Who needs a loan, usually goes to his house bank. This will obtain a credit check statement before a loan commitment. If the credit rating is classified as bad, then there will be no credit. Credit standing plays a big role in the economy and finance, not just in the area of credit.
The assessment of the creditworthiness is important, only the question arises, on which criteria the credit rating measures. First of all, it is the credit check information that provides indications of creditworthiness. If there are negative features stored in them, such as dunning notices or similar, the banks will certify a customer a bad credit rating.
In addition, proof of income or asset statements is used to determine the creditworthiness. If there is still a loan to pay when the new loan is applied for, it may also limit creditworthiness and lead to credit rejection. Nevertheless, a credit with a bad credit rating can be realized.
The bad credit loan- which alternatives remain
If the creditworthiness is insufficient, alternatives must be envisaged. Additional collateral can be raised if it exists in real estate, securities or valuables. If real estate is used as collateral, a land charge is made in the land register. With the mortgage, the bank can serve their claim in the event of a credit default. As a Lombard loan is called a loan, if securities or objects are pledged as collateral.
But very few borrowers with a bad credit rating have the aforementioned credit protection. A guarantee can be included in the loan application. In addition, capital-forming life insurance, if available, can be pledged. If the surrender value is 5,000 euros, then you can lend them. In this case, no new debt will be made because, so to speak, your own money will be mortgaged.
The credit with bad credit – the possibilities
If you apply for bad credit, you must plan more time to find a bank than a traditional loan. Not every bank accepts a guarantor or other collateral. The reason, for the bank that means more editing. If the credit rating is poor due to a negative characteristic, regular income employees have the option of applying for a debt-free loan through a credit intermediary. It should be noted that the loan amounts are limited. There is this type of loan in the amount of 3,500 euros or, depending on the credit rating, a maximum of 5,000 euros. The income, which must result from a non-self-employed activity, must be above the seizure-exemption limit.
That’s about 1,600 net incomes for a single person with a loan of 5,000 euros. If there are still dependent persons in the household, then the net income increases. These loans are an advantage if credit with a bad credit rating has a rejection and you only need a smaller loan amount.
In addition, in this form of a credit to pay attention to the choice of the credit intermediary. Not all agents work reputably. Thus, up-front fees and any insurance contracts that are made dependent on a loan commitment, not to call reputable. A good loan broker works on a commission basis, which means that only when the loan is approved does he get his provision.
Anyone who requires more credit than approves the non-credit checkering loans, which ultimately remains the mention of a guarantor who secures the loan. A guaranty can be provided by a guarantor from the family or acquaintance circle, but certain conditions are also imposed on him. He must be solvent, he must not have entries in his credit check and must have a sufficient income, which results from a non-self-employed activity. In addition, a guarantor must be made aware of any complications that can bring a guarantee. It should be clear to him that the guarantee has far-reaching consequences. If a default of payment occurs on the part of the borrower, a guarantor is immediately taken into recourse.
If he can not then pay the accruing installments, so he gets himself a bad credit rating. The Federal Court of Justice has therefore issued a judgment in which a guarantee is not lawful if the guarantor slips the financial guarantee into financial ruin. If the borrower finds a guarantor and he trusts the loan seeker, a household bill should be drawn up before a guarantee. This should include the guarantor’s own expenses and receipts, as well as the guarantor’s installments if any. If this bill still leaves a plus, the guarantor can sign.
If you do not want to mortgage a house or a lender and you do not want to take another person into your financial problems, then you should switch to the non-checking loans or with a credit on a bad credit rating remove the negative features and only then for a To decide credit.