Consolidate Loans in GermanyOne cheaper loan instead of many
Several loans or an expensive overdraft? Loan consolidation (German: Umschuldung) turns them into a single payment, often at a lower rate. Compare Schufa-neutral and see in minutes what works for you.
Loan consolidation means you replace one or more existing loans with a single, cheaper loan. Instead of three payments to three places, you make one. And if the new rate is lower than the old, you save real money. It pays off most clearly when you are stuck in your overdraft: in 2026 overdraft rates (Dispo) average around 11.3% (BaFin/Verivox), while an installment loan cost roughly 8.13% on average in March 2026 (Deutsche Bundesbank). That gap is what you claw back. Below we explain when it is genuinely worth it, what paying off the old loan may cost, and how to go about it as a newcomer.
Tip for newcomers
Even without a long German credit history, consolidating is possible. Banks then look more closely at your income and residence permit. The comparison is Schufa-neutral, so it costs you nothing and no score points. New here? Start with our personal loan guide for foreigners.
Key takeaways
- Consolidation replaces expensive loans or an overdraft with one cheaper installment loan – many payments become one.
- It pays off most when you clear a costly Dispo (avg ~11.3%) or an old high-rate loan (installment-loan avg 8.13%, Bundesbank, March 2026).
- You may repay the old loan early at any time (§ 500 BGB); the early-repayment fee is capped at 1% of the balance (0.5% under twelve months left, § 502 BGB).
- A conditions request is Schufa-neutral; only the binding application is recorded.
- It is rarely worth it when the remaining term is under twelve months or the balance is below 1,000 euros (Finanztip).
What is loan consolidation?
When you consolidate, you take out a new loan and immediately pay off one or several old ones. Afterwards you hold a single debt, ideally at a lower effective annual rate. The classic case: an old installment loan from a higher-rate period, plus a credit-card balance, plus a permanently overdrawn current account. You roll all of it into one cheaper loan.
The usual candidates are a costly Dispo (overdraft), open credit-card debt, several parallel installment loans, and older car or online loans. According to the SCHUFA Kredit-Kompass 2025 (2024 data), about 19.6 million installment loans were running in Germany – many of them could be bundled more cheaply. If you are juggling several payments, consolidation brings order and can cut the total cost.
When is it worth consolidating?
Often worth it when …
- your account stays permanently in the overdraft
- your old loan is from a high-rate period
- you want to bundle several loans into one rate
- the remaining balance is above 1,000 euros
Probably not when …
- •the remaining term is under twelve months
- •the remaining balance is below 1,000 euros
- •your old rate is already very low
- •it is a mortgage with a fixed rate period
Example: paying off a 5,000 € overdraft
A simplified illustration based on average rates – your rate depends on your credit profile.
Overdraft balance
5,000 €
Overdraft rate (avg 2026)
≈ 11.3%
Interest in overdraft / year
≈ 565 €
Interest as installment loan (≈ 8.13%) / year
≈ 407 €
Possible saving per year: ≈ 158 €. Simplified, ignoring the repayment schedule and depending on your credit profile. We do not set rates – the bank gives your exact terms after a Schufa-neutral conditions request.
Compare a consolidation loan
Enter your amount and term and pick “debt consolidation” as the purpose. You will see matching offers right away – Schufa-neutral and non-binding.
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How consolidation works, step by step
- 1
Note the balance and old rate
Check your loan contract for the current balance and the effective annual rate. For an overdraft, your latest bank statement is enough.
- 2
Compare Schufa-neutral
Use the comparison and choose “debt consolidation”. The conditions request shows your personal rate without touching your score.
- 3
Check the early-repayment fee
If the new rate is clearly lower, the switch usually still pays even with the fee of at most 1% (§ 502 BGB).
- 4
Take the new loan, clear the old
Many banks send the payoff amount straight to your old lender. From then on you make one payment – usually cheaper and simpler.
What can paying off the old loan cost?
You may repay a consumer loan early at any time – that right is set out in § 500 (2) BGB. The bank may charge an early-repayment fee (Vorfälligkeitsentschädigung), but only within limits. Under § 502 BGB it is capped at 1% of the balance repaid early, dropping to 0.5% when the remaining term is under twelve months. For an overdraft this fee does not apply at all – you can clear a Dispo any time for free.
Payment-protection insurance: usually skip it
Banks often add a residual-debt insurance (Restschuldversicherung). Verbraucherzentrale and Finanztip are critical: the policies are frequently expensive with many exclusions. Since 2025 such a policy may only be agreed at least one week after the loan (§ 7a VVG). To protect your family, separate term-life or income-protection cover is usually the better deal.
Consolidation and your Schufa
Comparing is risk-free: a conditions request is Schufa-neutral. Only the binding application is recorded as a credit request and stays visible to other banks for about ten days. The new loan creates a fresh entry; once the old debts are cleared your total debt falls, which tends to help over time. As a newcomer, a steady income matters most.
Current rates around consolidation (2026)
These are market averages from public statistics, not offers from us. They help you judge whether your consolidation is worth it. Always compare the effective annual rate – only that includes all costs.
| Figure | Value | Source / date |
|---|---|---|
| Installment loan (new business, avg) | ≈ 8.13% p.a. | Deutsche Bundesbank, March 2026 |
| Overdraft rate (Dispo) | ≈ 11.3% p.a. | BaFin/Verivox, 2026 |
| Tolerated overdraft | ≈ 13% p.a. | BaFin/Verivox, 2026 |
| Early-repayment fee (max) | 1% of balance | § 502 BGB |
Important: these are market averages, not a personal offer. Your actual rate depends on your credit profile, term and amount, and is set only after a conditions request.
Frequently asked questions
What is loan consolidation (Umschuldung) in Germany?
When is it worth consolidating loans in Germany?
What does it cost to pay off the old loan early?
Does consolidating loans hurt my Schufa score?
Can I consolidate my overdraft (Dispo) in Germany?
Can I consolidate loans as a newcomer without a long Schufa history?
Sources and method
The rate figures are market averages from publicly available statistics as of 2026. They are not an offer from meinetarife24.de. This page is not individual financial advice.
- Deutsche Bundesbank – MFI interest statistics, consumer/installment loans (March 2026).
- BaFin / market data – average overdraft and tolerated-overdraft rates (2026).
- German Civil Code (BGB) – § 500 (early repayment) and § 502 (early-repayment fee).
- § 7a VVG – separation of consumer loan and residual-debt insurance (since 2025).
- Finanztip / Verbraucherzentrale – when consolidation is worth it; residual-debt insurance.
- SCHUFA Kredit-Kompass 2025 (2024 data) – number of running installment loans.
Last updated: June 2, 2026 · meinetarife24 Editorial Team · Advertising note: this page contains affiliate links to the Tarifcheck comparison tool. If a contract is concluded we receive a commission at no extra cost to you. Rates shown are set by the providers; we do not set rates.
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