Credit for the deposit of your first own apartment: Your path to financial freedom upon moving in
18 Jul 2025
5
Minutes
Katrin Straub
CEO at nextsure
The dream of your first own apartment is within reach, but the deposit of up to three months' rent is beyond your budget? This is a challenge faced by many young people and students. A loan for the deposit can be the solution here to ease the financial pressure and make the move possible.
The topic in brief and concise terms
A loan for the rental deposit allows you to manage the high initial investment of up to three months' rent without dipping into your savings.
The legal basis (§ 551 BGB) limits the deposit to three net cold rents and assures tenants the right to installment payments and interest.
Alternatives like the rental deposit guarantee are flexible, but can end up being more expensive in the long term due to annual fees compared to a one-off installment loan.
Understanding the rental deposit as the first financial hurdle
The rental deposit is a security measure for the landlord, with its amount legally capped at a maximum of three months' basic rent. For example, with a basic rent of 700 euros, the deposit can be up to 2,100 euros. Although the law allows tenants to pay the deposit in three equal monthly instalments, even this partial payment is a burden for many. Many new tenants underestimate this financial effort, which arises in addition to moving costs and initial furnishings. However, a missing deposit should not be an obstacle to the dream home, as there are flexible financing solutions available. The specific regulations regarding the deposit can be found in the German Civil Code (Bürgerliches Gesetzbuch, BGB) under § 551. This paragraph not only sets the upper limit but also stipulates that the landlord must invest the money separately from their assets and with interest. Knowing these legal foundations is the first step towards securely planning one's finances around moving in.
How the security deposit loan works
A loan for the deposit is typically a classic installment loan with no restrictions on its use. This means you receive the requested amount directly in your account and can transfer it to the landlord. Repayment is made in fixed monthly installments over an agreed term. The key requirements for approval are being of legal age, having a residence in Germany, and sufficient creditworthiness, usually assessed through a SCHUFA check. A regular income is also crucial, with some banks requiring a minimum employment period of six months. The key advantage is that you can use your savings for other important purchases like furniture or a new kitchen. Such a loan with no specified use offers maximum flexibility. Interest costs are an important factor to calculate. For a deposit amount of 2,400 euros with an effective annual interest rate of five percent over twelve months, the total loan costs amount to about 64 euros. A careful household budget calculation before applying for the loan helps to realistically assess the monthly burden. Thus, the loan represents a planable and often cheaper alternative to using an expensive overdraft.
Explore alternatives to a deposit loan
In addition to a direct loan, there are other ways to provide the rental deposit without having to pay a large amount upfront. A popular option is the rental deposit guarantee, often also referred to as rental deposit insurance. In this case, an insurance company or bank acts as a guarantor for you to the landlord. You pay an annual fee, which is a percentage of the deposit amount – often between four and five percent. For a deposit of 2,000 euros, this would amount to 80 to 100 euros per year. This solution is mainly intended as a temporary measure, as the fees can exceed the cost of a loan over time. The landlord must agree to this form of security. Here is an overview of the most common alternatives:
Rental deposit guarantee: An insurer acts as your guarantor. You pay an annual fee, but not the deposit sum. Ideal for short-term financial constraints. You can find more information under Rental deposit insurance.
Bank guarantee: Similar to insurance, only here a bank acts as guarantor. Often, the conditions are stricter and linked to having an account with the bank.
Private loan: Borrowing money from family or friends can be interest-free, but it carries the potential for personal conflicts. A written contract is essential here.
Investment-backed securities account: You can also pledge a securities account to the landlord. This offers opportunities for returns, but also risks with market fluctuations.
Each of these options has specific advantages and disadvantages that must be weighed against your own financial situation and the rental duration.
Expert knowledge: Legal details and clever design
Those who delve deeper into the subject encounter important legal nuances. According to § 551 BGB, as a tenant, you are entitled to the interest generated from the deposit amount, which enhances security. The landlord must settle and return the deposit after the end of the tenancy. Generally, they have an examination period of three to six months. Only for outstanding claims, such as pending utility bills, can they retain an appropriate portion for longer, but no more than twelve months. Our expert tip: Insist on a detailed report during the handover of the flat, documenting the condition of the property. This minimizes later disputes over alleged damages and speeds up the return of the deposit. If you take out a loan, pay attention to flexible terms. A free option for special repayments is invaluable. Once you receive the deposit back from the landlord, you can repay the loan early, saving on interest costs. This is especially relevant for students, who often rent for only a few years and already face financial pressure with a student loan for living expenses.
From the deposit to complete moving financing
< p>The deposit is only part of the overall financial burden of moving house. Often, there are additional costs such as brokerage fees, van rental, and expenses for new furnishings. A flexible installment loan can be planned to cover not only the deposit but also these additional items. A loan for deposit and brokerage fees consolidates the financing and provides clarity with just one monthly payment. If, for example, you need a new kitchen, this can be planned directly. A comparison for kitchen financing shows that consolidated loans often offer better terms than several small loans. Plan realistically from the outset and list all expected costs. This way, you can determine the exact loan amount and avoid expensive refinancing. Even minor renovation work in the new flat can be financed this way, increasing both value and comfort right from the start. A budget-friendly renovation loan is the suitable solution for this. By opting for a longer term, you can keep monthly payments low and preserve your liquidity, which is particularly advantageous with a long-term loan. Consider the furnishings too, as a furniture loan with no deposit can further ease the start. Request an individual risk analysis now: Have your insurance situation checked for free and receive concrete optimization suggestions.
More useful links
Wikipedia offers comprehensive information on rental security (deposit).
The Federal Statistical Office provides up-to-date statistics on housing.
The Consumer Advice Centre provides information on important aspects of the rental agreement, especially when moving out.
The German Tenants' Association offers insights into recent Federal Court of Justice rulings concerning the rental deposit.
The Federal Employment Agency provides information on housing regulations in the context of citizens' allowance.
The Deutsche Bundesbank provides an indicator system for the residential real estate market.
The Federal Ministry for the Environment provides information about the Consumer Credit Directive.
The KfW offers information on funding programs for home ownership.
FAQ
What documents do I need for a deposit loan?
As a rule, you will need a valid ID card, recent payslips from the last two to three months, your bank statements, and the rental agreement as proof of the deposit amount. The exact requirements may vary depending on the bank.
Can I get a deposit loan even with a fixed-term employment contract?
Yes, that is possible. Many banks grant loans even with fixed-term employment contracts, provided the loan term ends within the fixed-term period. A positive credit check is also a requirement here.
Can I repay the loan early if I receive the deposit from the landlord?
Yes, for most installment loans, special repayments or a full early repayment are possible. When signing the contract, ensure that these options are free of charge to save interest once you receive the deposit back.
What happens to the loan if the landlord retains a part of the deposit?
The loan agreement continues regardless of the landlord's behaviour. You must continue paying the monthly instalments. If the landlord's withheld amount is justified, you must balance it out from your own funds.
Is a loan for the deposit SCHUFA-relevant?
Yes. The credit request is noted with SCHUFA, and the approved credit is recorded there. Timely repayment can have a positive impact on your SCHUFA score, while payment delays can affect it negatively.
Can I also use the loan for additional moving expenses?
Yes, an instalment loan for the deposit is often issued as a loan with no specific purpose. Therefore, you can also use the loan amount for renovations, furniture, or the estate agent's fee if you set the amount accordingly higher.
