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How To Get a Car Loan in Germany? [2023 Guide]

Mercedes Benz Parked in a Row

A car loan is the best solution when you are about to buy a car but don’t have enough savings in your bank account. Luckily, it’s relatively simple to finance a vehicle in Germany. In fact, you can take out a car loan or finance it via the car dealership.

Foreign nationals can receive a car loan to finance a car in Germany. The main requirements include residence in Germany and a stable source of income, preferably through employment. Car loans are available in traditional banks, peer-to-peer lending companies, and car dealerships.

Whether you buy a new or used car from a dealership or private seller – you can finance it with a loan. In this article, we explain how foreign nationals can receive a car loan and your best car financing options in Germany. Besides, you can see the best car loans in another article.

Finance a car as a foreigner in Germany

A typical new mid-range car will cost you 20,000 EUR to 40,000 EUR, depending on the model and the options you choose.

Most people don’t have such large sums sitting in their banking accounts. You might not know it, but car loans are the most common way Germans finance their vehicles. Only a few people buy cars in cash. In fact, 59% of all loans in Germany are used for car financing.

Wondering if foreigners can buy a car in Germany?

Hence, there are many ways one can finance a car in Germany. Even as a foreign citizen, you have a wide variety of options.

Financing a vehicle in Germany is also very beneficial since interest rates are very low. For a car loan, you will usually need a down payment of a couple of thousand euros.

Car financing in Germany

A picture a hand with loan form with a pen

If you don’t have enough cash to buy a car, you can finance a vehicle in Germany. There are a wide variety of loan providers who will secure reasonable financing conditions for your purchase.

You can select between traditional banks, e.g., Sparkasse, direct banks, or more flexible financing options such as Auxmoney and Smava.

Generally, there are two main ways to get a car loan in Germany:

  1. Car loan from a bank or other financial institution
  2. Car financing through a car dealer

Car financing or leasing?

1. Installment loan (Ratenkredit)

Classical private loan with fixed monthly installments is Germany’s most common type of car loan. Such loans are given based on your creditworthiness.

Due to the higher security, most German banks offer better conditions for car loans than other financing reasons.

In that case, the borrower must provide the registration certificate Part II when applying for a loan. Hence, it gives banks more security. Furthermore, lenders make a basic down payment of a few thousand EUR.

Check out competitive rates from 1822direkt, and SWK bank.

Keep in mind that car buyers can’t sell the vehicle while the loan period is still running. Usually, it’s around five years.

You can select between dozens of banks that provide such financing options or opt for one in your house bank.

To receive a loan, foreign nationals must have their primary residence in Germany and a stable income.

Nonetheless, banks are more careful with applicants’ SCHUFA (credit) scores. If it’s slightly off, they might refuse your application.

Your own (current) bank is usually the best option for a car loan since they know your creditworthiness and can quickly approve your request. The main drawback is that they might not always have the best interest rates.

In addition to the main banks, you should check the offers of direct banks. Car financing online with a direct bank is often cheaper than financing the car through a branch bank.

Direct banks employ fewer staff and don’t have physical branches in Germany; hence, their costs are lower.

Standard banks provide competitive rates of interest to their customers. So you can try approaching your bank for a loan.

Depending on the car price, a car loan term can range from 24 to 60 months. The best interest rates are offered when a 20% down payment is made. However, the earlier payout of the bank loan might cost you money.

Check your SCHUFA score before applying for a loan.

Check out best car loans in Germany in this article.

2.  Loan comparison platforms 

One of the best ways to get a car loan in Germany is to select it via one of the online comparison platforms, such as Smava, Tarifcheck, and Verivox.

1. Smava is Berlin-based and Germany’s first FinTech company, founded in 2007. You can find and apply for various loans in Germany on this platform, including online and classic financial institutions.

It’s rated as 5 out of 5 in finding financing in Germany. With Smava, you can apply for loans from Commerzbank, Postbank, Unicredit, Sparkasse, and Deutsche Bank. Loans between 1,000 EUR and 120,000 EUR are available.

2. Tarifcheck is the second place to compare loans and mortgages in Germany. The process is simple: just select the loan amount and the term duration, and you will see all options.

3. Verivox is one of the largest German platforms to compare all sorts of stuff, including loans, car insurance, internet deals, and electricity & gas plans.

There, you can choose the type of loan and the conditions. Loans up to 100,000 EUR for up to 10 years are available. All inquiries via Verivox are SCHUFA-neutral.

3. Peer-to-Peer loans

Another option to finance a car in Germany would be a peer-to-peer loan. They are more flexible in their terms and requirements than traditional bank loans.

Peer-to-peer loan providers are still new on the market but have become widely popular due to the ease of the application and high acceptance rate.

In such companies, loans are financed by private investors, so they are more tolerant of the applicants. Hence, the requirements are lower, and getting a loan is more accessible.

Advantages of car loans from peer-to-peer providers:

  • Easy application process
  • Fast approval and payout
  • Low interest rates
  • Tolerates lower SCHUFA score

Auxmoney is the largest provider of private loans in Germany.

They are known for their high success rate when taking a car loan. You can borrow between 1,000 EUR and 50,000 EUR for 12 and 84 months.

4. Car loan via car dealership

a picture of laptop and a loan form

Some people prefer to finance their car directly at the car dealership. Every car dealer has a partnership with some bank, where you will apply for financing.

Hence, banks like Volkswagen Bank, BMW Bank, Audi Bank, and Mercedes Bank collaborate with car dealers and specialize in providing car loans for car buyers.

Financing through a car dealer offers advantages, such as an easy and speedy process. You can select the car and request financing right there in one spot.

Therefore, no additional bank appointments and no further paperwork are needed. Furthermore, you will get the answer regarding the financing right there at the dealership when buying the car, yet rates aren’t always the best.

The car dealer will check your credit score online and initiate a credit request with the bank. Once approved, he will inform you.

It’s recommended to select a “Schlussrate” option when financing a car through the car dealership. This will secure the lowest interest rate and monthly installments for you.

Example of a car loan in Germany

You might see the following numbers when taking a standard car loan in the bank:

Bank loan
Car price 24,700 EUR
Down payment4,940 EUR
Monthly installment 599,63 EUR
Loan term36 months
Interest rate 5,99%
Total car cost 26,526 EUR

Best places to get a car loan in Germany

There are many banks in Germany that provide car loans for private clients. Auxmoney provides the easiest loan solution with minimal requirements. Apart from this, you can go with conventional German banks.

Some of the best car loans regarding conditions, ease of application, and approval rates can be found on loan comparison platforms Smava and Tarifcheck.

On the Smava platform, you can apply for a loan at some of the most popular banks in Germany, including Commerzbank, Deutsche Bank, Barclays, Bank of Scotland, and Santander.

Furthermore, below, you can see the car loan conditions in the biggest German banks when taking out 20,000 EUR for 60 months (classic car loan).

BankMonthly instalmentInterest rate
Deutsche Bank348€3,48%

By using Smava, you will have access to all of those banks.

1. Smava

Smava is one of the favorable solutions for a car loan in Germany. It’s the biggest online platform where you can:

  • find
  • select
  • apply
  • and receive a loan in Germany

Smava will give you an overview of 70 loans from more than 20 leading credit banks, online lenders, and peer-to-peer lenders. For any help, you can contact one of the 200 loan advisors.

Benefits of a car loan with Smava:

  • decent and legitimate loan offers with favorable conditions
  • neutral SCHUFA request: your loan application does not affect your credit score
  • loans from 500 EUR to 120,000 EUR
  • loans for the self-employed
  • it’s 100% free!
  • no additional or hidden costs
  • effective APR from 0,68%
  • fast processing time (max. two working days)
  • fast loan payment

Steps to get a car loan with Smava

  1. Submit all information after you will receive loan offers from different banks in Germany.
  2. Select the bank and apply for a desirable loan directly from the platform
  3. If your documents are complete and all requirements are met, you will receive your money within a very short time

Read our full review on Smava.

2. Auxmoney

Auxmoney is a peer-to-peer lending online platform that eliminates the high cost and complexity of financing via traditional banks.

The company has a very straightforward, fast, and easy process for lending money, making the process as easy and transparent as possible.

Over the company’s history, Auxmoney has given over 325,000 loans of more than 2 milliard EUR. Auxmoney is rated as 4,8 out of 5 in service and offerings.

Benefits and conditions of Auxmoney:

You can get a loan with a low credit score
Favorable interest rates – from 5.40% / year for a loan of 50,000 EUR
Fast money from private and institutional investors
Instant quote/offer
Loans from 1,000 EUR to 50,000 EUR
Loan term between 12 and 84 months
Completely online process with no paperwork
You can apply for a loan even if a traditional bank refuses your loan request

Application and the whole process at Auxmoney are made online.

The main requirements:

  • You are resident in Germany
  • You have a current account with a German bank
  • You have a regular income

After fulfilling these requirements, you will receive a loan from Auxmoney within 24 hours or the next few days.

From our research and experience, Auxmoney is by far the best and easiest place you can get a loan as a foreigner; the refusal rate is very low, as well as the requirements. It’s a private organization powered by investors’ funds, which differs from the traditional bank.

Read our full review on Auxmoney.

3. SWK

SWK is the largest direct bank in Germany and has been around since 1959. Over 20,000 customers had a positive experience with SWK bank.

To get a car loan, you can easily apply online; in fact, the entire financing process is digital. Hence, you can expect a straightforward application and quick processing.

Loan terms at SWK Bank:

Term durationLoan (EUR)Interest rateSuccess rateHighlights
24 – 120 monthsup to 100,000From 1,54%; Average – 3,29%HighSimple and fast
Loan amount2,500 – 100,000 EUR
Annual interest rate1.54 – 3.92%
Effective interest rate1.55 – 3.99%
Age requirement18
Employment requirement 6 months
Minimum required annual income0 EUR
Administration fee0 EUR

4. 1822direkt

Bank 1822direkt is a part of the well-known Sparkasse bank in Germany. At 1822direkt, you can get a loan between 2,500 EUR and 50,000 EUR.

The duration of the loan varies between 12 months and 120 months.

Here is an example of a basic loan with 1822direkt:

Loan amount 15,000 EUR
Term84 months
Annual interest rate2,99%
Borrowing rate2,95%
You pay 83 monthly installments of 197,70 EUR and 1 final installment of 195,65 EUR
Total16,604 EUR

5. Santander CarCredit

Santander is a large international bank. In Germany, it belongs to the top 5 banks in the country. They offer several loans and credit cards for private clients.

Car loan with Santander CarCredit:

  • Favorable interest rates
  • Quick credit decision
  • Non-binding inquiry and calculation
  • Loan amount – from 1,000 EUR to 60,000 EUR
  • Loan duration – from 12 to 96 months
  • Annual interest rate – from 1,99% to 7,98%
  • 90 days installment freedom
  • Easy application and convenient online identification with VideoID

With Santander’s car loan, you can increase your credit amount during the term anytime. Moreover, you can also put your credit on pause.

Compare various car loan options

Before you opt for any of the options mentioned above, it’s crucial to compare all offers on the market. Germany is big on cars and so on car financing!

Have a look at comparison websites that can give you an idea of all banks and private loan offers and rates. That way, you can grab the best deal. Some of those sites are:

  1. Smava
  2. Tarifcheck

To receive an individual loan offer, select a loan type for a car purchase or “Autokauf“ / “Autofinanzierung” and submit a request.

After that, you will receive the best interest rates for car loans. When applying for the loan offer, you will receive approval within one day, in the best case.

Some of the best platforms are Smava, Tarifcheck, and Verivox. With Smava, you can borrow from 1,000 EUR and up to 100,000 EUR for up to 10 years. The loan can be taken online and with a same-day payout.

Requirements for a car loan in Germany

Loans, however, aren’t granted to everyone who applies. You also need to fulfill particular requirements.

For example, you can only apply for car financing if you live in Germany and have income. Here are the standard bank requirements:

  • At least 18 years of age
  • Main residence and residence permit in Germany
  • German bank account
  • Sufficient credit score (SCHUFA)
  • Regular income (at least 600 EUR per month)
  • Employment for at least 1 month
  • For self-employed persons and freelancers should submit at least 1 income tax assessment which isn’t older than 3 years
  • Retirees are also eligible

Furthermore, the longer you have been living in Germany and the longer your residence permit, the better chances you have when applying for a loan.

Foreign citizens with permanent residency in Germany get the highest approval rates.

To increase the chances of getting a car loan, apply for a term that isn’t longer than the duration of your residence permit.

How to apply for a car loan

a picture of a car parked in front of an apartment

The application for a loan is very straightforward. Depending on which type of financing you choose, you might submit it online, at the branch bank, or the car dealership when purchasing the car.

Firstly, you need to prepare a down payment of around 20% of the purchase price. If you currently don’t have enough money, you can take out a small loan to cover it. Auxmoney and Smava are perfect resources for small amounts.

You can get a loan even if you buy used cars from dealers and private sellers. However, when purchasing from a private seller, you must apply for a different loan.

This can be a standard installment loan, allowing you to pay for the car. That way, you can take advantage of more favorable car prices from private offers and good private loan conditions.

After receiving the loan, you can simply transfer it to the seller’s bank account or pay in cash.

What is important for car loan application?

1. Credit Score (SCHUFA): Credit score is the most crucial factor when applying for a car loan in Germany. It applies to both – Germans and foreigners.

It can be secured by providing a stable job and regular monthly income in the country. Don’t forget to get at least 3 payslips from work.

2. Down payment: Clients are often asked to make a down payment of around 20% of the car price upfront. Only after will they be able to receive financing from the bank.

The rule is that the higher the initial payment for the car loan, the easier it is to get a loan, the lower the interest rate, and the smaller the monthly payment.

3. Repayment duration: Depending on the price of the car and the type of loan you choose, you can select financing ranging from a period of 24 to 60 months. However, the length of your residence permit in Germany might affect the loan term.

Required documents for the car loan

Every bank and financial institution will ask for a particular set of documents before approving the loan.

In general, this includes:

  • Passport or ID
  • 3 last salary statements
  • Copy of the car purchase contract or registration certificate II as proof of purchase
  • Details on vehicle
  • For self-employed persons and freelancers should submit at least 1 income tax statement which isn’t older than 3 years

Within 4 weeks after the loan payment, a copy of the sales contract must be submitted to the bank. You can simply upload it in online banking or send it via email.

If you haven’t selected the car yet, you can still apply for a car loan without mentioning the payment date. In that case, the loan will be reserved for you, and the bank will pay out the borrowed amount in 3 months. Interest applies after the payment date.

Interest rates for car loans in Germany

In Germany, the average interest rate for car loans is 5.93%.

In 2021, interest rates are still at a low level in Germany. According to the Deutsche Bundesbank, the average interest rate for consumer loans in May 2020 was 5.93%.

Here is an example of current rates for car loans in Germany.

Credit Price of the car (loan) – 18,200 EUR
carNew car
loan term48 months
low-interest rate 2,24 %
average interest rate3,99 %
high-interest rate 8,88 %

Therefore, the difference between the lowest and highest interest rates for car financing is 6,64%.

Car loan with no job

In Germany, it’s very rare for a bank to give a loan to someone with no job.

Without it’s almost impossible to prove the applicant’s creditworthiness, leaving alone a good credit score.

Even people with an income, for example, who receive unemployment benefits, will struggle to get a car loan from the bank. The unemployment benefits they receive won’t be enough to cover monthly installments, which are about 600 EUR in many cases.

The only option to receive financing without a job is to try to apply for a smaller loan.

If you are looking to buy a car in Germany, read our article on the cheapest cars in Germany and some other car-related posts:

  1. Can a foreigner buy a car in Germany?
  2. Used car prices in Germany
  3. Getting a car loan in Germany
  4. How to buy a car in Germany for export
  5. Best websites to buy a used car in Germany
  6. Car insurance in Germany
  7. Cheapest car insurance in Germany
  8. Buying vs leasing a car in Germany
  9. How much does it cost to own a car in Germany?
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