To ensure that a loan does not become a debt trap, there are a number of aspects to consider. Reputable lenders will protect themselves in advance by examining your financial situation. However, this can change over the years – even in the negative sense. If you think about taking out a loan, your income also plays a major role. The amount of credit you can use to calculate your current salary is described in this article. See for a summary

This is to be considered before applying for a loan

This is to be considered before applying for a loan

Loans will be a further financial burden for you over the life of the loan. A credit institution will therefore look at your current financial condition before placing a loan. After all, every bank wants to minimize its risks and be sure to get the borrowed money back. Therefore, before you take the crucial step and take out a loan, you need to create transparency for yourself about your financial situation. If you have little money left for a possible loan repayment, you must select or adjust the rates accordingly. So, look for the appropriate loan installment for your financial circumstances and at the end take a longer term into account.

Our credit comparison shows that you can already pay off a € 5,000 loan with less than € 50 per month. This offer is for a term of 120 months. If you can not afford to spend more than this amount and a loan is inevitable, a long term will cost you extra interest every year, but the repayment will not overwhelm you in your funds.

Always consider before taking a loan:

Do you really need a loan or can not you save the amount? Changing consumer behavior can set target amounts that motivate you to save.

What is the purpose of the loan? If possible, avoid borrowing for a computer or vacation. Keep in mind that lending always affects your credit bureau score.

What rate can you afford? How much money you can dispense with in the long term as a “disposable income” for repayments? Remains in the month?

What is considered as disposable income

What is considered as disposable income

If a bank calculates your loan amount, it will cover a few aspects of your individual situation. Above all, it is in the banking interest that you can raise the monthly installments for repayment. A high income will not be of much use to you here, even if you are facing high monthly expenses. For credit terms, your free disposable monthly income must be high enough. This refers to the part of your net income that remains after deducting all regular living expenses. The sum of all your expenses will be deducted from the total income. As a precautionary measure, 10% of your fixed costs should still be added as a buffer for special expenses.

Many banks are self-evaluating by looking at their statements of account for the past three months in terms of spending and revenue. Consider your income, which includes regular income from sideline employment and investment income, such as money you receive as landlord. In addition, unemployment benefits are not considered as income, as this may not be used for loan repayment. How to calculate your free disposable income can be seen by way of example in the table below. This example should give you an impression. From bank to bank, various factors can be included in such a valuation to calculate the disposable income.



net pay

1,600 euros

Rental income (net)

400 euros


2,000 euros

Rental costs own apartment

650 euros

Fixed costs car (fuel, tax etc.)

140 euros

Total insurance costs

80 euro

Other contracts (cell phone, internet etc.)

50 Euros

Current rates of other loans

110 euros


250 euro

total expenditure

1,280 euros

Buffer over 10%

128 euros

Total expenditure including buffer

1,408 euros

Free disposable income

592 euros

Amount of the loan amount after disposable income

Amount of the loan amount after disposable income

The borrower comes here after deducting all charges on a freely disposable income in the amount of 592 euros per month. This amount results from average values ​​and may therefore differ slightly. As an example, this amount could be saved or invested in the repayment of a loan.

In the simple calculation example of our table you could count as a borrower with a personal loan in the range of a maximum of 20,000 euros with a 3-year term (36 months). On this 3 years repayment term, you would have to spend (without interest!) On monthly installments nearly 556 euros of your “free” 592 euros.

To get a first estimate of the maximum loan size in your case, do the following: calculate your disposable income per month and multiply that by the amount of time you can imagine. Then round off the result generously. For example, with 100 euros of disposable income, you will come to 3,600 euros over a 36-month period. Since interest costs are incurred during this time, you better than 3.400 € or less as a guideline for your credit. This bill is not binding as each lender will include slightly different parameters in their calculations.

If you choose a period longer than 36 months, the maximum possible amount of your loan increases with the length of the repayment period. However, the risk of default also increases, which means that you may not be able to meet the repayment installments for the loan. A middle ground that reduces your burden would be this: you take the maximum credit line for 3 years, but extend the repayment period. This automatically reduces the rates.

Do not choose too high a monthly repayment rate

Do not choose too high a monthly repayment rate

In our example we talked about the maximum height. This also requires a repayment of maximum high rates. If possible, always keep your distance down as the calculation includes making sure that you spend as much of your disposable income on the loan installments as possible.

You must keep in mind that your income may increase little or no during the term. In the worst case, such as through unemployment, sources of income break or diminish. The cost of living will certainly climb in the next 3 years, as well as a costly new purchase may be pending or you want to afford a holiday trip. There are also repayments, which you should not forget as a further cost factor. If you stay a little below the maximum credit, the burden of the agreed repayment is reduced. In this way you protect yourself from the outset against financial risks and the risk of potential debt somewhat better.

What conditions apply to a loan commitment

What conditions apply to a loan commitment

In addition to disposable income, it is also important for banks to consider the individual life circumstances of a borrower. A positive credit bureau score and a permanent job with a permanent contract of employment will make you a relatively risk-free candidate for a loan. In a direct comparison you score worse as a self-employed or with less positive credit bureau score. If you work as a freelancer, credit institutions will usually ask for your income tax assessment and demand a business evaluation before lending.

In addition to the desired height and the preferred maturity comes to a small role. While a three-year term is a relatively manageable time frame for the bank to get its money back, a repayment period of six years theoretically doubles the risk of you defaulting. In principle, however, a longer payment term suggests a larger credit line.

You are also a little cheaper by taking out a residual debt insurance, which will take you in case of an emergency and pay off the installments. This will make your loan project more expensive, but minimize the risk for the bank. Such a hedge, however, hardly makes sense for installment loans, but may be more for bigger loans than for real estate.

These credit options are available for (too) low income

These credit options are available for (too) low income

If you are interested in a loan, but you have only a low income, you have the following three options in principle: You will find a guarantor who, due to his creditworthiness, meets the bank’s requirements. Or you bring tangible assets as collateral for the credit performance of your bank. Lastly, you can choose the term so that you get to your goal, the loan, even at low rates.

A surety is a personal security in which the guarantor is held liable for you should you fail. The guarantor has the disadvantage that the guarantor will be held directly liable if you can no longer pay. On the other hand, in the case of a deficiency guarantee, the lender must first ensure that you have “no more to buy” before he approaches your guarantor with claims.

If you have valuables that you can transfer to the bank in the form of a “deposit,” your credit opportunities will rise even if your income is lower. The credit institution only needs a security that can make it cash if you can not repay any installments. Your guarantee should therefore be easy to dispose of and commensurate with the value of your credit line. For example, your car comes into question as well as a property, jewelry or a life insurance.

What you should also consider

What you should also consider

When making a loan offer, always make sure that you receive a fixed interest rate. Variable interest rates run the risk of rising when there are changes in the financial market. There is currently a low interest rate, which is why loans are also quite cheap. With a loan over, for example, 5 years, a variable interest rate is risky because it can hide a cost trap behind it. So interest rate lockup prevents you from paying unnecessarily high interest rates in the future on loans.

Avoid further hidden costs by reading the fine print. Interest should always be “pa” (per year / per year). If you read at a provider “pM”, please refrain. Here, interest is required per month, which can cost you unnecessarily much money. The legislator stipulates that effective interest rates are to be distinguished. That is, the interest, in the possible processing fees or other administrative costs are already included. This will allow you to calculate the total cost that you need to expect. Insist on quoting the “APR” and generally have everything handed out in writing before taking any further steps.

If you have found a few good offers, you should look at the conditions on the “free special repayment”. If that offers you a provider, that’s a plus for you. This allows you to additionally reduce your credit debt with certain special payments per year. In a nutshell: if you are at a debt of, for example, 12,000 euros and have saved 2,000 euros in an account, you offset this. Take the amount from the account and reduce with him the 12,000 to 10,000 euros debt in one fell swoop. So you will again have less interest on your remaining debts and you will move forward with your repayment faster.


If you think you are automatically getting high credit with a high salary, you are wrong. On the disposable income, the lender will calculate the realistic (maximum) amount of a loan. A frugal candidate is thus in a more promising position than a large earner who can hold his money badly together. In addition, the amount and duration of the loan, employment or credit bureau score play additional roles for the creditworthiness and thus also the amount of a possible loan.

The amount of the loan can be influenced by the borrower through collateral or a reasonably selected repayment model in his favor. For the latter, it is better to have a longer duration with higher costs, but to respect the proportionality. So if you have credit, then at least so that it does not lead to financial shortages or even ruin. Always keep in mind that the bank has you in hand and finds ways to get their money.