Would you lend your girlfriend 1,000

Personal loan

Borrow money from relatives, friends or private individuals

Josefine Lietzau
Expert for banking and credit as of March 12, 2020

Josefine Lietzau

Josefine Lietzau is an editor in the Bank & Investments team. During her studies in German and English, she worked for the editorial offices of the Green League, the Jüdische Zeitung and the Superillu. After completing her master's degree, Josefine Lietzau completed an internship at the online consumer portals Banktip and Posttip, where she then worked as an editor.

  • If you need a loan, you don't necessarily have to call in a bank. Private individuals such as family and friends can also be considered as donors.
  • The borrower can get the loan without a Schufa query. For the lender, however, this means that they have to assess for themselves whether they will really get the personal loan back.
  • So that there is no dispute later, lenders and recipients should draw up a written contract for the personal loan.
  • If you don't want to ask about a personal loan from family and friends, you can use special online platforms that arrange loans from private customers.
  • However, these offers are not necessarily cheaper than a normal installment loan from a bank.
  • In the case of smaller sums and short-term bottlenecks, ask relatives or acquaintances whether they can help you financially.
  • However, you should be sure that you can repay the money as agreed. Use our model contract.
  • If you prefer to keep personal contacts and your finances separate, you should check loan offers on comparison portals: We recommend Verivox for a good overview and Check24.

You don't always have to take out a loan from a bank, you can too from private individuals receive. But a personal loan has its own rules, regardless of whether you're borrowing money from friends or getting it from a group of anonymous lenders.

What are the benefits of a personal loan from friends or family?

Has a loan from a friend several advantages: You can make the contract easier and more informal than a bank does. Your family or friends will not obtain any information about you from the credit agency Schufa. Relatives and acquaintances are also often less likely to ask for interest than banks.

The situation is similar when it comes to lending: private individuals have to not to legal requirements hold for lending that apply to banks. For example, it is about what information the banks have to obtain about the borrower and how they have to check their creditworthiness (creditworthiness).

While a financial institution checks the borrower's creditworthiness by default, for example by showing salary slips and obtaining Schufa information, relatives or friends are about trust. The fact that you have to submit documents to them is rather the exception. In addition, a Personal loan not reported to the Schufa.

Collateral is also usually not required for loans in the private sector. In the case of bank loans, on the other hand, you often have to agree to an assignment of your income or hand in the vehicle registration document for car loans.

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What are the disadvantages of personal loans?

If you want to borrow money from people in your private sphere, you should consider a few points. For example, if there is a dispute between you and the lender, you do not have the option of contacting consumer protection organizations or a banking ombudsman.

You can have a loan agreement with a friend or relative though orally to lock. After all, there is no legal requirement for this type of loan. But we strongly recommend the written version.

So even with a personal loan, draw up a loan agreement that both sides sign. Finanztip offers you a sample contract for this. In this way you create clarity and have something in hand in the event of any disputes. You don't need a lawyer or notary for this.

Also put one Duration of the personal loan firmly. Without an agreed time, your lender can terminate the loan at any time with three months' notice. In this case, you would have to repay the entire sum in one fell swoop. If you do not want to depend solely on the goodwill of the lender, you should also write down the duration of the contract and put it with your records.

Remember: there are usually no bank loans personal relationships at stake between lender and borrower. Some friendships, on the other hand, have already broken due to money disputes.

Can personal loans also be concluded via loan portals?

If you want to borrow money privately, the money does not have to come from your circle of friends; You don't even need to know the private lender. There are companies that do Broker loans from private: Auxmoney and Giromatch.

In such cases, personal loans work like classic installment loans from a bank: You submit an application and, after checking your documents, you receive a loan, which you then have to repay with interest. However, the money does not come from a bank, but from private individuals who invest their money in these loans and through the interest Want to make money.

Giromatch has its own personal loan, but also passes the customers on to partners such as banks, brokers or Auxmoney if their own product does not suit the customer.

Auxmoney is a pure personal loan broker. This provider is also integrated into the Verivox, Check24, Finanzchek and Smava loan portals.

Until July 1, 2019, Smava brokered loans from private to private. Now, however, customers only receive offers from the Auxmoney platform via Smava. There should be no changes to the outstanding loans.

The providers of these personal loans cannot do without a bank, after all, the granting of loans is legally regulated in Germany. For example, companies need an official permit. The providers of personal loans therefore work in the background with banks.

Overview of personal loan providers

providersAuxmoneyGiromatch
Loan amount€ 1,000 to € 50,000up to € 25,000
Terms12 to 84 months12 to 60
Months
Partner bankSWKFidor


Sources: Auxmoney, Giromatch (as of November 2018)

What does a personal loan cost?

In the case of private loans between private individuals, they agree on the interest rate among themselves. When interest rates are low, lenders with friends and family are often likely to forego interest altogether. When lending via a portal, on the other hand, the interest rate depends on yours Creditworthiness from. The range is quite large. However, these are not the only costs; that personal loan providers require Brokerage commission.

In addition, monthly account management fees may also apply. Therefore, the interest rates as given by the providers are only partially meaningful. They do not correspond to the actual costs.

Overview of personal loan costs

providersAuxmoneyGiromatch
Effective interest

3.2% to

19,95 %

2.9% to 6.9%
Agency commission2.95% of the loan amount

12 months term:
0.1% to 0.5% one-time of the net loan amount /
24 months: 0.25% to 1.25% one-time /

36 months: 0.4%
up to 1.75% /
48 months: 0.55% to 2% one-time /
60 months: 0.7% to 2.25% one-time¹

further fees€ 2.50 per month as a service feeno fees for your own personal loan / fees possible if the customer is referred

¹ depending on creditworthiness and term
Sources: Auxmoney, Giromatch (as of November 2018)

Overall, the following applies: You should keep an eye on all financing costs - in the case of personal loans, also the additional fees that are incurred in addition to the interest. Who himself at the rate takes over, lands quickly in the overdraft facility. And then the loan becomes even more expensive. To see how much loan installment you can afford, simply use the Finanztip loan calculator.

With personal loans it is also possible to make special repayments or to redeem the loan early. In the latter case, the partner bank has the right to demand a so-called early repayment penalty. However, that is 0.5 percent or 1 percent of the still loan amount not repaid is capped.

How do you get a cheap loan?

There are different ways to get a cheap loan. Especially with smaller sums it can be worthwhile at Family and friends ask. Remember that without a contract you are legally on insecure feet. And even with a contract, your personal relationship is at stake.

When it comes to a loan from you regulated environment you should first check out the offers about a Loan portal to compare. Combine Verivox for a good overview with a second portal in order to possibly lower interest rates: Check24.

If the portals only find a few offers for you and the interest rates are relatively high, you can try again at Auxmoney by registering directly with the provider. Then additional data is used; the interest may differ slightly from the offer on the portal. Another option is to send an inquiry to the Giromatch provider.

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More on this in the credit guide

  • With loans, you can reduce the costs by comparing interest rates on portals.
  • Our provider recommendation: Verivox, Check24

To the advisor

This is how the personal loan application works

Applying for a personal loan via an online portal is similar to other loans. You enter your data either on a loan comparison portal or directly with the provider. The data includes details of address, salary, employment and insurance. This data is used to determine your creditworthiness and thus also the interest rate that you have to pay for the loan.

According to the provider, personal loans should be suitable, among other things, for borrowers who have little chance of getting a loan from a normal bank. However, there are limits here as well: Not only do borrowers have to be of legal age and live in Germany, they also have to Creditworthiness plays a role. If you have ever failed to repay a loan, if you have been insolvent or if you have an affidavit, you also refuse Personal loan provider these customers.

Personal loans appear only partially in the results

At Giromatch you don't necessarily end up with personal loans, the company may pass you on to cooperation partners. This can also be Auxmoney if the financing of the loan at Giromatch does not come about.

At Verivox, Check24, Finanzcheck and Smava you can display all loan offers, including Auxmoney's. So you can see how the offer compares with banks. But: Auxmoney has developed its own evaluation process (scoring), for which the company also uses data that it does not receive when applying via a loan portal. That means that the Interest rate could be slightly differentif you apply for the loan directly from Auxmoney.

This is how the investors come together

After you have requested a personal loan, the task is to find investors who want to finance the loan. They either choose projects themselves or use portfolio managers to diversify their investments in different loans. If enough investors can be found, the money is paid out by the partner bank to the borrower. As a borrower, you have yours Therefore also a loan agreement with the partner bank of the company. The checks the submitted documents and can still refuse the loan.

Borrowers usually find out quickly whether their loan is being financed. Should it become more difficult to raise enough money, the loan will be withdrawn from the website after a period of time. At Smava, smaller loans than requested can also be financed if only a certain part of the loan amount comes together.

With this type of personal loan, consumer rights apply, which also protect you with loans from the bank. For example, you have a 14-day right of objection.

What happens if you can't pay your installments?

If you have problems paying your installments, the approach of financial institutions to personal loans is no different from bank loans. You have to first late payment interest Pay for the time you haven't properly repaid your loan. The partner bank can use the Also cancel the loanif, for example, you fail to pay two installments in a row (§ 498 BGB). In this case you have to repay the loan in full.

It can also apply to personal loans too judicial dunning proceedings and garnishments come. With the loan agreement, you assign the attachable part of your income to the bank. In addition to the financial hassle, the information is also passed on to credit bureaus, which worsens their rating for you.

Good to know: Investors, on the other hand, cannot exit financing early.

How is the income from loans taxed?

If you are the lender yourself and therefore receive interest from privately granted loans, you have to do this as a Tax income from capital assets. These must be stated in the KAP annex of the income tax return (Section 20 (1) No. 5 and 7 EStG). It makes no difference whether you lend the money to friends or to strangers via a portal.

The interest is taxed at the withholding tax rate of 25 percent plus 5.5 percent solidarity surcharge. Church members also have to pay church tax. If you have not yet fully used the saver lump sum of 801 euros this year, the tax office will take this into account in the tax assessment.

You should put the loan amount, the interest rate, the term and the conditions for disbursement and repayment in writing in the loan agreement. If you deal with this loan agreement as you would with a contract between a third party, this can definitely lead to a family relationship Tax savings to lead. The Federal Fiscal Court has confirmed this in several judgments (for example in the judgment of April 29, 2014, Az. VIII R 9/13).

example: The father grants his son a loan of 100,000 euros, which he invests in the purchase of a condominium. The son then rents out his property. The interest payments represent income-related expenses for him on his rental income. They reduce his income tax in the amount of his personal tax rate.
The father, on the other hand, only has to pay around 26.4 percent tax on the interest received (excluding church tax). In this way, a tax rate differential can be exploited.

The condition for this is that the contractual partners are financially independent of each other and the borrower can also apply for the loan elsewhere. If this is not the case, the tax office will charge the interest with the personal tax rate.

Even if you get a loan without interest, there can be trouble with the tax office. That may see the loan as a gift. There are allowances for them, the period for which is 10 years. The allowances are:

  • up to 500,000 euros (between spouses and registered partners),
  • up to 400,000 euros to children
  • up to 200,000 euros to grandchildren
  • up to 20,000 euros, for example for a gift to a friend, sibling, parent or grandparent.

The interest rate advantage must exceed these exemption limits in order for the gift tax to apply.

Discuss with!

Are you interested in taking out or granting a personal loan? Discuss with other readers in the Finanztip community!

The most important questions summarized

What are the benefits of a personal loan from friends or family?

Has a loan from a friend several advantages: You can make the contract easier and more informal than a bank does. Your family or friends will not obtain any information about you from the credit agency Schufa. Relatives and acquaintances may also ask for lower interest rates than banks.
Private individuals must also does not comply with legal requirements hold for lending that apply to banks.

To the other advantages »

What are the disadvantages of personal loans?

If you want to borrow money from people in your private sphere, you should consider a few points. For example, if there is a dispute between you and the lender, you do not have the option of contacting consumer protection organizations or a banking ombudsman.

You can sign a loan agreement with a friend or relative orally to lock. After all, there is no legal requirement for this type of loan. We strongly recommend that you draw up a loan agreement.

To the sample contract »

Can personal loans also be concluded via loan portals?

If you want to borrow money privately, the money does not have to come from your circle of friends; You don't even need to know the private lender. There are companies that do Broker loans from private: Auxmoney and Giromatch.

In such cases, personal loans work like classic installment loans from a bank: You submit an application and, after checking your documents, you receive a loan, which you then have to repay with interest. However, the money does not come from a bank, but from private individuals who invest their money in these loans and through the interest Want to make money.

You should know that about the providers »

What does a personal loan cost?

In the case of private loans between private individuals, they agree on the interest rate among themselves. When interest rates are low, lenders may forego interest altogether with friends and family. When lending via a portal, on the other hand, the interest rate depends on yours Creditworthiness from. The range is quite large. However, these are not the only costs; that personal loan providers require Brokerage commission.

In addition, monthly account management fees may also apply. Therefore, the interest rates as given by the providers are only partially meaningful. They do not correspond to the actual costs.

On our site you will find the costs for a personal loan in a clear table.

To the table »

How is the income from loans taxed?

If you are the lender yourself and therefore receive interest from privately granted loans, you have to do this as a Tax income from capital assets. These must be stated in the KAP annex to the income tax return. It makes no difference whether you lend the money to friends or to strangers via a portal.

The interest is taxed at the withholding tax rate of 25 percent plus 5.5 percent solidarity surcharge. Church members also have to pay church tax. If you have not yet fully used the saver lump sum of 801 euros this year, the tax office will take this into account in the tax assessment.

More on this "

Josefine Lietzau

Josefine Lietzau

Josefine Lietzau is an editor in the Bank & Investments team. During her studies in German and English, she worked for the editorial offices of the Green League, the Jüdische Zeitung and the Superillu. After completing her master's degree, Josefine Lietzau completed an internship at the online consumer portals Banktip and Posttip, where she then worked as an editor.

Martin Berg

Martin Berg

Martin Berg was responsible for the credit and construction finance division at Finanztip until autumn 2014. He holds a degree in economics and gained experience in the financial sector at Interhyp and as a consultant at Capgemini Consulting.

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