Lending is fundamentally not dependent on age, but on the personal income situation. The only legal provision to be observed is that loans to minors may not be granted; this also applies to possible approval by the parents. In principle, young people can take out a loan when they reach the age of majority.
Regardless of the legal admissibility of lending, some banks are reluctant to approve a loan for young people. Negative entries at lenders can hardly have forfeited young borrowers, but an age of less than twenty-five years has an unfavorable effect on the score. In this way, the lender takes into account the statistically high probability of default on a loan for young people. In fact, young customers are inexperienced and many of them take on too many debts in the form of installments.
Young people and their training
Young people are often still in training and therefore have a low income. Nevertheless, many banks set up a credit line on their checking account as the first loan for young people, provided they have had their account for several years. The opening of a bank account does not require the account holder to be of legal age, especially since one is required to transfer the training allowance. Some credit card issuers also grant young customers a credit line of mostly one thousand euros without further examination.
If a required credit for young people is used to finance a course of study, you can apply for a student loan through the Kreditanstalt für Wiederaufbau, the repayment of which begins only after the final exam. Comparable loans are also granted for vocational training if the trainee cannot live with the parents during his apprenticeship.
Driving license, car and first own apartment
In addition to training, one of the most important reasons for a loan for young people is to move into their own homes for the first time. If you move out of your parents’ home after completing your apprenticeship, borrowing is easy because the young person has a sufficiently high income. Students, on the other hand, find it difficult to get a loan for their home furnishings because they cannot prove a regular income. In this case, the parent’s surety is required for borrowing by young people.
This is not necessary if the young person chooses to pay in installments in the furniture store instead of a bank loan. In this case, the young borrower makes sure that his monthly loan installments are not higher than he can bear. The number of credit installments can be reduced by extending the term.
Another option for reducing the loan amount is to buy inexpensive furniture. For a driver’s license, financing from a driving school is in many cases cheaper than a bank loan. A loan for young people can be successfully applied for on internet platforms for brokering loans between private individuals if the reason for the borrowing is clearly described.