Meaning of a credit institution

The term credit institution refers to companies that engage in monetary or credit transactions on a commercial scale or carry out such transactions to an extent that requires a business operation organized in a commercial manner. A credit institution is primarily responsible for the functioning of money and capital flows as well as for handling cash and cashless payment transactions. A credit institution (also monetary institute) therefore operates in the banking or credit sector and carries out banking transactions.

It is important to note, however, that a credit institution is always a bank. Conversely, a bank is not always a credit institution.

The main tasks of a credit institution include processing payment transactions, supplying loans and advances, accepting interest-bearing deposits (deposit business), and handling securities transactions. They also serve to balance supply and demand for investments and credit, and they can create money. Overall, every credit institution is subject to national and international legal regulations. Banking supervision monitors compliance with these rules. These laws include, for example, the Kreditwesengesetz (KWG). The Kreditwesengesetz serves market regulation and market order.

The KWG also regulates which companies or institutions do not qualify as credit institutions. These include, for example, social insurance carriers, private and public insurance companies, the Federal Employment Agency, and others. Credit institutions are companies that exhibit the following characteristics:

• it is a company and not a single natural person
• one of the banking transactions named in § 1 I 2 No. 1–12 KWG is carried out
• a commercial operation must be present in order to carry out business activities and transactions on a commercial basis

Examples of credit institutions include banks. Their core business includes, among other things, the issuance business. The purpose of such transactions is to raise equity and debt capital through securities. Cooperative banks are also counted among the credit institutions. Cooperative banks are operated under a different legal form and therefore bear their own name. The legal form can be a cooperative or a stock corporation. Another example of a credit institution is universal banks. Universal banks offer all types of banking transactions. The Deutsche Bundesbank is not formally counted among the credit institutions because it performs special state tasks.

What macroeconomic functions does a credit institution fulfill?

In principle, a credit institution fulfills three important macroeconomic functions. On the one hand, every credit institution should create a balance between the supply of deposits and demand, among other things by transforming many small savings amounts into large loan packages.

Furthermore, savings and credit needs with different time horizons should be met, which is achieved by banks forming a pool. A pool is the sum of deposits plus the sum of loans.

On the other hand, each credit institution should reconcile the different maturity interests of debtors and creditors. A guiding principle here is that the amount and maturity of the loans granted must correspond to the deposits made available to the credit institution. In this context, the following factors are particularly important: profitability problems, liquidity risk, the risk of bank failure, and interest rate risk. Finally, each credit institution is also responsible for risk transformation, i.e., each depositor relies on the credit institution to grant loans with care and expertise, reconciling the different risk appetites of debtors and savers.

To this end, the credit institution uses the following means: loan monitoring, portfolio management, liability through equity, and contractual arrangements with borrowers and savers. With regard to money creation, the credit institution plays an important role in that it returns money to the economic cycle through loans and withdraws money from circulation by placing capital with the central bank.

If you are looking for a suitable credit institution where you can obtain a loan, you should contact MAXDA. Here you will receive optimal advice as a customer and your wishes will be given the greatest possible attention.

Processing of a loan application by a credit institution

You can submit a loan inquiry by email or by post, after which the corresponding documents for the loan application will be sent to you. You must then complete the loan application, sign it and return it to MAXDA together with the required documents.

Once all the necessary documents have arrived with us, it can be checked whether the loan will be approved. You will also be contacted so that we can personally go through the conditions and options with you. If you prefer, you can also receive advice on site. Allow approximately one week for the entire process until the loan is disbursed.

What loan amounts does MAXDA grant?

You can apply for a loan with us between €3,000 and €250,000. When applying, you must also provide personal information such as your name, address, date of birth, marital status and details about your current financial situation. In addition to the completed and signed loan application, you must also submit a current payslip when applying.

Conditions for loan brokerage

It is important that you have a regular income and are at least 18 years old. Unemployed persons find it difficult to obtain a loan, but if you have a guarantor, MAXDA is also happy to broker loans to unemployed applicants. If it is a loan without Schufa, no Schufa entry will be made for this loan. The reason is that this loan is mainly granted by foreign banks.

Terms at MAXDA

In principle, the annual APR, regardless of the term, is always from 3.99 percent. You also repay the loan in the agreed monthly installments, with repayments starting already after the first four weeks. During the entire repayment period, the interest rate you pay to the credit institution remains unchanged. This allows you to get an idea in advance of how high the costs will be.

There is also the option to repay the loan in a single sum, for example if you have inherited money. There are no costs for you when requesting a loan, because the inquiry is completely non-binding.

What else distinguishes MAXDA when granting loans?

We are particularly appreciated for our reliability and accuracy. Many customers are convinced by the loan offers and options for mortgage financing (building society). MAXDA is one of the leading financial service providers in Germany and popular with private customers. MAXDA also aims to align itself with the wishes and ideas of customers — therefore our services offer very good conditions and you will always receive good advice.

In addition, MAXDA works independently with the leading lending banks from Germany and Europe, which makes many things possible. Loan applications are processed very quickly, and you will therefore receive your money in the shortest possible time, completely hassle-free and unbureaucratic. Even for those who have otherwise been rejected by their credit institution, MAXDA has a solution. With special loans, even seemingly hopeless wishes can be fulfilled.

What do you need to consider when applying for a loan?

First, you must start a loan inquiry. To do this, simply fill out the form online and send a non-binding loan inquiry to MAXDA. In the next step, the loan application will be sent to you by email or post, which you then fill out completely and truthfully. You then send the completed and signed loan application back to us, together with a copy of your current payslip.

As soon as MAXDA has received all documents, the application will be checked immediately. We will then get in touch with you and inform you of the decision. If you have any further questions, you can clarify them at any time by phone or email.