loan without a bank. Even people with negative SCHUFA entries and poor creditworthiness or existing loans with a bank can apply for this loan. Certain documents are also required for an online loan without a bank; these must be sent to the loan broker after the loan offer has been issued.

If the borrower is employed or in service, this usually includes a copy of the employment contract and copies of the most recent payslips. For online lending, even for a loan without a bank, documents are in many cases transmitted using the so-called Post-Ident procedure. In this process the borrower contacts a post office branch and the staff there confirm the borrower's identity to the lender by inspecting the identity card.

Loan inquiry: Purpose and terms for loans without a bank

The inquiry regarding a loan without a bank is completely free and non-binding. The borrower simply fills out the providers' questionnaires and submits them online.

It usually does not take long for the borrower to receive a free offer for the required loan amount, even for a loan without a bank. Up to that point no loan agreement has been concluded and the borrower can read and review the documents at home in peace.

Such a loan inquiry for a loan without a bank does not negatively affect the so-called SCHUFA score values. Only when the borrower agrees to the loan without a bank and returns the signed loan application together with the supplementary documents and the lender finally reviews and accepts it, does the contract for the loan without a bank come into effect.

Loans without a bank granted by private individuals and via corresponding brokerage platforms are not tied to a specific purpose. It does not matter whether the loan is used to purchase a new vehicle, the next vacation, a major renovation or refurbishment of the house, or simply for debt restructuring.

Repayment for a loan without a bank

Even for a loan without a bank, additional services such as special prepayments or annually skipping one or two installments can be agreed. In many cases these services are already part of the contract to offer the borrower more flexibility.

If something unexpected happens, a payment holiday can usually be arranged quickly to relieve the financial situation.

Conversely, if more money is available than expected, one-off special prepayments can generally be made once a year to repay the loan without a bank more quickly. For smaller amounts and with various providers, an instant approval for a loan without a bank is possible.

Different lenders, also called investors, offer terms that range between 12 months and even up to 120 months. This gives the customer, even with a loan without a bank, the greatest possible flexibility regarding the term. A loan calculator can be used to get an optimal overview of which term is sensible for which installments.

Alternatives for obtaining a loan without a bank

Of course, there is also the possibility of receiving a loan without a bank from friends or relatives. Such a loan does not have to be merely a favor, but in most cases it is significantly cheaper than a classic bank loan.

The lender for the loan without a bank—in this case a good friend, acquaintance or relative—is able to provide the required sum of money and lend it to the borrower under certain conditions. Especially with friends or relatives, the chance of getting an instant loan is greater. The instant loan guarantees a quick payout of the loan amount. The disbursement can be made in cash or by bank transfer.

This loan agreement should also be recorded in writing to protect both parties. Preferably with a witness. The written loan agreement should specify the loan amount, the term, the monthly installments and any interest.

In most cases no or only very low interest is charged for these loans without a bank, making them, compared to bank loans and other loans without a bank, the cheaper option.

Who can apply for a loan without a bank?

In principle, anyone can apply for a loan without a bank, whether an employee, civil servant, self-employed person, small business owner, freelancer, civil servant, trainee or pensioner. Even people without a regular income or with negative SCHUFA entries can apply for a loan without a bank.

The lending decision and the conditions attached depend on the different providers of such loans. As a rule, however, it is much easier to obtain a loan without a bank if no loan is granted by their house banks(/en/topics/loan-through-other-channels-than-the-bank).

Thus, people with lower creditworthiness also have the opportunity, for example, to finance the car needed for a new job and company founders have the option of acquiring the necessary operating resources to get their newly founded company up and running. Where banks may place more emphasis on collateral, this point is often not as decisive with a loan without a bank.

Anyone who wants to apply for a loan without a bank should, in any case, as with any other borrowing, find out exactly about the various options in advance. Compare different interest rates and conditions and, after careful consideration, submit the loan application to the provider they consider best.