In our daily practice as a free credit and financing intermediary, we are often asked these questions by people who either have not yet yet dealt with the issue of borrowing, or whose loan application has been rejected several times by banks and who are therefore looking for it are after a possible lender.
Possible lending for both groups of people is equally dependent on several factors listed below. Because: Banks regularly check the following aspects of the loan seeker before lending to private individuals:
- personal creditworthiness,
- creditworthiness stuff,
Can the borrower take out a loan at all? Is he legally able to conclude a loan agreement with legal effect?
These are private individuals regularly if they are fully legally competent, ie of legal age and are not restricted in their legal capacity. The age is checked on presentation of the borrower’s valid identity card.
The audit of the personal credit
How likely is it likely that the borrower will and will repay the loan?
Personal creditworthiness can be assumed on a regular basis if the loan seeker deserves trust due to his proven reliability and professional and professional qualifications. For this purpose, all of our bank partners will request complete bank statements from the last four to six weeks for a credit application review.
In the past, many bankers have shown that direct debits on their salary accounts, due to a lack of cover for justified debits, have proven to be unreliable. For this reason, recognizable direct debits that were returned due to a lack of cover usually lead to the immediate rejection of a loan application.
As this measure only takes into account the last four to six weeks before the application is made, all banks always consider the borrower’s credit record information. In the next step, the material creditworthiness check is only carried out if there are no negative characteristics. In addition, bank information from other banks can also be used (the use of bank information from other banks is, however, hardly relevant in practice in the bulk business of a bank and is rather restricted to individual cases).
Checking material credit
How likely is it likely that the borrower due to its economic position a loan ever repay can?
For this purpose, the current and future expected income ratios are examined on the basis of suitable documents (for example, pay slips) and the current financial situation of the borrower on the basis of self-disclosure and a statement of assets. Is the monthly income, less the fixed monthly payment obligations, sufficient to support the installment of the new loan? Which assets does the borrower already own and how high are they possibly still encumbered with loans, or how high is the borrower’s total level of debt, taking into account any existing liabilities?
Checking possible collateral
Credit collateral should enable the bank to repay the loan granted in the event of the borrower’s insolvency or unwillingness to pay. This could be, for example, sureties, assignment of claims, liens on movable and immovable objects and land, or transfer of property as security.
But the installment loans, with which we are concerned here are usually as so-called unsecured loans completely without collateral provided. Therefore, the interest rate here is also somewhat higher than it is, for example, in the case of real estate financing, since banks allow themselves to “pay” for the increased default risk via the interest rate. The increased interest rate is, so to speak, a risk premium.
In the case of larger loan amounts or vehicle financing, however, banks can make lending dependent on the provision of collateral, the intrinsic value of which must then also be checked. However, this procedure plays a rather subordinate role in the area of installment loans, because these loans are – as already mentioned above – generally granted as blank loans – ie without collateral.
Only in the case of vehicle financing is it common practice to transfer the vehicle letter to the financing bank by way of a security transfer, which often also ensures a slightly more favorable condition.
The question: “Do I get a loan? ”Can therefore not be answered correctly, generally, but only after checking the creditworthiness, personal and material creditworthiness and the collateral.
Only those who are of legal age, have proven their reliability in the past, have met all payment obligations punctually and regularly and whose current and expected income situation makes repayment of the loan probable, have realistic chances of being granted a loan.
It all reads much more complicated than it actually is in practice.
Because the vast majority of loan seekers – according to our more than 25 years of professional experience as a free credit and financing broker – also receive a corresponding loan contract on acceptable terms and we can usually implement credit solutions for almost everyone.
For this purpose, for example, we have installed the free installment loan online comparison on our website, with which interested parties can find out quickly and above all free of charge which bank would like to support their project at all and under what conditions.
It only takes a few minutes to enter the required request data and the credit request can be made free of charge at all banks represented on the platform at the same time – both in terms of general feasibility and in terms of the most favorable conditions.