Faster to Credit: Use Online Identification Process for Digital Completion
11 Jul 2025
8
Minutes
Katrin Straub
CEO at nextsure
Long waiting times for loan applications are a thing of the past. Modern online identification procedures enable a fully digital and secure loan approval in just a few minutes.
The topic in brief and concise terms
Online identification procedures like VideoIdent and eID reduce the time to complete a loan from several days to just a few minutes.
The procedures are regulated by the Money Laundering Act (GwG) and the BaFin, and offer the highest security standards.
For a smooth process, a valid ID, a stable internet connection, and a suitable device are essential.
Boost efficiency: From days to minutes in loan completion
The classic PostIdent procedure often takes three to five working days and significantly slows down the loan process. A modern online identification procedure reduces this time to under ten minutes and allows for almost immediate processing. Banks report an increase in efficiency of over 80 percent since the introduction of digital identification methods. This development is part of a larger trend, as already nine percent of Germans have an account with a smartphone-only bank. The digital transformation not only makes everyday life easier but also significantly accelerates the online loan with instant approval. This shortens and simplifies the path to financing, optimizing the entire process for the consumer.
Two ways to the goal: VideoIdent and eID in detail
Two main methods have been established for digital identification, both of which meet high security standards. The VideoIdent process connects you via video chat with a trained employee who checks your identification documents in real-time. The eID function uses the chip in your ID card and an app to cryptographically confirm your identity in under a minute. Both methods are regulated by the Federal Financial Supervisory Authority (BaFin) and ensure maximum protection through end-to-end encryption. The success rate for using the eID is over 95 percent for prepared users. A digital loan application without paperwork is simpler than ever before. The choice between the processes often depends on personal preference and technical equipment.
VideoIdent: Personal interaction via video, typically completed in five to ten minutes.
eID process: Fully automatic procedure, often completed in under a minute, requires an NFC-capable smartphone.
Security: Both methods comply with the Money Laundering Act and are considered as secure as on-site identification.
Availability: Most digital loan providers offer at least one of these two options.
These technological advancements form the foundation for quick and secure access to financial services.
Ensuring Legal Certainty: The Role of GwG and BaFin
The legal basis for all identification procedures in Germany is the Money Laundering Act (GwG). It obliges financial institutions to ascertain their customers' identities beyond doubt to prevent illegal activities. The Federal Financial Supervisory Authority (BaFin) detailed the specific requirements for video identifications in their Circular 3/2017. These regulations ensure that online procedures offer the same level of security as a physical verification. From April 2024, this practice will be placed on an even stronger legal foundation through a new regulation that also includes semi-automated procedures. With a credit comparison with TÜV seal, you can additionally rely on verified providers. The strict regulation creates the necessary trust for the digital financial market.
Practical guide: Successfully achieving online identification in four steps
A smooth online identification process can be completed in a few minutes with the right preparation. An example: A customer needs a quick loan for bills of 2,500 euros and completes the entire process, including identification, in less than 15 minutes. Only a few things are required for this. Have these four points ready to avoid delays:
Valid identification document: Have your ID card or passport ready. Make sure the document has not expired.
Stable internet connection: An uninterrupted connection is essential for the video chat or data transmission.
Suitable device: Use a smartphone, tablet, or computer with a working camera and microphone.
Quiet and well-lit environment: Ensure good lighting conditions and avoid background noise to facilitate the verification.
With this simple checklist, the technical hurdle for digital identification is quickly overcome.
Leverage expert knowledge: Tips for a smooth process
Small details can make the difference between a quick completion and an unnecessary delay. Our expert tip: Check in advance whether the online identification function of your ID card is activated and whether you know your six-digit PIN. You can do this directly in the AusweisApp or at your local citizen's office. For the VideoIdent procedure, it is crucial to hold and tilt the ID document correctly in front of the camera so that the holographic security features are visible to the staff member. A correct budget calculation for the loan application is as important as the identification. Most interruptions in the process arise from a poor internet connection or invalid documents. Good preparation is therefore the key to success.
Future Outlook: The Evolution of Digital Identity
The development of digital identification methods is continuously advancing. The EU is promoting the introduction of a digital wallet (EUDI Wallet) with the eIDAS regulation, which is expected to be available to all citizens by 2026. This wallet will enable not only the secure digital storage of the ID card but also other proofs such as the driving license. Fully automated procedures utilizing artificial intelligence are already being tested under the supervision of the BSI to further increase efficiency. These innovations will further simplify the process of how you apply for an instant loan online. The future of lending will become even more seamless and secure.
The final step: Digital signature for contract completion
After successful identification, the last step follows: the digital signature. With the Qualified Electronic Signature (QES), you sign your credit agreement legally online, completely without pen and paper. This process often takes just a minute and is usually completed by entering a TAN received via SMS. The combination of online identification and QES allows you to secure an instant loan with payout within 24 hours. The QES is legally equivalent to the handwritten original. This clears the way for fast and uncomplicated financing. Now request an individual risk analysis: Have your insurance situation checked for free and receive specific optimisation suggestions.
More useful links
Bundesfinanzministerium provides information on the topic of digitalisation.
FAQ
Can I complete the loan application entirely online?
Yes, by combining online identification methods with the Qualified Electronic Signature (QES), you can carry out the entire loan process from application to contract conclusion completely digitally and without any paperwork.
Which identification documents are accepted?
Typically, the German identity card and passport are accepted. For the eID function, an identity card with an activated online function, an electronic residence permit, or an eID card for EU citizens is required.
What happens if the identification fails?
If the online identification fails, you can usually repeat the process. Check your internet connection, lighting conditions, and the validity of your ID. Alternatively, most banks offer the classic PostIdent procedure as a fallback option.
Is the online identification process free?
Yes, for you as a customer, the online identification process is generally free of charge. The costs are usually covered by the respective provider, such as the bank.
Do I need to install software to use the eID?
Yes, to use the eID function, you need the free federal AusweisApp on your smartphone or computer. This app establishes the secure connection between your ID card and the service provider.
Are my data secure during online identification?
Yes, data transmission is always end-to-end encrypted. The providers are bound by strict data protection regulations (GDPR) and BaFin regulations, which ensures a very high level of data protection.
