Loan for garden sheds and landscaping: Easily to your dream garden in 4 steps
16.07.2025
8
Minutes
Katrin Straub
Managing Director at nextsure
An idyllic garden house and professional landscaping can cost more than €15,000. But securing finance need not be an uphill struggle. Find out how to take out a loan for a garden house and landscaping easily and make your project 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 per cent buffer, as landscaping alone can cost 40 to 100 euros per square metre.
Be sure to check the local state building regulations, as the size of garden sheds that do not require planning permission varies greatly from state to state (e.g. 75 m³ in Bavaria vs. 10 m² in Berlin).
Choosing the right loan: flexibility without a land registry entry
For financing your garden project, a standard instalment loan is usually the best choice. Unlike a purpose-bound modernisation loan, which is often tied to the property, you do not need an entry in the land register here. This not only saves notary fees of several hundred euros, but also significantly speeds up the entire process. You can use the loan amount, which is often between 3,000 and 80,000 euros, freely for all aspects of your project – from the garden shed itself to the new plants. With many digital providers, payment is made within 48 hours of approval. Such a loan for free use of funds 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 in order to be able to respond to unforeseen costs during the construction phase.
Calculating costs realistically: What your garden really costs
Careful budget planning is the key to success when taking out a loan tailored to a garden shed and landscaping project. The costs of pure garden design by a specialist company range between 40 and 100 euros per square metre. In a 200 square metre garden, these expenses quickly add up to 8,000 to 20,000 euros. On top of that come the costs of the garden shed itself, which can vary depending on the model and features between 2,000 and 15,000 euros. Always allow a buffer of at least ten per cent for unforeseen expenses. A detailed household budget calculation for the loan application helps you assess your financial capacity. Consider the following items:
Garden shed kit: from 2,000 euros
Foundation (e.g. concrete slab): 500 – 2,500 euros
Landscaping (paving, lawn, 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 of your loan application and prevents the need for additional financing later.
Check requirements: Pave the way for a quick approval
To obtain a loan smoothly, three key requirements must be met. First, you must be of legal age and be able to prove a permanent place of residence in Germany. Second, banks require regular, permanent income, which often exceeds a monthly minimum of 600 euros. Third, a positive credit check, usually via a SCHUFA enquiry, is crucial for approval and the interest rate. A good SCHUFA score above 95 per cent significantly increases your chances of top terms. Our expert tip: Request a free self-disclosure once a year so that incorrect entries can be corrected. For the digital application process, you usually only need three documents: a valid identity card, the last two payslips and your bank statements for 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 identification often takes just a few minutes.
Legal pitfalls: The building permit for your garden shed
Before the first spade is put in the ground, checking the local building regulations is essential. Whether you need planning permission for your garden shed depends on the building regulations of your federal state. In Bavaria, for example, garden sheds with a volume of up to 75 cubic metres within the built-up area are exempt from planning permission, whereas in Berlin the limit is just ten square metres of floor area. Building without the required permit can result in fines of up to €50,000 and an order to demolish the structure. So always check in advance with the relevant building authority in your municipality. The following factors are decisive:
Size of the shed (volume in m³ or floor area in m²)
Location (within or outside the area covered by a development plan)
Use (a house with a toilet or fireplace is almost always subject to planning permission)
Distance from the boundary to the neighbouring property (usually three metres)
A loan for an allotment garden is often subject to the simplified rules of the Federal Allotment Garden Act, where huts of up to 24 square metres are usually exempt from planning permission. Clarifying these points protects you from costly surprises.
Understanding contract details: optimise interest, special repayments and term
If you have received a loan commitment, check the contract details carefully. The annual percentage rate (APR) is the key figure, as it includes all the costs of the loan and allows a genuine comparison between offers. Look out for the option of making free overpayments. Many banks allow you to repay up to 50 per cent of the remaining debt once a year, or even the full amount, without additional costs. This can reduce interest costs over the term by several hundred euros. Early repayment of the entire loan is also regulated by law: the bank may charge a maximum of one per cent of the remaining debt as an early repayment charge. A comparison of different terms shows you the trade-off between a low monthly instalment and low overall costs, similar to financing for a carport. A well-negotiated contract provides you with the financial security you need for your project.
Request your individual risk analysis now: have your insurance situation checked free of charge and receive concrete suggestions for optimisation.
More useful links
Wikipedia offers a comprehensive article on garden sheds, explaining definitions, possible uses and construction methods.
The German Environment Agency provides information on nature-oriented gardens and their significance for the environment.
The KfW presents funding programmes for private individuals that can help finance construction and modernisation projects.
Laws on the Internet provides the full text of Section 29 of the Federal Building Code (BauGB), which contains regulations for construction projects in the outer area.
The Federal Association of German Garden Friends e.V. provides information on allotment gardening in Germany and the related regulations.
FAQ
Can I also use the loan for the garden shed for furniture and plants?
Yes, an instalment loan is not tied to a specific purpose. You can use the entire amount flexibly for the garden house, landscaping, new garden furniture, plants or even tools.
How quickly is a garden loan paid out?
After you have submitted the application digitally and identified yourself via video identification, the payout is made by most online banks within 24 to 72 hours.
What documents do I need for the loan application?
As a rule, you will need a valid identity card or passport, your last two to three payslips and the corresponding bank statements.
What happens if I build my garden shed without the necessary building permit?
Building without the required permit is an administrative offence. The authorities can impose a fine of up to 50,000 euros and, in the worst case, order the demolition of the garden shed.
Can I repay the loan early?
Yes, that is possible at any time. Check the contract for the terms of free special repayments. For a full early repayment, the bank may legally charge a maximum of one per cent of the outstanding balance as compensation.
Does a second borrower improve the chances?
Yes, a second borrower with their own income and good creditworthiness significantly increases the security of the loan for the bank. This often leads to quicker approval and better interest rates.
