Right of withdrawal for loans – statutory right of withdrawal after concluding a loan agreement

Every borrower is entitled to a statutory right of withdrawal after concluding a loan agreement (Sections 495 (1), 355 BGB). The right of withdrawal extends not only to customary installment loans but also applies to a car loan, call credit or a building loan. If the borrower exercises his right of withdrawal, he is no longer bound by his declaration of intent to conclude a loan agreement with the lender.

Credit Withdrawal Requirements

Credit Withdrawal Requirements

The borrower has the right of withdrawal for a period of two weeks after submitting his declaration of intent. The revocation must be sent to the lender in text form, but does not have to contain any reason. If the borrower is considering a revocation, the legal exclusion period of two weeks must be observed. If it passes unused, the borrower is bound by the contract. It is therefore always advisable to document the timely revocation and its acknowledgment by the lender as evidence. The borrower should therefore withdraw by registered post. The corresponding delivery note from the postal official documents the timely access to the recipient.

Lender’s duty to provide information

The two-week cancellation period is set to run when the borrower has been informed of his right to cancel upon conclusion of the contract by means of a clearly structured instruction in text form. The written notification must not only contain comprehensive instructions on the details of the right of cancellation and the expiry of the deadline, but also the name and address of the person to whom the cancellation is to be declared.

Consequences in the event of a violation of the duty to provide information

The withdrawal period can also be extended under certain conditions. On the one hand, this is the case if the cancellation policy only takes place after the contract has been concluded. Then the cancellation period is one month. If – as in the case of a credit contract – the contract is to be concluded in writing, the cancellation period also begins to run when the borrower has been given a contract document or his written loan application or a copy of one of these documents. If this is not the case, the right to withdraw expires at the latest six months after the contract is concluded. However, an exception will be made if the borrower has not been informed or has not been properly informed about his right of withdrawal. In this case, the borrower has an unlimited right of withdrawal.

Cancel credit

Cancel credit

If the possibility of a revocation is ruled out, but the borrower still wants to withdraw from the contract, termination should be considered. Consumer credit law grants the borrower an ordinary right of termination for ordinary installment loans and an extraordinary right of termination for loans secured by mortgages (sections 489, 490 BGB).

The ordinary right of termination also distinguishes between termination of the contract with a fixed interest agreement and variable interest.

Unsubscribe from fixed interest rates

If the loan agreement is based on a fixed-rate agreement, the borrower has the first opportunity to terminate the contract six months after receiving the full loan with three months’ notice (section 489 (1) no.2 BGB).

This legal regulation can also be found in the credit terms of banks for loans with a fixed interest rate. As a result, the borrower can always terminate a fixed-interest loan agreement with a three-month notice period after the so-called six-month blackout period.

The borrower has another option to terminate the contract if an agreed fixed interest period expires and he does not conclude a subsequent agreement with the lender. Under this condition, the contract can be terminated by the borrower with a notice period of one month , but at the earliest for the end of the day on which the fixed interest period ends (§ 489 Paragraph 1 No. 1 BGB). Accordingly, notice of termination can only be given for the expiry of the day on which the fixed interest rate ends if a contractually agreed adjustment of the interest rate is made in certain periods of up to one year.

In any case, however, the borrower has a right of termination ten years after receipt of the loan in full with a notice period of six months (Section 489 (1) no.3 BGB).

Unsubscribe at variable interest rates

Unsubscribe at variable interest rates

If, on the other hand, the loan agreement is concluded with a variable interest rate, the borrower can cancel at any time with three months’ notice (Section 489 (2) BGB).

The law basically considers the borrower to be in need of protection in the case of loan agreements with variable interest agreements. In this case, the risk of an additional financial burden due to interest rate adjustments is practically constant for the borrower. Therefore, he should be able to withdraw from the loan agreement under easier conditions.

Ineffective credit termination

Consumer credit law places the effectiveness of the loan termination on a clear condition. If the borrower makes use of the right of termination, he is obliged to repay the loan amount within two weeks after the termination takes effect (Section 489 (3) BGB).

The termination becomes effective upon receipt and acknowledgment by the lender. From this point on, the statutory two-week period runs. If the loan is not repaid on time, it must be regarded as irrelevant.

No exclusion of the right of termination

The borrower’s right of termination cannot be excluded or made more difficult (Section 489 (4) BGB). General terms and conditions (GTC) or loan terms of the credit institutions can therefore in no case legally shorten the borrowers’ termination rights. Appropriate credit contract terms would be legally irrelevant from the outset.

Conditions to avail the Credit Bureau-free credit from abroad.

Banks in Germany have clear rules when it comes to lending. There the income is checked, the Credit Bureau and the employment. If a customer can fulfill these three approval criteria, his credit request will be fulfilled. But often loan seekers have negative entries in the Credit Bureau, which nullifies a conventional loan. There is a Credit Bureau-free loan from abroad for these customers.

Credit Bureau-free credit from abroad – the conditions

Schufa-free credit from abroad - the conditions

But sometimes it is not just the negative entries that do not fulfill a credit request. Income is often too low or the loan seeker has a temporary employment contract. These circumstances make it difficult to borrow. If the customer knows in advance, if he has a temporary employment contract or an income that does not have a garnishment limit, he will not come for a Credit Bureau-free loan from abroad. With this constellation, he should be able to name a second borrower or a guarantor so that he can get a loan from a German bank.

A Credit Bureau-free loan from abroad is on the Internet and is heavily advertised. The loan is called Swiss credit and has been on the credit market for many years. When looking for a loan, the loan seeker should know that the more compact and lurid the advertising for these loans is, the more the customer has to be careful not to get to a dubious credit broker. The customer can recognize this from the fact that a dubious credit broker requests prepayment or prepayment before the loan approval. In general, an intermediary may only calculate the commission due to him after the loan approval. In many cases, the commission comes from the banks and the customer is included in the loan agreement.

However, very few contacts would come about for a Credit Bureau-free loan from abroad. Often these banks have not provided a loan application, so a credit intermediary has to do it. In general, a credit broker is not to be demonized, because even in particularly difficult cases, he can still provide his customer with an acceptable loan. A Credit Bureau-free loan from abroad now almost exclusively comes from Liechtenstein. Until 2009 they came from Switzerland. But due to internal bank events, these banks were prohibited from granting German loans.

Lite Bank has been doing this since 2010. It has adopted the same terms and conditions for this type of loan. In general, these loans are awarded so that Credit Bureau is not queried, and the loan is not entered. The loan seeker must provide permanent employment with a corresponding income. There are three loan amounts that are approved.

A Credit Bureau-free loan from abroad has the following conditions:

A Schufa-free loan from abroad has the following conditions:

The $ 3,500 loan is repayable in 40 monthly installments at a rate of $ 105.15, the total loan amount is $ 4,206.00, the effective annual interest rate is 11.12%, which results in a fixed borrowing rate pa of 8.84% over the entire amount running time.

The USD 5,000 loan is repayable in 40 months at a rate of USD 150.20, the total loan amount is USD 6,008.00, the annual percentage rate is 11.11%, which results in a fixed borrowing rate of 8.83% pa ‚Äč‚Äčover the whole Running time.

The $ 7,500 loan is also repayable in 40 months at a rate of $ 225.80, the total loan amount is $ 9,012.00, the effective annual interest rate is 11.11%, the committed borrowing rate pa 8.83% for the entire term.

Despite contrary opinions and so-called studies that a Credit Bureau-free loan from abroad is hardly approved, is not correct. If the loan seeker can meet the above information, he will also receive a loan from abroad. The customer only has to be careful when choosing the credit intermediary. The Credit Bureau-free loans are booming and with it so-called black sheep who want to enrich themselves from the financial hardship of loan seekers. This means that preliminary costs and prepayments are permitted, and the signing of dubious insurance contracts is also not legal.

The loan seeker should look for a loan broker who has years of experience in this area and who can do without lurid advertising. TÜV-certified agents can also be trusted. The customer submits his loan application to the intermediary, who will then make a preliminary loan approval based on the entered data and send the customer which documents are required to check the creditworthiness. Contrary to statements to the contrary, the creditworthiness is very well checked, only the Credit Bureau is left out.

If the customer has sent the necessary documents by post, he must first carry out the Postident procedure, which is only a recognition of his person. If the bank has found the documents to be good, a final loan approval will be given. The whole procedure takes up to 8-9 working days.

The customer should also know that the Credit Bureau will not be viewed, but the public debtor directory will. If there are entries such as bankruptcies, foreclosures, oaths of disclosure or attachments, the foreign bank will not approve any loans either. After the loan approval, the bank will instruct the money within 24 hours.



In times of limited employment contracts and unemployment, many people are in financial need. There are more debtors in Germany than ever before. The number of customers with low credit ratings is increasing more and more. The rush for the Credit Bureau-free loan from abroad proves this. The regulations of banks have also tightened, it is no longer so easy to take out a loan.

If you are in need of money and need short-term funds, but the Credit Bureau is bad, the customer could possibly have a disposition set up in a conversation with the bank or increase the existing one. If an urgent invoice has to be paid or an urgent repair has to be carried out, the overdraft facility could be the solution. However, it should only be used for a short period of time because it is expensive. Here, the interest rate is also in the double-digit range. There are banks that demand a full 15% for the overdraft facility. If the customer overdraws the granted credit line, the bank charges another 5%.

Cheap credit – you can apply for an installment loan from the bank

Anyone who needs money in a manageable framework today has various options for fulfilling some wishes with additional money. If it is a cheap loan, you can apply for an installment loan from the bank. On the other hand, as a bank customer you can also apply for a overdraft facility. The overdraft facility is an agreed overdraft facility for the checking account. The customer may overdraw his checking account within this overdraft framework. Interest rates for this overdraft facility are, however, comparatively high. As soon as money arrives in the account, the overdraft amount is reduced. Only interest is added to the amount by which the account is overdrawn.

The installment loan has a different approach.

The installment loan has a different approach.

It is initially a normal loan for a certain amount. When the contract is concluded, the loan amount, the interest rate and the contract duration are determined. The monthly rate then remains the same until the end of the term of the contract. With an installment loan, the interest rate is significantly lower than with an overdraft facility. The advantage is that the loan is cheaper with clear terms. There is also a fixed date when the loan will be repaid. With a overdraft facility, however, the account owner can quickly get used to the fact that he has always overdrawn the account. It is therefore more difficult for him to bring the current account to plus.

Overdraft facility due to the low interest rates

Overdraft facility due to the low interest rates

The installment loan is in most cases a cheaper alternative compared to the overdraft facility due to the low interest rates, but if it should be quick, an urgent loan is recommended. It is suitable for planned purchases that exceed the current account. Such an acquisition can be financed in a very manageable and calculable manner. With a defined contract term, repayment is secure and leads to financial discipline.