Getting a loan can sometimes be daunting; in most cases, one has specific ambitions or needs that cannot be avoided and not the financial means to fulfil that need or ambition. It takes so many hops to reach this decision; trust me, I have been there. How will I pay back, will paying the monthly instalments to affect my other running expenses? How much is the bank charging me on top of the amount I took? Why is the bank asking so many questions? Why do I have to tell them everything about my financial condition? I wonder if I can ask my parents; maybe they can lend me some money, and I won’t have to worry about all this extra payback. I remember questioning whether I even needed to fulfil this ambition. Well, I thought I could at least make certain parts of the decision easier for you by giving you a comprehensive rundown of what types of loan options are available for Greek residents; each option comes with caveats and what the requirements are for getting each type of loan.
Can Foreigners Get A Loan In Greece?
Greece is probably one of the most exciting destinations in the world, such lovely cities with an abundance of historical monuments, beautiful beaches, amazing food scene, nightlife and whatnot. People come here and want to live just here. Greece is coming out of its financial crises slowly by sturdily. Thousands of people come to Greece and make this fantastic country their home. When one calls a place their home, it goes on to make all significant decisions about building one’s life there. There can be many ambitious decisions like starting a business, setting up an eatery that offers the cuisine of your first home country, building a house, or sending kids to a university that may require more money than you have in your bank account. So the question is, not being a citizen/Greek, do the local banks even consider you for loans?
Yes, if you are not a Greek citizen, you do not need to worry about getting a loan. Greece is an amiable country. All you have to do is to provide some proofs or authentications to the bank, and then you are all set to go. Some of the basic requirements for getting a loan are:
- Should be 25 years of age but less than 58
- Have a bank account in any greek bank
- Should have greek tax number or AFM
- Copy of passport and proof of income
Types Of Loans In Greece
Once you have decided that you want one, the next step is to determine how much and what type of loan would best suit your needs. There can be situations when you can get more than one type of loan, and when looking at a high level, look relevant for your scenario. I remember being stuck thinking about whether I should get a car loan to buy the car I love or not get my car in the bank’s ownership and get a personal loan instead of buying the car in my own name. There can be so many other scenarios when two kinds of loans seem relevant to your needs. Let us go over each type of loan available in Greece, and I am sure that will help you take a better, at least more informed decision.
There are multiple types of loans in Greece that you can apply for. Some most commonly used are:
Banks do provide instant personal loans to their customers for small needs. These are mostly quick to get approved and quick to be disbursed. The interest rate varies depending on the amount of the loan. Some banks in Greece directly credit the amount into your account. As the loan amount is not huge, you do not require any collateral backing.
Car loans are secured loans that you can get on excellent terms at competitive interest rates. These are mainly at a very competitive rate, which benefits customers like us.
With a student loan, you can fund your studies, knowledge enhancement and skills development. The interest rate is usually low for the first few months with long-term repayment plans. Later on, the terms are flexible. This is structured to give you the leverage of only having pay higher when you have a decent job after you finish your studies.
Mortgage loans are long-term collateral loans with fixed or floating interest rates. If you want to repair, rebuild or buy a new house, then you can apply for mortgage loans. The most significant benefit is that some banks are even offering no penalty over early repayments.
Debt Consolidation Loans
If you are stuck with so many debts or loans, this debt consolidation loan can help you pay many smaller loans. Ultimately you have to pay one loan with new terms and interest rates.
How To Get A Loan In Greece?
Getting a loan in Greece is not at all problematic. If you are interested in any consumer loan, then you can get it after going through the necessary processes. But you may have to go through some detailed processes for mortgage and debt repayment loans. The minimum loan amount is relatively less, just 10,000 euros in Greece.
Let’s take a look at the possibilities depending on the type of loan you are looking for.
Consumer Loan & Car Loan
In Greece, banking is one of the largest sectors of the economy. During the great financial crisis in 2008, there was a downfall in this sector that continued till 2016. Now banks have adopted such strategies that are more favourable towards investment and borrowing. You can even get an immediate personal loan of 6,000 euros without documentation. Green consumer loans are available for consumers to buy green appliances or green transport. It offers lower interest rates with quick financial processes. Green consumer loans are also for green repairs or upgrades. Other than that, many banks are providing loans on good and easy terms. If your credit rating is good, you don’t need to worry about getting a loan. Timely repayment also offers a discount to the customers along with a flexible or floating interest rate that you choose. While comparing interest rates of different banks or leasing companies, you should see the annual interest rate to make a good comparison.
If you are a student and need a bank loan to get a university or postgraduate degree or for knowledge enhancement, you can quickly get the loan. Along with long repayment terms, student loans offer lower monthly instalments for the initial months. Some financial houses even lend money without asking for supporting study-related documents. So if you want to learn a foreign language or attend a seminar, you can get a loan from as low as 1500 euros to as high as 40,000 euros.
Throughout the world, very few people can get houses without getting a mortgage. Similarly, in Greece, most people rely on mortgages for home repairs, buying property or building a house.
The very interesting thing is that they are even open to giving mortgages to non-residents of Greece with the option of paying in instalments and repaying your loan in full without any penalty. If you are a citizen of Greece, the duration of repayment is more than for non-residents. If you own property, you can still have it for investment purposes, as it’s never a bad bet to invest in real estate.
If you are a businessman and want to expand your business property or want to increase your equipment, you do not need to worry about your finances. Many banks and financial institutions are there to help you out. A commercial mortgage is available for your business. The process and amount of funding are finalised after a detailed assessment of your business.
Then comes the repayment plan, either monthly or quarterly, which is also decided with the consent of both parties. Repayment duration varies from 5 years to 20 years. In some cases, the grace period is also given to the borrower.
Another alternative to bank loans is crowdfunding loans. Instead of getting loans from the bank, you get loans from private individuals. Obviously less documentation but a higher interest rate. Some of the main advantages are:
Usually faster with less documentation and processing
Great for the people who have fewer chances of getting a bank loan
Loans for people with lower credit ratings
5 Tips For Getting A Good Loan In Greece
To summarise, we can give you five tips for getting a loan in Greece.
Greek Tax Number
If you do not have a bank account, you must open one. After getting the Greek tax number of AFM, you are all set to get a bank loan.
The second most important thing is to get the right consumer loan type. If you are a student and want it for some degree or knowledge enhancement, then a student loan is best for you. For some personal use, we Greek banks do offer personal loans with much less documentation.
Either you want to upgrade your equipment or want to refurbish your business property. Commercial loans are there to help you out.
Careful Selection Of Loan Amount
Be careful and realistic in understanding your income and repayment schedules—no need to be over-aggressive about your payment plans, as you never know about your unplanned spending. Take the right amount of loan that you think can be easily repayable with any debt reconciliation.
Compare Different Bank Loans
Different banks do offer similar services, so this is always advisable to carefully observe the banking market before applying for any loan. You have to carefully select the bank with better terms and an annual interest rate with suitable repayment plans.
Whether you are a Greek citizen, you are here for some work reason, or maybe a tourist, being a foreigner does not hinder you from getting a loan. Greece gives special importance to foreign travellers as tourism is one of the most important economic industries. Despite international economic shock due to the recent pandemic, the Greek economy focuses more on lenient loan policies.
The information that we have provided here is not advised by professional financial consultants, so carefully make a decision regarding the amount of loan that you want to borrow. Be watchful to make comparisons between different financial institutions providing loans. After observing their annual interest rate along with the repayment schedule, critically evaluate your financial situation and the possibility of paying back debt before signing any official contract. We wish you all the best with your life plans in Greece!