Loan for outstanding invoices: secure liquidity and save costs
25.04.2025
8
Minutes
Katrin Straub
Managing Director at nextsure
An unexpected large bill can quickly lead to a cash flow shortfall. However, ignoring the payment deadline often causes even higher costs due to late interest and reminder fees. A loan used specifically to pay outstanding invoices can be a strategically smart solution here.
The topic in brief and concise terms
A loan for outstanding invoices can be cheaper than the sum of reminder fees and statutory default interest, currently 6.27 per cent.
By settling invoices quickly on credit, cash discount benefits of two to three per cent can be realised, which often exceeds the interest costs.
Timely payments protect against negative Schufa entries and safeguard your future creditworthiness.
Analysis of financial hardship: when a loan for bills becomes unavoidable
A financial shortfall catches many people by surprise and makes it impossible to pay invoices on time. If a consumer falls into arrears, statutory default interest of five percentage points above the base rate applies. At a current base rate of 1.27 per cent (as of July 2025), that adds up to 6.27 per cent interest per year. Reminder fees are also added; while these may only cover the creditor’s actual costs, they often amount to two to five euros per reminder. Taking out a loan to settle outstanding invoices becomes a strategic decision when the loan costs are lower than the sum of default interest and reminder fees. A quickly available loan can effectively shorten an expensive period of default. This trade-off not only protects against a growing debt spiral, but also prevents negative entries with credit reference agencies.
Interest costs versus late fees: A clear comparison
To make the right decision, a concrete calculation of the potential costs helps. Let’s assume an outstanding invoice of €2,000 that remains unpaid for three months. Default interest of 6.27 per cent per year would result in costs of around €31.35 for this period. In addition, fees of, for example, €2.50 could be charged for a second and third reminder, pushing the total costs to over €36. A small loan of €2,000 with a term of twelve months and an effective annual interest rate of four per cent would cost only around €20 in interest over the same three-month period. In this scenario, taking out the loan directly saves €16 in late-payment costs. A precise preparation of a household budget helps you realistically assess your own financial capacity for a loan instalment. So a reactive payment becomes a proactive financial decision.
The benefits of fast liquidity: take advantage of cash discounts and protect creditworthiness
A loan to pay outstanding invoices offers more than just avoiding penalty fees. Many companies offer a cash discount for prompt payers, usually two to three per cent for payment within seven to 14 days. For an invoice amount of 3,000 euros, a two per cent discount corresponds to a saving of 60 euros. If the interest cost for a short-term loan is below this amount, this creates a direct financial gain. Timely payment also strengthens your credit rating and avoids negative Schufa entries that make future financing more difficult. A loan for any purpose offers the necessary flexibility here. The advantages include:
Financial savings: Cash discount benefits often exceed the short-term interest costs of a loan.
Creditworthiness protection: Timely payments prevent negative entries with credit agencies such as Schufa.
Negotiating leverage: Good payment behaviour improves relationships with suppliers and service providers.
Liquidity protection: Short-term loans bridge cash flow gaps without drawing on long-term reserves.
This proactive approach turns a potential financial disadvantage into a strategic advantage.
Step by step to the right loan for your invoices
The path to the right loan requires careful preparation in order to secure favourable conditions. The basic requirements for an instalment loan in Germany are usually being of legal age, a fixed place of residence and a regular income. A clean SCHUFA report is also a key requirement for most banks. Before you submit an application, you should go through the following steps:
Take stock: Create a detailed overview of your monthly income and expenses to determine the maximum affordable instalment.
Define the loan amount: Specify the exact amount needed to settle all outstanding claims.
Compare offers: Obtain several loan offers and compare the annual percentage rate, not just the nominal interest rate.
Prepare documents: Have proof of income for the last three months, your identity documents and the invoices to be paid ready.
Check the purpose of the loan: A debt consolidation loan can be useful if several liabilities are to be bundled together.
A well-prepared application increases the chance of a quick approval and helps you regain financial control.
Expert tips: legal basics and design options
When dealing with debts and loans, basic legal knowledge is crucial. The statutory default interest rate is clearly regulated in Section 288 of the German Civil Code (BGB). For consumers, it is five percentage points above the base rate, which creates a reliable basis for calculation. It is also important to include the note “Payment towards the principal debt” when making a bank transfer, so that the creditor does not first apply the amount to reminder fees. Our expert tip: When making recurring payments such as rent or mobile phone contracts, check the contractual terms carefully, as default often occurs here without a separate reminder. Different rules often apply to self-employed people; here, the default interest rate may be nine percentage points above the base rate, and there are special loans for financing working capital. A precise understanding of these details makes it possible to make well-informed decisions and strengthen your own financial position.
Long-term strategies to avoid cash flow shortages
A loan to pay bills is a short-term solution, but it should prompt long-term financial planning. Building up an emergency fund equivalent to three to six months’ expenses is the most important measure to cushion future shortfalls. Consistent budgeting, in which all income and expenditure are recorded, reveals potential savings. If you already have several liabilities, consolidating multiple loans into a single, cheaper instalment can significantly reduce your monthly burden. Even optimising insurance policies or switching providers can free up €50 or more each month. These measures create financial buffers and reduce the likelihood of having to rely on a loan again to cover ongoing expenses. This is how you sustainably secure your financial health.
Request an individual risk analysis now: Have your insurance situation checked free of charge and receive specific recommendations for improvement.
More useful links
Federal Association for Factoring in Small and Medium-Sized Businesses (e.V.) provides data and facts on factoring.
Statista contains a survey on the factoring ratio in Germany.
Statista offers a thematic overview of factoring.
Federal Association of Small and Medium-Sized Businesses (BVMW) addresses the issue of liquidity in the context of SMEs.
KfW contains publications on corporate finance.
Federal Statistical Office (Destatis) offers tables on business registrations and insolvencies in Germany.
Federal Statistical Office (Destatis) offers information on business registrations and insolvencies in Germany.
FAQ
What requirements do I need to meet for a loan to pay invoices?
The key requirements are being of legal age, having a place of residence in Germany, a German bank account and a regular, verifiable income. A positive credit check (e.g. by Schufa) is also essential.
How quickly can a loan be disbursed?
With online loans with a digital application process, including video identification and digital signature, disbursement can often take place within 24 to 48 hours.
Can I also get a loan with a negative Schufa?
Lending with negative Schufa entries is difficult, but not impossible. Some specialised providers grant loans, often however at significantly higher interest rates or against additional collateral.
What is the difference between the nominal interest rate and the effective interest rate?
The nominal interest rate (or nominal rate) indicates only the pure cost of the borrowed money. The effective annual interest rate also includes all other costs and fees of the loan (e.g. processing fees) and is therefore the decisive figure for comparing loan offers.
Can I also use the loan to pay invoices as a self-employed person?
Yes, there are special loans for the self-employed and freelancers. Banks often require at least two to three years of business activity and management accounts (BWA) instead of payslips.
What happens if I can’t pay an instalment?
If you are unable to pay an instalment, contact your bank immediately. Many loan agreements offer the option of one free payment break per year. Otherwise, default interest will be charged and you risk a negative Schufa entry.
