Instant loan vs. advice – ban on advertising loans with immediate payout and without a detailed creditworthiness check in Germany

Since 1 January 2016, new rules applying to all German lenders have been in force and are intended to increase consumer protection. They concern, on the one hand, conventions for advertising consumer loans and, on the other, the introduction of a waiting period before the loan is paid out. Failing to follow these rules – for example by continuing to offer instant loans – is therefore incompatible with good loan advice.

New conventions on advertising consumer loans

Because it was previously unclear what exactly falls under the ban on aggressive advertising for consumer loans, the German consumer-finance association adopted new advertising conventions as a self-regulation measure to make the law more concrete. Thanks to these new rules the ban became somewhat clearer, but it is still not entirely obvious what is acceptable when advertising consumer loans and what violates the rules.

The new advertising conventions include a ban on advertising the arrangement of loans without a thorough credit check and despite a SCHUFA entry or open enforcement proceedings. This is intended to prevent consumers from getting the impression that consumer loans are available quickly and without a proper creditworthiness assessment.

With the same aim, offering instant loans was also prohibited. This preventive measure is additionally intended to stop false promises to consumers who might understand that the loan is granted with immediate payout. For this purpose it was laid down that terms such as “instant loan” should no longer be used in advertising for consumer loans. Also covered are expressions such as “express loan”, “same-day loan” and “loan with instant payout”, as well as wording that promises a credit check or payout within a short period, such as a few hours, or a loan without a thorough credit check – for example regardless of income.

Extended statutory waiting period after the loan agreement is signed

To protect consumers, the right of withdrawal was revised. Under the revision, a waiting period of 14 days from signing the contract now applies, but only to loans up to 80,000 €. Higher amounts are not covered by this consumer-credit rule and can therefore be paid out immediately after a correct creditworthiness check.

The reason for this waiting period is likewise consumer protection: during this period borrowers can still withdraw from the loan agreement in writing. This revision of the right of withdrawal is, however, somewhat contradictory, because although the waiting period after signing was extended, no period is prescribed for establishing creditworthiness, and a fast credit decision and contract signature remain acceptable.

Our recommendations for your loan

Because of these new rules it is important that you are not misled by false promises when looking for the right loan. You should also note that no fees may be charged to you for arranging the loan. Charging such fees is likewise prohibited for consumer protection, which is why loan brokerage must be free of charge. For this reason you should turn to a trustworthy provider such as Mutuo Gruppe.de, which complies with the new advertising conventions and the law.

At Mutuo Gruppe.de the credit decision is only made after a careful review so that the consumer is not exposed to the risk of over-indebtedness. The statutory waiting period of 14 days is observed and no processing fees are charged to customers. The best approach is to submit your loan application directly here.

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