Document background
The Lender Approval Letter is a crucial document in the German lending process, issued after a successful credit application and before the execution of the final loan agreement. It represents the bank's formal commitment to provide financing subject to specified conditions. This document is used in both commercial and consumer lending contexts, though the required content and format may vary depending on whether the borrower is a business entity or a consumer. Under German law, the letter must comply with various regulatory requirements, including those set forth in the Banking Act (KWG) and, for consumer loans, the consumer protection provisions of the German Civil Code. The Lender Approval Letter typically precedes the full loan documentation and serves as a basis for the borrower's decision to proceed with the financing.
