What is a loan?

With a loan, someone provides you with a certain amount of money for a predefined period of time, which you then repay in monthly installments or at a specific date.

When do you speak of a loan?


On credit is a certain amount of money that is made available by a person, a company or a bank for a certain time. This is then repaid in monthly installments or on a specific date. The loan is used in the private sector to finance goods and services, in the commercial sector, it is used to finance investments.

In order to receive a loan, you must be of legal age, be employed and / or have sufficient income. In addition, you have sufficient creditworthiness, also called “creditworthiness”. This results from the amount of income less certain expenses and other credit obligations.

Depending on the type of loan, the data from various information points are also queried as part of the credit check. This shows whether and to what extent further loans exist and whether they are repaid correctly.

Credit cards


There are different types of credit that differ mainly according to their purpose, such as:

  • Consumer credit also called “personal loan”, which is used to finance private purposes such as furniture or cars. For this type of loan, no purpose has to be specified when applying and the loan is usually repaid in monthly installments.
  • Mortgage: This is a dedicated loan that can be used to build or buy a house, condo, etc., but also for renovation purposes. Here the use of the money must be proven (invoices, purchase).

What needs to be considered when lending?


When you take out a loan, you make a medium to the long-term financial commitment. With a loan, it is important to ensure that your household budget does not deteriorate during the term.
In certain situations, it can be useful to use credit services, especially if

– You are planning a major purchase that you cannot fund entirely from your own resources.

However, the cheapest way is for your relatives or someone from your friends to help you. In the following case, it is certainly not advisable to take out a consumer loan.

– If it is already apparent today that your budget will deteriorate during the term of the loan – for example, because a child will be born or because you will retire.

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