Credit for outstanding invoices: Secure liquidity and save costs
25 Apr 2025
8
Minutes
Katrin Straub
CEO at nextsure
An unexpected high bill can quickly lead to a liquidity bottleneck. However, ignoring the payment deadline often results in even higher costs due to default interest and reminder fees. A strategically deployed loan for settling outstanding invoices can be a smart solution here.
The topic in brief and concise terms
A loan for outstanding invoices can be cheaper than the total of reminder fees and statutory default interest, currently at 6.27 percent.
Paying invoices quickly via credit can yield cash discounts of two to three percent, which often exceed the interest costs.
Timely payments protect against negative Schufa entries and safeguard future creditworthiness.
Analysis of the Emergency: When a Loan for Bills Becomes Inevitable
A financial shortfall catches many people unexpectedly, making it impossible to pay bills on time. If a consumer defaults on payment, statutory default interest of five percentage points above the base rate can be imposed. With a current base rate of 1.27 percent (as of July 2025), this amounts to 6.27 percent interest per year. In addition, reminder fees are incurred, which may only cover the actual costs of the creditor but often amount to two to five euros per reminder. Taking out a loan to settle outstanding bills becomes a strategic decision when the loan costs are lower than the total of default interest and reminder fees. A quickly available loan can effectively shorten an expensive default period. This consideration not only protects against a growing debt spiral but also prevents negative entries with credit agencies.
Interest Costs versus Late Fees: A Clear Comparison
To make the right decision, a precise calculation of potential costs is helpful. Let's assume an outstanding bill of 2,000 euros that remains unpaid for three months. The default interest of 6.27 percent per year would incur costs of approximately 31.35 euros for this period. Additionally, fees of, for instance, 2.50 euros could be incurred for a second and third reminder, driving the total costs to over 36 euros. A small loan of 2,000 euros with a term of twelve months and an effective annual interest rate of four percent would only cost about 20 euros in interest over the same three-month period. In this scenario, taking out the loan directly saves 16 euros in default costs. The precise creation of a household budget helps realistically assess your financial capacity for a loan installment. This turns a reactive payment into a proactive financial decision.
The advantages of quick liquidity: Take advantage of cash discounts and protect your credit rating
A loan for paying outstanding invoices offers more than just avoiding penalty fees. Many companies offer a discount for quick payers, usually two to three percent for payments within seven to 14 days. For an invoice amount of 3,000 euros, a discount of two percent equates to a saving of 60 euros. If the interest expense for a short-term loan is less than this amount, a direct financial gain is achieved. Timely payment also strengthens your creditworthiness and avoids negative entries in the Schufa, which can complicate future financing. A loan with a free use purpose offers the necessary flexibility here. The benefits include:
Financial savings: Discount benefits often exceed the short-term interest costs of a loan.
Credit protection: Timely payments prevent negative entries with credit agencies like Schufa.
Negotiation base: Good payment practices improve relationships with suppliers and service providers.
Liquidity assurance: Short-term loans bridge gaps without tapping into long-term reserves.
This proactive approach turns a potential financial disadvantage into a strategic advantage.
Step by step to the right loan for your bills
The path to finding the right loan requires careful preparation to secure favourable terms. The basic requirements for an instalment loan in Germany are usually being of legal age, having a permanent residence, and a regular income. A clean Schufa report is also a central condition for most banks. Before submitting an application, you should follow these steps:
Take stock of your finances: Create a detailed overview of your monthly income and expenses to determine the maximum affordable instalment.
Define the loan amount: Determine the exact amount needed to settle all outstanding claims.
Compare offers: Obtain several loan offers and compare the effective annual interest rate, not just the nominal interest rate.
Prepare documents: Have proof of income for the last three months, your identification documents, and the bills to be paid ready.
Check the purpose: A debt consolidation loan can be useful if several liabilities are to be combined.
A well-prepared application increases the chance of a quick approval and helps regain financial control.
Expert Tips: Legal Basics and Design Options
When dealing with debts and loans, having basic legal knowledge is crucial. The statutory default interest rate is clearly regulated in § 288 of the German Civil Code (BGB). For consumers, it is five percentage points above the base rate, which provides a reliable basis for calculation. It is also important to note "Payment on principal debt" in the transfer, so the creditor does not apply the amount to the late fees first. Our expert tip: When it comes to recurring payments like rent or mobile contracts, thoroughly check the contract conditions, as there might be a delay without a separate reminder. Different rules often apply to the self-employed; here, the default interest rate can be nine percentage points above the base rate, and there are special loans for financing working capital. Knowing these details accurately enables one to make informed decisions and strengthen their financial position.
Long-term strategies to avoid cash flow shortages
A loan to settle invoices is a short-term solution, but it should prompt long-term financial planning. Building an emergency fund of three to six months' expenses is the most important measure to cushion future shortfalls. Consistent budget planning, where all income and expenses are recorded, uncovers savings potential. If there are already several liabilities, consolidating multiple loans into a single, more affordable rate can significantly reduce the monthly burden. Even optimising insurance contracts or switching providers can free up 50 euros or more per month. These measures create financial buffers and reduce the likelihood of having to rely on a loan to cover ongoing costs again. This way, you ensure your financial health is sustainable.
Request an individual risk analysis now: Have your insurance situation checked for free and receive specific optimisation proposals.
More useful links
Bundesverband Factoring für den Mittelstand e.V. provides data and facts about factoring.
Statista contains a survey on the factoring rate in Germany.
Statista offers an overview on the topic of factoring.
Bundesverband mittelständische Wirtschaft (BVMW) addresses the issue of liquidity in the context of medium-sized enterprises.
KfW includes publications on corporate financing.
Statistisches Bundesamt (Destatis) provides tables on business registrations and insolvencies in Germany.
Statistisches Bundesamt (Destatis) offers information on business registrations and insolvencies in Germany.
FAQ
What requirements must I meet for a credit to pay an invoice?
The key requirements are being of legal age, having a residence in Germany, a German bank account, and a regular, verifiable income. A positive credit check (e.g., through Schufa) is also crucial.
How quickly can a loan be disbursed?
For online loans with a digital application process, including video identification and digital signatures, payout can often occur within 24 to 48 hours.
Can I get a loan even with a negative credit rating?
Granting a loan with negative Schufa entries is challenging but not impossible. Some specialized providers offer loans, often at significantly higher interest rates or with additional collateral.
What is the difference between the nominal interest rate and the effective interest rate?
The nominal interest rate only indicates the pure cost of the borrowed money. In addition to this, the effective annual interest rate includes all other costs and fees associated with the loan (e.g. processing fees) and is therefore the crucial value for comparing loan offers.
Can I also use the loan for invoices as a self-employed person?
Yes, there are special loans for self-employed professionals and freelancers. Banks often require at least two to three years of business activity and a business evaluation report (BWA) instead of salary statements.
What happens if I can't pay an installment?
If you are unable to make a payment, contact your bank immediately. Many loan agreements offer the option of a free payment break once a year. Otherwise, default interest will be incurred, and there is a risk of a negative Schufa entry.
