Browse Month: December 2019

Credit with 2 applicants – It’s so easy to get a loan

 

Especially with large loan amounts, a bank will always insist that a loan be concluded with two applicants. The risk is too great that a single applicant will fail and the bank will have to give up their money. But what is different about a loan with 2 applicants and what needs to be considered?

The documents

The documents

With every loan application, the bank first checks the so-called creditworthiness of the potential borrower. In order to be able to objectively evaluate this, the borrower not only has to agree to a query from Credit Bureau, but also has to provide various meaningful documents. Mainly the monthly income has to be shown and explained. This includes not only the wages or the salary earned, but also all other income such as child benefit, maintenance, income from rentals or other regular income. The expenditure is compared with this information. As with the income, it must also be possible to prove it credibly.

If you now choose a loan with two applicants, both applicants must be able to provide these documents. The bank will then calculate the lump sum required for everyday life. The remaining amount can be used as an installment for the loan.

The advantages

The advantages

The chances of getting a loan are often better if you can name a second applicant. For the banks, this means additional security, which is often rewarded with lower interest rates and better conditions. It is not critical whether the second applicant comes from your own family. It is only important that he also has a good credit rating and receives a regular income that is in a attachable area.

The disadvantages

The disadvantages

The only disadvantage of such a loan is the dependence of the two borrowers on one another. Both are liable for the other borrower if the borrower can no longer pay or otherwise steals responsibility. In such a case, the bank will always turn fully to the second borrower, who will then be liable for the entire amount. So you should carefully consider in advance who you want to establish such a close “connection” with and whether it can last over a long period of time. Because only then is it really worth thinking about such an option.

Borrow money despite completed Credit Bureau entry

In addition to the current negative characteristics, the Credit Brureau information also contains completed entries. In principle, Credit Brureau entries are retained three years after they have been settled, only for amounts up to two thousand USD and a payment within six weeks after notification to the credit protection department, data is deleted immediately. According to Credit Brureau’s internal definition, completed entries are part of the neutral creditworthiness data, but not all financial institutions agree with this view.

Bank loan despite Credit Brureau completed

Bank loan despite Credit Brureau completed

If consumers take out a loan through a conventional commercial bank despite the Credit Brureau entry being completed, they check before submitting the application whether the respective financial institution rates it as a negative entry or shares the Credit Brureau view that this is a neutral credit date. Appropriate information can often be obtained from a general telephone inquiry without mentioning the name. The fact that the borrower’s financial position has improved since the Credit Brureau entry was forfeited can be seen from the fact that it has been settled.

Nevertheless, the chances of getting a loan despite a completed Credit Brureau entry increase if the customer takes out the loan with another applicant whose credit report does not contain any current or completed negative characteristics. Switching to a Swiss bank is also possible. Since the latter cannot obtain credit information about the German credit protection, it receives no knowledge of completed or existing negative entries. Despite the lending from Switzerland, the entire settlement is carried out in USD, so that the risks of a foreign currency loan do not arise.

Borrowing with completed Credit Brureau entry through private lenders

Borrowing with completed Credit Brureau entry through private lenders

It is easier to take out a loan via a website for private lending, even though a Credit Brureau entry has been made, than through a commercial bank, since many of the lenders registered there rate social issues more than hard credit data. They also like to draw a loan request from loan seekers with a completed Credit Brureau entry, because they know about the difficulties of taking out loans with traditional commercial banks and want to support those affected.

Through a detailed description of the purpose of the loan and extensive data on the creditworthiness of the applicant, private lenders learn that the applicant wants a loan despite the Credit Brureau entry being completed. For data protection reasons, the extensive information is harmless, since the platform owner carries out the organizational loan processing and the private lenders and lenders registered there do not learn their mutual contact information and bank details.

Loan without Credit Bureau information at no extra cost

The loan seeker who has negative entries in his Credit Bureau is no longer as restricted in borrowing as it was years ago. Many providers in the financial market promise top conditions and quick availability of the money.

In the case of a loan without Credit Bureau information and no upfront costs, which is granted by many online banks as well as direct banks, a Credit Bureau query is not used, but no credit check is carried out. This credit check does not focus on the Credit Bureau information but on the income of the loan seeker. So that a loan seeker receives the best provider and an objective comparison to the many loan offers, he should strive for a loan comparison.

Pay attention to the seriousness of the loan brokerage

Pay attention to the seriousness of the loan brokerage

Especially in the case of a loan without Credit Bureau information without any preliminary costs, the borrower should pay attention to the interest level, as this is increased due to the high credit risk. When a credit comparison is started, the interest rates of the providers and the effective interest rate can be compared. The effective interest rate is the measure for the creditworthiness of the loan seeker as well as for the loan amount and the term.

However, there is still a lot to consider with a loan without Credit Bureau information without any upfront costs. This form of credit is usually processed through a credit agency. Unfortunately, there are a lot of black sheep on the Internet who charge shamelessly high preliminary costs without doing anything for it. A loan seeker certainly knows when he engages a credit broker that he has to be paid. But the preliminary costs should really only be quantified in the reimbursement of verifiable expenses. Should there be any cash on delivery or prepayment fees in horrendous amounts, you should definitely stay away from it. There are two to three large financial portals on the Internet that convey a loan without Credit Bureau information without any upfront costs.

A loan seeker should look around. Likewise, so-called additional contracts should not be used, such as residual debt insurance (unless they are really necessary), building society contracts or life insurance. A loan commitment that is dependent on such degrees is not permitted. In addition, the fees that a loan brokerage should only be due when the loan approval has been given.

Do a credit comparison before you take out the loan

Since a loan without Credit Bureau is always charged with high interest rates, as a loan seeker you should always carry out a loan comparison. The various providers are listed promptly and the interest level is displayed. The reliability of the providers is also shown in a credit comparison.

Loan without proof of salary

Securing the loan is the top priority when lending. A loan request from which it is foreseeable that the loan will not be serviced will not be approved at all. The credit terms are firm and state that the loan seeker must be of legal age and must have an income that comes from employment.

The employment contract should be permanent and the applicant should be outside a trial period. Securing a loan with proof of salary is the easiest way to lend. But there are professional groups that cannot provide proof of salary. However, there are other options open to this clientele.

Proof of creditworthiness

For example, the self-employed are excluded from normal lending because they cannot prove regular income. If the self-employed can present positive balance sheets that prove his income, this professional group can also count on a loan without proof of salary. In addition to the balance sheets, other collateral must also be provided. The naming of a guarantor or other collateral such as real estate or life insurance increases the chances.

Students who work alongside their studies have the same problem. If they need this money, a loan without proof of salary would also have to be applied for here. But the regulations of the German banks state that there is no loan for anyone who cannot prove a regular income. It would be different if a student could also provide other collateral or a surety.

The creditworthiness has priority

The creditworthiness has priority

The criterion for lending is proof of a regular income. It must be ensured that the loan seeker has sufficient financial resources or collateral to positively influence a loan without proof of salary. Even loans that come from abroad are restricted in their credit approval, since the income cannot be proven.

alternatives

alternatives

Alternative options for a loan without proof of salary would be to ask friends or acquaintances. However, this lending business should not only insist on mutual trust, but it should be recorded in writing.

Sometimes inquiring at your own house bank can lead to success, especially when an independent job description is indicated. The house bank knows the financial transactions of its customer and can therefore grant a loan.

A new financial market has opened up where loans are granted from private to private. Loan seekers can create a meaningful profile on appropriate portals and express their credit request. Investors who want to invest privately will look at this profile and then, if necessary, make a positive decision about a loan.