Instalment loans in Germany cost between 5 and 12 percent in 2026 depending on credit score and provider. What matters in the comparison, why payment protection insurance is almost always too expensive and when a loan makes sense at all.
In short
- Only the annual percentage rate counts, and only the rate you get after the credit check, not the advertised “from” rate.
- Shorter term, less interest: €10,000 over 36 months costs around €1,100 at 7 percent, over 84 months €2,700.
- Payment protection insurance inflates the loan by up to 30 percent; almost always decline it.
- Use a conditions enquiry rather than a credit enquiry at Schufa, otherwise your score drops.
When a loan makes sense
For things that last longer than the instalments and that you really need: a car for the commute, an education, a property, replacing a dearer loan. Not for holidays, consumption, weddings or topping up an overdraft you then max out again. Whoever pays interest for consumption spends less next year than this year and still runs behind.
The annual percentage rate
The nominal rate is the pure interest; the APR includes processing fees and payment schedule. Only the APR is comparable. Beware “from 3.9 percent”: that is the rate for the best credit score that two thirds of customers do not get. The representative example rate banks must state is the rate that two thirds of customers actually receive. In 2026 it sits between 6 and 9 percent for instalment loans.
Term
The instalment shrinks with the term, the total interest grows. €10,000 at 7 percent costs €309 a month and €1,115 of interest over 36 months, €151 a month and €2,680 of interest over 84 months. Choose the shortest term whose instalment you can carry safely and look for free extra repayments. Since 2010 every instalment loan may be repaid in full at any time; the prepayment penalty is capped at one percent of the remaining debt.
Payment protection insurance
It is meant to cover the instalments on death, incapacity or unemployment. The premium is often co-financed, does not appear in the APR and can inflate the loan by 20 to 30 percent. The benefits are narrow: waiting periods, exclusions, deferral periods. Whoever wants to protect their income does so with occupational disability insurance and term life insurance, not a loan add-on. The bank may not make the loan conditional on the insurance; if it does, the premium belongs in the APR.
Schufa and credit score
Use the conditions enquiry when comparing, which Schufa does not store. A credit enquiry stays visible for a year and lowers the score if several follow. Check your free Schufa report under Article 15 GDPR for errors beforehand; every third record contains some. A second borrower with income improves the rate noticeably.
Alternatives
A revolving credit line is cheaper than the overdraft, a dedicated car loan with the registration document as security one to two points cheaper than an unsecured loan, a modernisation loan with the land register as security sits at mortgage rates. Dealer financing at zero percent is usually a hidden waiver of discount: whoever pays cash often gets the rebate that exceeds the interest.
Try it yourself
Loan CalculatorLoan amount, rate, term: monthly instalment, total interest and repayment schedule, also for refinancing.Frequently asked questions
How high may the instalment be?
All loan instalments together should not exceed 20 percent of net income, with a mortgage 35 percent including utilities.
Can I withdraw from a loan?
Yes, 14 days after signing without giving reasons. With a faulty withdrawal notice even later.
What is a good rate in 2026?
For good credit scores 5 to 6.5 percent APR, for medium ones 7 to 9. Anything above 10 percent is expensive and usually the result of a weak score or payment protection insurance.
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