The reasons for a loan can be many in essence you need money and soon. A personal loan can be a great help for someone in a difficult financial situation. But what if you are living abroad, in Austria? Is it even possible to get a loan?
Foreign nationals including EU and non-EU foreign employees, expats can get a loan in Austria. The requirements are to have a main residence in Austria and a source of income. Banks will prove the creditworthiness of the applicant.
Are you living in Austria and thinking about taking out a loan. You might have different reasons for doing so, whether it’s an unexpected event, the big purchase of financing of the studies – a loan can be a solution. Read in this article all about loans for foreigners in Austria and how to get one.
Can a Foreigner Get a Loan in Austria?
Foreign nationals, including non-EU and EU expats can get a loan in Austria. As a foreigner, you are able to apply for a loan for personal use, for business use, to buy a home, and to pay for college.
Moreover, mortgages are available for foreigners too. Banks don’t have a right to choose applicants based on nationality or to discriminate, yet they might offer different conditions to different people based on their residency and citizenship.
Nevertheless, banks in Austria are free to accept or not your loan application. Before offering you a loan, the lender will assess your creditworthiness. Based on the results they would either give you a loan or not.
In any case, when applying for a loan, you will be requested to disclose the income. That way bank will know if you are capable to repay the loan at all.
Furthermore, banks might be now willing to give a loan to someone who has only been in Austria for a short period of time, for example, a year or less.
Your country of origin, residence status in Austria, job, and income will influence how banks assess your application. Therefore, understanding your creditworthiness is crucial when applying for a loan.
The longer your credit history, the more information the lender has to determine whether you’re a responsible borrower.
It’s always a good idea to work on establishing a good credit history in the country you leave. Most likely you will want to apply for the mortgage one day too and there your credit score plays an even more important role.
At most credit institutions in Austria, EU citizens only need to have a residence in Austria to get a loan. Hence, residency is a condition of approving a loan or mortgage.
Nonetheless, credit history is country-specific, a credit score gained in one European country can’t be applied in another. Therefore, EU citizens also need good creditworthiness in Austria to get a loan.
To build up your credit score in Austria, you can open a local bank account, get debit and credit cards, and make sure you pay your bills on time.
The situation is different for non-EU nationals. Here, you must be able to present a residence permit and a work permit when applying for a loan in Austria.
The period of validity of the residence permit or work permit also plays a role.
Having a stable income is by far the most crucial factor for non-EU citizens when getting a loan in Germany. Likewise to Austrian nationals, foreigners must prove their income with wage slips or tax notices.
In general, the higher your salary and the longer the employment agreement, the higher your chances of getting a loan and getting a better interest rate.
Foreign citizens can also use the help of a guarantor. It can be their relatives or acquaintances for example. The guarantor should have a decent salary and no debts. He or she will pay your loan installments in case you no longer can cover it on your own.
EU citizens and PR holders have higher success rates in getting a loan or mortgage in Austria.
How to improve creditworthiness and credit score?
You can work towards a good credit score so in the future banks will give you a loan or a mortgage. Firstly open a bank account in Austria, get debit and credit cards, and pay all your bills on time.
Small loans and purchases with installments that are paid on time will strengthen your creditworthiness.
The process of getting a loan in Austria
To get a loan in Austria you firstly need to find it. Use online loan calculator Durchblicker. You will need to have a valid ID and address in Austria.
Secondly, a loan applicant must already have a bank account in the country.
Generally, foreign nationals can get a loan in Austria if they fall under the following criteria:
- Have a residency in Austria
- Have a current account with an Austrian bank
- Have a regular income
Your residence status has a large impact on how much you can borrow and for how long. The loan approval and conditions will also depend on your employment and income.
Overall, getting a loan as a foreigner is more difficult as it will be for an Austrian citizen. EU citizens have better chances than non-EU nationals. Banks simply don’t want to take a high risk.
Requirements for the loan
Standard requirements of traditional banks when applying for a loan in Austria are:
- You are older than 18 years
- You are taking a loan for yourself
- You have a residence in Austria
- You have a bank account based in Austria
- You have a positive credit score
- You have a regular income
Application for the loan
Most of the banks in Austria will allow you to apply for a loan online, but you can also do it traditionally, in the office. Here is an example of the loan application with Raiffensenbank.
Steps to follow:
- Select the desired loan amount and monthly installment
- Enter your personal data
- Your loan offer will be created based on the provided information
- Sign the loan contract
- The loan will be transferred to your bank account
Documents for the loan
To obtain a loan in Austria, you will need to submit the following documents to the bank:
- passport or ID
- proof of salary (for employees) or proof of company income (for business owners)
- savings account statements
Reasons for the loan refusal
It’s not a rare case when an application for a loan gets declined by the bank in Austria. The refusal criteria are usually kept confidential, but the typical reasons are:
- low income
- fixed-term job position
- permanent job for shorter than 1 year (usually)
- other debts, especially in not well established financial institutions
- previous loan refusals
Increase your chances of getting a loan
To increase your chances of getting a loan in Austria as a foreigner, be sure to only inquire for loans with a repayment period that lies fully within the duration of your residence permit.
If you are looking at getting a mortgage, your best chance is to wait until you hold a settlement permit (PR).
- Apply for a loan that has the maximum duration of your residence permit in Austria.
- Establish a good creditworthiness history.
- Provide income and financial proof – you can support yourself and are able to pay back the money.
- Try to apply for a smaller amount at online banks – they have fewer requirements and easier processes of granting a loan.
Moreover, getting a loan can be more difficult for young graduates with limited-time employment contracts and for self-employed consultants or business owners.
Personal Loans in Austria
Personal loans can be used for different reasons. Banks will usually ask about the purpose of the loan. Some common ones are:
- Purchase of vehicles, e.g., cars, boats, etc.
- Travel and vacation
- Consumer electronics and home appliances
- Health and beauty
- Education and training
- Debt coverage
Keep in mind that a personal loan or consumer credit has a higher interest rate and shorter payback time, than a mortgage.
The monthly installment for the loan should be a maximum of 40% of the family’s income.
As an alternative to taking a loan, you can apply for a credit card in Austria. The process is easier than getting a loan.
Student Loans in Austria
Every year, thousands of students come to study to Austria. Many of them struggle to finance their studies and living expenses. Hence, the question about student loans arises.
In Austria, different banks offer different loans. Student loans are paid monthly and have a lower interest rate than conventional loans.
Unfortunately, traditional student loans in Austria aren’t available for non-EU st citizens. EU students should contact loan associations. Education loans are generally more favorable than normal consumer loans, also have certain conditions.
You usually only have to pay small monthly installments during the studies. The monthly rate will increase after you complete the university.
Educational loans are granted regardless of the income and assets of the student. Interest rates are also very low.
In these banks you can apply for a student loan in Austria:
- Wüstenrot Bausparkasse
- Raiffeisen Bausparkasse
Nonetheless, as a non-EU citizen, you can try your chances by applying for a student loan on the loan comparison and calculator tool such as Durchblicker. It’s the biggest one in Austria.
Compare mortgages and loans in Austria
It’s advisable to compare offers from different lenders before making a decision on a loan.
Pay attention to these details when applying for a loan:
- The loan amount
- The duration of the loan
- Interest rate
- Total amount to be reimbursed
- Any costs to be paid, regularly or on a one-off basis
- The number, frequency, and size of the installments
- Conditions for early repayment and charges
You can compare all existing loans and mortgages in Austria on the comparison platform and calculator at the same time – Durchblicker. It’s the biggest website as such and help people to find loans, insurances, and even internet deals for more than 10 years.
On Durchblicker you can:
- and receive a loan in Austria
Durchblicker gives you an overview of loans from over 60 banks, many of them well-known in Austria. more than 20 leading credit banks, online lenders, and peer-to-peer lenders. For any help, you can reach out to one of 200 loan advisors.
On their website, you can find a favorable loan with the best conditions and ultimately save money. Every month around 350,000 comparisons are made on the Durchblicker.
There you can compare different types of loans including:
- The housing loan calculator – for buying, building, or renovating the house
- The car loan calculator – to buy a new or used car
- The consumer loan calculator – find an affordable way to finance furniture, a computer, a fancy vacation, or something else
Benefits of personal loan with Durchblicker:
- Zero additional or hidden costs
- Fast processing time
- The amount of the loan ranges depending on the purpose. You can apply for 1,000 EUR and up to 1,000,000 EUR.
- Interest rates for mortgages start with 0,25% and personal loans with 2,99%.
- Banks you can choose loans from Erste, BAWAG, Bank Austria, Volksbank, Sparkasse, Hypo, and others.
How does it work?
Firstly compare loans – select the loan amount, adjust the term and start the comparison.
Get loan offers – enter the key personal data about yourself and your financing requirements. After that, the individual loan offers will be calculated.
Apply for the loan – simply select the best offer to apply for the loan right on the platform.
Durchblicker is Austria’s largest loan comparison website, which is offering quick, easy, and affordable loans since 2011.
Interest Rate in Austria
The rates for a loan can vary between 2,99% to 14,99% for personal loan and from 0,25% to 6% for mortgages.
Interest rates for loans and mortgages in Austria are one of the lowest in Europe. Moreover, interest rates keep decreasing over the years as the Austrian economy gets stronger and stronger.
Loan interest rates are based on the contractually fixed which are agreed between banks. These rates have a major impact on the amount you pay every month in your installments.
This, therefore, affects how much you have to pay back to the bank each month for borrowed money. The amount of the loan interest depends on various factors.
Factors that influence an interest rate:
- Type of interest (variable or fixed)
- Amount of the loan
- Other interest rates
The amount depends on whether it’s a mortgage or a consumer loan. In the case of a consumer loan, the reason for taking a loan also plays a role.
The exact interest rate for the loan can be only estimated in the particular case, you can make a calculation here.
Best Banks for Loans in Austria
Raiffeisen Bank is headquartered in Vienna and is the biggest and well-known bank in Austria. It has 1,948 offices in Austria. hence, there is for sure at least one department in your town. Raiffeisen bank provides different types of loans, where a bonus loan is one of the easiest to get.
Advantages of a Raiffeisen Bonus Loan:
- Loan up to 30,000 EUR
- Payout within 48 hours
- Calculate online and receive an immediate decision
- Fixed interest rate over the entire term – up to 10 years
- You don’t need to provide any security deposits
Requirements for a Bonus Loan:
- Minimum age of 18 years
- Main residence in Austria for at least 6 months
- Proof of income for the last 3 months
- Minimum income 1,100 EUR
- Passport, ID, or driver’s license
Bank Austria is part of UniCredit. It’s the second largest bank in Austria. The bank has around 300 branches in the country.
WunschKredit or Wishcredit with Bank Austria:
- Loans from 3,000 EUR to 50,000 EUR
- Term: 1 – 7 years
- Effective annual interest rate from 3.10 % p.a.
- Debit interest from 3.00 % p.a.
- Early repayment possible
Requirements for a loan at Bank Austria:
- EU citizenship
- Minimum age of 18 years
- Main residence in Austria
- Salary or pension
- Good credit score
- Passport or ID
The last large and well-established bank in Austria is Erste Bank. Erste Bank, also known as Sparkasse, is one of the biggest banks in Austria and in the whole of Europe. It was founded in 1819 as the first Austrian savings bank, hence the oldest bank in the country.
You will find branches of Erste Bank in all Austrian cities, small and big.
Click-Credit with Erste Bank:
- Loans from 3,000 EUR to 50,000 EUR
- Flexible term up to 10 years
- Effective annual interest rate 5.7% p.a.
- Purpose of the loan isn’t required
- Payment within 24 hours
- Early repayment is possible and is free of charge
Requirements for Click-Credit:
- Minimum age 18 years
- Main residence in Austria
- Salary or pension
- Proof of income for the last 3 months
- Passport, ID, or driver’s license
- Webcam, smartphone, or internet banking
You can open a free bank account with Erste Bank. I am a client of them for 3 years and can only recommend it.
Alternative To the Loan: Get a Credit Card
Once you have moved to Austria, it may be worth getting a credit card to help build up your credit history. Some banks will accept your application with little or no credit history.
It’s important to stick to the credit limit and always pay at least the minimum payment every month so you don’t harm your credit score.
Highlights of DKB – Cash Visa Card:
- Free Austrian bank account and debit card
- Free Visa credit card
- Worldwide free cash withdrawal with Visa card at ATMs
- Enjoy maximal credit limit is 15,000 EUR
- Cash limit is 1,000 EUR
- Interest rate is 6,90%
- Online banking
- Open account online
- Free emergency card and emergency cash
- Up to 20% online cash-back
- International student card (ISIC) for worldwide discounts
You can also open a free bank account with DBK, where you can enjoy free cash withdrawal from any Visa ATM, even abroad. DKB also provides a free VISA credit card with free cash withdrawals worldwide.
As the name of the card says for itself – this credit card is free! The Gebührenfrei (Free) Mastercard Credit card Gold is the perfect credit card for Austria. It cost you nothing and at the same time comes with very useful features.
Highlights of Free Mastercard Gold Card:
- Mastercard credit card
- 25 EUR as starting credit
- No monthly or annual fees
- No fees for payments in foreign currency – worldwide free payments
- Free cash withdrawals worldwide
- Easy application process (no PostIdent required)
- Travel insurances included
- Free credit for up to 7 weeks (no interest rate applies)
- Flexible repayment possible
Customers can choose between several credit cards while having a bank account at Erste Bank (Sparkasse).
Highlights of Erste Bank Credit Cards:
- Wide range of Visa or Mastercard cards
- Debit plus credit card
- Free credit card in the first year
- Monthly fee for the bank account is just 2 EUR
- Free cash withdraws with debit card
- Open a checking account online in 10 min
- Choose between Mastercard or Visa
Hello bank is an Austrian online bank. They offer various financial services including standard banking accounts and several credit cards. In Austrian rankings, Hello bank achieved the quality rating “very good” with a score of 1.4 for terms and conditions (where 1 is the best).
Highlights of PayLife Classic Credit Card:
- Choose between Visa or Mastercard credit card
- Get 75 EUR in starting bonus
- Annual fee is EUR 22,20
- Monthly credit limit 2,200 EUR
- Free banking account
- Test card for free for 3 months!
- Debit card included
- Gold credit card is gratis for the first year
- Free cash withdrawals in the EURO area
- Free money transfers within the EU
- Only 6,75% p.a. interest on overdrafts
- Free cash deposits
Recommended products and services in Germany:
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- Best price & value sim card and best deal overall including high-speed internet
- Blocked bank account for students
- Best free bank account in Germany
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- Learn German on the best online platform
- Best free bank account in Austria
- Order translation of the documents online
- Check how much you can earn in Germany (for all professions)
- Free online consultation/assessment with German lawyers and tax advisors
- Compare providers and rates for various insurances, sim cards, internet, electricity, banking accounts, credits & loans, and more.
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