Loan Conditions - an overview. Explained by Maxda!

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The Loan - a flexible form of raising capital

Quickly get your desired loan with the right partner

If cash is needed at short notice (e.g. for property financing), taking on external capital is often the best solution. What should be considered to borrow money on the most favorable terms?

The Loan - a flexible form of raising capital

Under a loan agreement the lender undertakes, by means of a contractual obligation, to temporarily provide the borrower with a specific sum of money or an item (loan in kind). The borrower is obliged to pay agreed interest and to repay the loan when due. If no agreement on interest payments exists, interest is payable annually. If no repayment date is specified but interest has been agreed, the loan's maturity depends on whether the lender or the borrower terminates the loan, whereby a notice period of three months must be observed in any case. A loan therefore denotes a monetary loan with or without interest, whereby interest rate, interest payment dates and maturity — unlike with a credit — do not necessarily have to be contractually agreed.

Loan relationships often arise through commercial loan brokers such as Maxda Kreditvermittlungs-GmbH and can, according to maturity, be divided into bullet loans (end-fällige Darlehen), annuity loans, repayment loans and term-interest loans. With a bullet loan the loan amount is repaid in a single payment at the end of the term, whereas annuity loans have annual installments consisting of principal repayment and the proportional interest that remain equal in amount. In contrast to the bullet loan, where principal repayment increases disproportionately over time, the repayment ratio of an annuity loan shows a steady increase. In a so-called repayment loan (Tilgungsdarlehen) the principal repayment remains constant over the term; the interest portion, which decreases due to the principal repayment, is passed on to the borrower in the form of a lower installment. Term-interest loans are installment loans in which the interest amount for the entire term is calculated and added to the loan amount at the beginning of the term.

Loan - Repayment in Equal Installments

The repayment of loans and capitalized interest then takes place in always equal installments. Granting a profit participation in addition to interest is possible; this loan form is referred to as a profit-participation loan (partiarisches Darlehen). Provision of an agreed framework for the loan is also feasible in the form of a so-called call loan (Abrufdarlehen). With so-called rolling money market loans a flexible repayment is agreed, with the interest rate continuously adjusted to the current capital market situation. Special forms of loans include the home savings loan (Bauspardarlehen), which serves to finance private housing, the estate loan (Massedarlehen), which can be taken out by the insolvency administrator to maintain business operations in the event of corporate insolvency, as well as loans in kind (Sachdarlehen). For loans in kind only fungible goods (items replaceable by an identical item) are eligible. Unlike rent or lease, ownership of the borrowed item arises through a loan in kind; the borrowed item can therefore be consumed or sold by the borrower. Upon termination of the loan relationship, an item equivalent in type, features and quality must be returned to the lender.

In addition to the monthly or annual repayment installments, the borrower or credit taker also has the option to make special repayments and already repay a higher amount during the term. This option must be agreed with the lending institution in advance.

Furthermore, loans often incur additional fees that flow directly into the effective annual interest rate. For an installment loan these fees are usually between one and three percent of the total amount. In property financing, on the other hand, a flat rate is often defined. For larger loans commitment interest (Bereitstellungszinsen) often applies in addition.

How to get a loan on the best terms?

To obtain a loan on favorable terms, the effective annual interest rate of the loan should first be calculated. This is composed of the nominal interest rate, the disbursement rate (Disagio), principal repayment and the fixed interest period. For special loan types such as term-interest loans or annuity loans the costs can be determined by annuity calculation. If the interest rate has been calculated according to customary banking criteria, it contains a margin that covers the risk of non-repayment of the loan. The better the borrower's creditworthiness, the lower the probability of loan default, which is reflected in a lower effective interest rate. Therefore, good creditworthiness is a basic prerequisite for a favorable loan; in this case terms can be negotiated much better. Based on an income-and-expenditure statement prepared by the borrower, showing his monthly income and monthly financial burdens, it can be determined whether the available income is sufficient to pay the loan installments.

Optimal loan conditions with Maxda

It can also be advantageous to turn to a commercial loan broker with your loan request. Due to the numerous customers successful brokers like Maxda bring to lending institutions, loan conditions that are otherwise only granted to large customers can also be negotiated for private customers. A commercial loan broker will hardly ask what the loan is needed for, because for them the prospect of problem-free repayment is decisive. If the loan applicant is in permanent employment and the installment amount corresponds to his financial capabilities, a positive decision will not be a problem. Even if these prerequisites are not met, mediation of a loan is possible; the provision of a solvent guarantor who can cover the installments if necessary is sufficient. Established brokers like Maxda know the lending institutions they work with and know which bank currently has available liquidity. Since it is in the nature of banks to lend money, they always try to prevent overliquidity and, despite numerous legal provisions, there is always room for discretion by the lending institution when granting a loan. Parked capital of a bank can therefore significantly improve the chances of a positive loan decision. Due to agreements between the commercial bank and the broker, the loan is already secured as soon as the broker gives the green light.

Quickly get your desired loan with the right partner

The Maxda Kreditvermittlungs-GmbH is always a competent partner for its customers when it comes to loans. The company is one of the most important financial service providers on the German market and is a member of the Bundesverband Finanzdienstleistung e.V. Through cooperation with well-known lending institutions within Germany and the EU, even difficult loan requests can be fulfilled and absolute special conditions can be achieved for customers. Personal support is highly valued by Maxda's advisors, because the wishes of the customers are our highest priority. We prepare a tailor-made offer for each customer; all that is required is to send the completed loan application together with a copy of the latest payslip or pension notice to Maxda. The documents are checked by us on the day of receipt and terms and possible loan variants are discussed with the customer. If positively decided, we arrange a loan with one of our partner banks at first-class conditions. The only prerequisites for loan mediation are reaching the age of 18 and an income of more than €850 net per month. If these prerequisites are not met, Maxda Kredivermittlungs-GmbH can still obtain a loan for you; provision of a solvent guarantor is sufficient. We can arrange loans up to €250,000 for any purpose, with the interest rate remaining unchanged for the entire term. We also offer special loans for civil servants and long-term employees; loans without a Schufa entry are possible through our European partner banks up to an amount of €3,500. Thanks to our many years of experience and our financially strong partner institutions, we usually find a solution even in difficult cases and can make many things possible. Our friendly staff are happy to assist you personally, by telephone or by e-mail with any questions regarding your loan request.