Types of loan in Spain
Spain offers various forms of lending, differing in purpose, term and conditions. As a German on Mallorca you will mainly encounter these options:
Prestamo Hipotecario (mortgage) is the classic property loan. It is secured by the property itself and offers the lowest interest rates (from approx. 2.5-4% variable). Terms of 15 to 30 years are common. For EU citizens with residencia, Spanish banks finance up to 80% of the purchase price; for non-residents usually only 60-70%.
Prestamo Personal (consumer loan) is an unsecured loan for larger purchases such as a car, furniture or renovation. Interest rates are considerably higher (6-12% TAE), but the application is simpler and faster. Terms typically run from 1 to 8 years.
Credito Revolving (revolving credit) works similarly to an overdraft. You receive a credit limit that you can use flexibly and repay in instalments. Caution: interest rates are often very high (15-25% TAE) and the costs can be hard to track. Since 2020 Spain has stricter regulations for this type of credit.
Prestamo para Autonomos (loan for the self-employed) is aimed at freelancers and small business owners. Banks typically require a longer business history here (at least 2 years) and stable turnover. Conditions are similar to consumer loans, but can vary depending on the collateral available.
Requirements for foreigners
As an EU citizen you have fundamentally the same rights to credit as Spanish nationals. In practice, banks impose additional requirements if you have not been in the country long.
The NIE is mandatory. Nothing works without your Spanish identification number. If you do not yet have one, you will find everything you need in our NIE guide.
A Spanish bank account is also necessary. Loan repayments are collected by direct debit, and most banks only grant loans to their own customers. If you do not yet have an account, our bank account guide will help.
Proof of income is decisive. Employees need their last 3 pay slips (nominas) and their employment contract. Self-employed people submit their last tax return (Declaracion de la Renta) and the Vida Laboral. Pensioners need their pension statement. If you do not yet have Spanish proof of income, some banks accept German documents with a certified translation.
The credit check runs through the Spanish registers ASNEF and RAI. Unlike in Germany there is no scoring system - you either have a negative entry or you do not. This means: no unpaid bills in Spain, no problem. You can check your status free of charge at asnef.com.
The debt ratio is an important factor. Spanish banks want your monthly loan repayments to amount to no more than 30-35% of your net income. Existing loans (including those from Germany) are taken into account if you disclose them.
The loan application process
Step 1: Prepare your documents
Gather all documents before you go to the bank. This saves time and makes a good impression. You need: NIE, passport, empadronamiento, your last 3 pay slips or tax return, a current bank statement and - for mortgages - the purchase contract or the reservation agreement for the property.
Step 2: Compare offers
Do not go to just one bank. Get at least 3 quotes and compare the TAE (effective annual interest rate), not the advertised nominal rate. Also look at arrangement fees (comision de apertura), early repayment penalties, and whether add-on products such as insurance are compulsory.
Step 3: Submit the application
The bank checks your documents and creditworthiness. For consumer loans you often get an answer within 1-3 days. For mortgages, an independent property valuation (tasacion) is also carried out, costing 300-500 EUR.
Step 4: Binding offer (FEIN/FIAE)
Since the Mortgage Act of 2019, banks must hand you the binding offer (FEIN - Ficha Europea de Informacion Normalizada) at least 10 days before signing. This standardised document sets out all conditions transparently. Use this time to review everything carefully.
Step 5: Signing the contract
Consumer loans are signed at the bank branch. Mortgages are notarised at a Notaria. Since 2019 the notary must offer you a free prior consultation at which all clauses are explained. The notary costs are borne by the bank in the case of mortgages.
Mortgage vs. personal loan
The right type of loan depends on your situation. Here are the key differences:
With a mortgage, interest rates are low (2.5-4% variable, 3-4.5% fixed), the term is long (15-30 years), the application process is involved, and the property serves as security. You generally need 20-40% of your own funds plus approx. 10-12% for additional costs (taxes, notary, land register).
With a personal loan, interest rates are higher (6-12% TAE), the term is shorter (1-8 years), the process is much faster, and no security is needed. The maximum loan amount is usually 60,000-75,000 EUR.
Some buyers finance part of their own funds through a separate personal loan. This can work, but it significantly increases your monthly outgoings and is viewed critically by some banks.
Interest rates and terms
In Spain there are three common interest rate models for mortgages:
Variable rate (Tipo variable) is linked to the Euribor plus a bank markup (e.g. Euribor + 0.9%). The Euribor is adjusted every 6 or 12 months. Currently (as of April 2026) the 12-month Euribor is at around 2.5%. Your repayment can therefore rise or fall.
Fixed rate (Tipo fijo) stays the same throughout the term, typically between 3% and 4.5%. You pay a premium for the planning certainty, but you are protected from interest rate increases.
Mixed rate (Tipo mixto) combines both models: the first 3-10 years are fixed, then switches to variable. This is a compromise between security and lower costs.
For personal loans, rates are almost always fixed. The TAE varies considerably depending on the bank and your creditworthiness. As a rough guide: 6-8% TAE is a good offer, 8-12% is market standard, and anything above 12% deserves careful scrutiny.
Avoiding common mistakes
Comparing only the nominal rate (TIN). The TAE is the only fair basis for comparison, because it includes all costs. A bank can offer a low TIN while charging high arrangement fees.
Accepting add-on products without question. Many banks offer better conditions if you also take out life insurance, household insurance or a credit card. Work out whether that actually makes sense or whether the loan without these products (but at a higher interest rate) is cheaper overall.
Ignoring the early repayment penalty. If you want to repay the loan early, the bank may charge a fee. For variable mortgages the maximum is 0.15% (in the first 5 years) or 0.25% (in the first 3 years); for fixed mortgages up to 2% (first 10 years) or 1.5% (thereafter). Clarify this in advance.
Skipping the notary consultation. For mortgages you have the right to a free consultation with the notary before signing. Use it, especially if your Spanish is not yet perfect. You can also bring an interpreter.
Falling for quick loans (creditos rapidos). Online providers promise loans in minutes with no documentation. The interest rates are often 20-25% TAE or higher. These offers are almost never a good idea.