Credit for garden house and landscaping: Easily achieve your dream garden in 4 steps
16 Jul 2025
11
Minutes
Katrin Straub
CEO at nextsure
An idyllic garden house and professional landscaping can incur costs of over €15,000. However, the path to financing doesn't have to be difficult. Discover how you can easily secure a loan for your garden house and landscaping project and make your plans a reality in no time.
The topic in brief and concise terms
A personal loan for unrestricted use is ideal for garden projects, as it is flexible and available without an expensive land registry entry.
Calculate total costs realistically, including a 10-15 percent buffer, as landscaping alone can cost between 40 to 100 euros per square meter.
Make sure to check the local building regulations, as the size of garden sheds that do not require a permit varies greatly depending on the federal state (e.g., 75 m³ in Bavaria vs. 10 m² in Berlin).
Choosing the Right Loan: Flexibility Without Land Registry Entry
For financing your garden project, a standard installment loan is usually the best choice. Unlike a dedicated modernization loan, which is often tied to the property, you do not need a land registry entry here. This not only saves notary fees amounting to several hundred euros but also significantly speeds up the entire process. You can freely use the loan amount, which often ranges between €3,000 and €80,000, for all aspects of your project – from the garden house itself to the new plants. Payout is made by many digital providers within 48 hours of approval. Such a loan with unrestricted use gives you maximum control over your budget. The legal basis for such loans is the loan agreement under Section 488 of the German Civil Code (BGB), which creates clear rules for both parties. This flexibility is crucial to be able to respond to unforeseen costs during the construction phase.
Calculate costs realistically: What your garden really costs
Accurate budget planning is the key to success when taking out a loan for a garden house and landscaping. The costs for basic garden design by a professional company range from 40 to 100 euros per square metre. For a 200 square metre garden, these costs quickly add up to 8,000 to 20,000 euros. In addition, there are the costs for the garden house itself, which can vary between 2,000 and 15,000 euros depending on the model and features. Always plan for a buffer of at least ten percent for unforeseen expenses. A detailed budget calculation for the loan application helps you to check your financial resilience. Consider the following items:
Garden house kit: from 2,000 euros
Foundation (e.g. concrete slab): 500 – 2,500 euros
Landscaping (paving, lawns, beds): 40 – 100 euros per sqm
Plants and trees: 500 – 3,000 euros
Irrigation system: 300 – 600 euros
Fence or privacy screen: 50 – 150 euros per metre
Possible architect or planning costs: up to 1,500 euros
This detailed breakdown is the basis for your loan application and prevents the need for subsequent refinancing.
Check requirements: Pave the way for a quick approval
To obtain a loan smoothly, three key conditions must be met. Firstly, you must be of legal age and provide proof of permanent residence in Germany. Secondly, banks require a regular, permanent income that often exceeds a minimum amount of 600 euros per month. Thirdly, a positive credit check, usually via a SCHUFA query, is crucial for approval and determining the interest rate. A good SCHUFA score over 95 percent significantly increases your chances of getting top conditions. Our expert tip: Obtain a free credit report once a year to correct any incorrect entries. For the digital application process, you typically need just three documents: a valid identification card, the last two payslips, and your bank statements from the last three months. A loan with a long term can reduce the monthly burden but leads to higher overall costs. The review of these documents and identification via Video-Ident often takes only a few minutes.
Legal Pitfalls: The Building Permit for Your Garden Shed
Before the first sod is turned, checking local building regulations is essential. Whether you need a building permit for your garden house depends on the building codes of your federal state. In Bavaria, for example, garden houses with a volume of up to 75 cubic metres indoors are exempt from approval, while in Berlin the limit is just ten square metres of floor space. Building without the necessary permit can result in fines of up to 50,000 euros and a demolition order. Therefore, always check in advance with the relevant building authority in your municipality. The following factors are crucial:
Size of the garden house (volume in m³ or floor area in m²)
Location (inside or outside a development plan)
Usage (a house with a toilet or a fireplace almost always requires approval)
Boundary distance to the neighbouring property (typically three metres)
A loan for an allotment garden is often subject to the simplified rules of the Federal Allotment Garden Act, where sheds up to 24 square metres are usually exempt from approval. Clarifying these points protects you from expensive surprises.
Understanding contract details: Optimize interest rates, special repayments, and terms
If you have received a loan approval, carefully review the contract details. The annual percentage rate is the key figure, as it includes all costs of the loan and facilitates a true comparison between offers. Pay attention to the possibility of free special repayments. Many banks allow you to repay up to 50 per cent of the outstanding balance or even the entire amount once a year without additional costs. This can reduce interest costs over the term by several hundred euros. The early repayment of the entire loan is also regulated by law: the bank may demand a maximum of one per cent of the outstanding balance as prepayment penalty. A comparison of different loan terms reveals the compromise between low monthly payments and minimal total costs, similar to a carport financing. A well-negotiated contract provides the necessary financial security for your project.
Request an individual risk analysis now: Have your insurance situation reviewed free of charge and receive concrete optimisation suggestions.
More useful links
Wikipedia provides a comprehensive article about garden houses, explaining definitions, uses, and construction methods.
The Federal Environment Agency provides information about natural gardens and their importance for the environment.
The KfW presents support programmes for private individuals that can assist in financing building and modernisation projects.
Gesetze im Internet offers the full text of Section 29 of the Building Code (BauGB), which contains regulations for building projects in outdoor areas.
The German Allotment Gardeners' Association provides information about the allotment garden system in Germany and the associated regulations.
FAQ
Can I also use the loan for the garden house for furniture and plants?
Yes, a personal loan is not tied to a specific purpose. You can flexibly use the entire amount for the garden shed, landscaping, new garden furniture, plants, or even tools.
How quickly is a garden loan disbursed?
After you have submitted the application digitally and identified yourself via video identification, most online banks disburse the payment within 24 to 72 hours.
What documents do I need for the loan application?
You will usually need a valid ID card or passport, your last two to three salary slips, and the corresponding bank statements.
What happens if I build my garden shed without the necessary building permit?
Building without the necessary permit is an offence. The authorities can impose a fine of up to €50,000 and, in the worst case, order the demolition of the garden house.
Can I repay the loan early?
Yes, that is possible at any time. Please look at the contract for the conditions regarding free special repayments. For a complete early repayment, the bank is legally allowed to charge a maximum of one percent of the outstanding debt as compensation.
Does a second borrower improve the chances?
Yes, a second borrower with their own income and good creditworthiness significantly increases the loan security for the bank. This often leads to a quicker approval and better interest rates.
