The need for a loan is often accompanied by a limited monthly budget. So, logically, many borrowers try to find a loan with small installments in order to keep their monthly burden of repaying the loan as low as possible.
Various factors influence the amount of the monthly rate.
The majority of classic installment loans are linear. All costs for interest, the processing of the loan and other costs are added to the payment amount. The total amount thus formed is divided equally between the individual months of the loan term. This is how the monthly rate is calculated. Since the loan amount is dictated in most cases by the borrower’s money needs and the lender decides on the interest rate based on the applicant’s credit rating, the borrower can usually only influence the monthly rate over the term.
Of course, the rate is lower the longer the term of the loan is agreed. However, due to a longer term, the borrower incurs higher costs in the form of additional interest. Thus, a loan with small installments is often characterized by higher overall costs. For this reason alone, the amount of the monthly installment should not be the sole decision criterion for a specific loan.
If the monthly rate is low, the repayment rate should be considered
Special forms of financing enable loan seekers to take out loans in small installments. The rate is deliberately kept so low that little more than the interest accrued is paid. The actual repayment of the loan amount takes place at the end of the term of the loan. A particularly high balloon rate is due here. The special form of financing is particularly common when financing car purchases.
It is particularly useful if the borrower only wants to bridge a temporary financial shortage and can pay the final installment by the end of the term. However, every borrower should be aware that the low repayment rate means that the interest burden on such a loan is greater than on a loan with linear repayment in each month of the term.
Entrepreneurs, temporary workers or low-wage earners who are looking for affordable financing are all getting credit from private individuals. The personal loan primarily offers one thing that is becoming conceivable with fewer and fewer credit institutions – fair credit opportunities.
Personal loan – that’s why it’s so important
In Germany it is not only the gap between rich and poor that has widened for many years. The changes in credit opportunities are no less serious. The situation used to be simple. Those who had work, paid their taxes, had an income that nourished them and made them creditworthy. Without work there was no credit for the new car. But at least the defective washing machine could be paid for by unemployment benefits, pensions or unemployment benefits.
Agenda policy turned decent unemployed people into workers who work for starvation wages. With mini jobs and temporary work, you no longer “lie” on the sofa today. With their income, they often do not even “lie” above the attachment limits. You won’t get a loan from the bank. The situation is further exacerbated by the dollar crisis.
The banks are getting their hands tied for lending to weaker income groups. Bad loans are supposed to be eradicated. Nevertheless, a temporary worker or a pensioner occasionally needs a new washing machine or another vehicle. The loan from private individuals often opens up the only credit opportunity.
Taking the future into your own hands – business loans
Anyone who does not want their butter to be taken from their bread and who would like their work to be paid fairly is trying their luck as an entrepreneur. Even the best business idea does not make him creditworthy. The state offers him the start-up loan to help him start his own business. However, this loan is not approved freely and promptly. If you want to create the loan approval yourself, you have to have a lot of love for the bureaucratic paper war and time.
People who want to start a business or tax consultancy are best suited for this. This effort is often too great for a master electrician or motor vehicle. His core business has to be built up, because he is the master at it. The way to the house bank often only brings disillusionment. Without KfW in the background, the loan is far too expensive and the required security cannot be provided. Again, it is the loan from private individuals that will finance the successful start of the company.
Personal loan – the win-win situation
Small-scale savers are being veined by European politics, of all current parties. Your savings will lose purchasing power every day. Thanks to the dollar bailout, savings rates are so low that inflation compensation no longer takes place. Instead of watching their savings lose value, more and more savers are investing the money on the large personal loan platforms.
Borrowers who are let down by the banking system are therefore not unreliable payers. The loan from private individuals helps them, because they can achieve their goals through fair credit opportunities and reasonable interest.
Today, the offers of numerous banks and savings banks are freely available to borrowers. Borrowers can now look forward to an incredibly wide range of offers. More and more banks and savings banks are now offering several credit products that differ from one another, particularly in terms of usage, loan protection, term and repayment.
Today, it is no longer only banks and savings banks with a fixed branch system that offer loans at attractive terms; an increasing number of online banks are now marketing attractive credit products. A few years ago, borrowers with a negative Credit Bureau had great problems getting a loan. Those who have a negative Credit Bureau today can still hope for a loan.
Loans without Credit Bureau were created especially for people with negative Credit Bureau information. If you need a loan without Credit Bureau information immediately, you should not do without a comparison of several offers. The comparison of several loan offers is now possible online, free of charge.
Apply for credit without Credit Bureau information immediately and secure low interest rates at the same time
If you decide to compare several loan offers on the Internet, you can permanently save a lot of money. If you want to save a lot of money in the long term, you should definitely pay attention to the effective interest rate as the most important comparison criterion. In contrast to the borrowing rate, the effective interest rate covers all costs and risks associated with the loan.
In addition to the term and loan amount, the borrower’s creditworthiness is also taken into account when determining the effective interest rate. Since credit without Credit Bureau information is provided without Credit Bureau information, consumers with a high income in particular can benefit from an attractive effective interest rate, and income plays a particularly important role in assessing creditworthiness.
The term and the loan amount also have an impact on the effective interest rate, since the term and the loan amount define the credit default risk. Those who opt for a large loan amount and a long term have to expect significantly higher interest rates than a borrower who chooses a small loan amount and a short term.
Applying for a loan without Credit Bureau information on the Internet is possible today at all commercial banks on the Internet. Filling out an application form is enough to take the most important step towards a loan. The bank then checks the creditworthiness and provides the loan agreement if it is approved. The loan amount is paid out when the bank receives the contract.
Have a loan without Credit Bureau information right away – secure favorable conditions by comparing them
Numerous financial portals enable fast, free and objective comparison with a loan calculator. Credit calculators allow the borrower to take individual sizes into account in the comparison, which enables particularly precise comparison results to be achieved.
It is often not easy to get a loan for freelancers and the self-employed. Both groups of people have no fixed income. For most banks, however, this is an essential prerequisite for being able to grant a loan at all.
Find the right bank
For the reasons mentioned, many banks exclude freelancers and the self-employed from lending from the start. This applies even if their income is very high and well above the national average.
If you are looking for a loan for freelancers and the self-employed, you cannot avoid doing a thorough search first, which banks, savings banks or Volksbanks grant such a loan. The Internet is primarily suitable for this, which also offers interested people the opportunity to compare several loan offers and use a loan calculator.
Requirements for lending
Regardless of whether a loan for freelancers and the self-employed is required for private or business purposes, it is essential that the borrower’s Credit Bureau information is in order. Otherwise it will be very difficult to find a suitable loan for freelancers and the self-employed.
If the income is insufficient, the bank can request additional collateral, a guarantor or a solvent co-applicant. However, guarantors and co-applicants should be able to make a living without problems and still have enough money to cover the monthly loan installments in an eamergency. The bank will carry out very precise income and / or asset reviews here.
Anyone who has a life insurance policy, a securities account or a debt-free property could also use these valuables to hedge credit.
Approval, payment and repayment
The application and approval procedure for a loan for freelancers and the self-employed differs only slightly from the procedure that is common for other loans. If the requirements for a loan are met, the bank or savings bank will pay the loan within a few days and transfer it to the borrower’s private or business account.
The loan must be repaid in regular, regular monthly installments. At this point, it would be very important that the freelancer or the self-employed make sure that the loan installments have to be paid even if the income fluctuates significantly, decreases significantly or is not at all.
In the event of temporary payment difficulties, you should definitely seek advice from the bank. Otherwise, there are serious consequences that may go as far as the termination of the loan and a corresponding negative entry at Credit Bureau. The outstanding loan amount is due in one sum and could also be attached in the event of non-payment.
The more extensive the questionnaire to be filled out in the loan application, the more precisely the lender can calculate the individual credit risk. Consequently, financial institutions ask most questions when calculating the interest rate individually for each customer depending on their personal credit rating.
A fixed interest rate for all borrowers, on the other hand, enables financial institutions to issue the loan without many questions. However, banks must not forego a demand for income, even if they do not have to request proof of income.
Traditional lending with few questions
Traditionally, mail order companies give the desired loan in the form of an installment payment without asking many questions. In the case of ordinary order sums, there is usually no demand for the amount of income; for existing customers, obtaining additional Credit Bureau information is also unusual for a subsequent order. The pawnbroker also grants his loan without having to ask many questions, because the pledged deposit serves as security.
In principle, the disposition framework of a checking account can also be interpreted as a loan grant without further questions, since most financial institutions base their disposition credits on the incoming payments of the account concerned. Even when granting the availability of a newly applied credit card, many issuers forego many questions, provided the new customer is initially satisfied with a small lump sum. A large consumer bank is advertising that it will grant a disposition limit of $ 3,000 that is independent of the checking account without further questions and evidence.
The Internet prevents inquiries
Offers for quick loan processing mean that financial institutions only have a few questions for loan applications and often refrain from sending receipts for low sums. In this case, the loan facilitates the processing of a loan application without many questions, especially since it is not possible to carefully check the details of an instant loan, which the financial institution promises to pay out within two bank working days after receipt of the loan application.
Often, it is particularly useful for borrowers to forego the exact demand for the composition of the income or to inquire about the status of the employment contract, since more and more employees receive their income from a main job and a part-time job or have a fixed-term employment contract.
The fewer questions the lender asks, the more carefully the applicant has to check whether he can pay the agreed loan installments over the entire term or whether it is better to choose a longer term.
In banking, collateral refers to objects and claims of the borrower to third parties that are technically deposited or can be used in the context of security transfer. The bank can realize the collateral as soon as the borrower no longer fulfills its obligations under the loan agreement in due time.
Lending without collateral in the technical sense
In terms of banking terminology, almost every consumer loan is basically a loan without collateral, since the borrower does not provide any specific loan collateral. One of the few exceptions is the car loan, in which the financed vehicle is usually assigned as security. The borrower’s regular working income serves as a substitute for possible loan security.
However, it is only a security in the strict sense of the term if the credit agreement provides for wage transfer. Furthermore, the part of the income that exceeds the garnishment-free limit can be assessed as credit security, since the financial institution can access this in the event of failure to pay back. For this reason, financial institutions sometimes refuse to pay the loan if the income is below the garnishment limit, even if the household bill shows that their potential customer can pay the loan installments.
Lending without collateral in colloquial sense
Deviating from the banking language, the colloquial language usually describes a loan as being given without collateral if the borrower is neither able to provide real security, nor can he assign claims and at the same time does not have a regular income from work. According to this definition, lending to people with strongly fluctuating income as well as loan disbursement to employees with multiple employment relationships are each a loan without collateral.
In this case, borrowing without proof of salary is a good idea, with the borrower indicating his average income. Deliberate misrepresentation of the amount of income is not permitted and, if discovered in spite of punctual payment of the credit installments, can lead to the bank terminating the loan. A positive Credit Bureau information increases the chance of obtaining a loan without collateral; in itself, it is less a guarantee of credit than a confirmation that the applicant has duly met his financial obligations in the past.
As an alternative to a loan without collateral from a credit bank, an organized private loan can be taken out via a corresponding internet platform. Many of the private lenders base their decisions more on social criteria and the intended use of the loan than on loan collateral.
The certificate of earnings in the narrower sense is an official form, which must be submitted when applying for an increase through the job center and some other social benefits. Both consumers and financial institutions use the term predominantly in a broader sense and also refer to the usual pay slip or, in the case of the self-employed, the current tax assessment as a certificate of earnings.
Dispensing with the certificate of earnings accelerates lending
The fact that banks in some cases grant a loan without a certificate of earnings speeds up the processing of the loan application. Documents that are not to be submitted do not have to be checked, and even if proof of income is submitted, it is often only possible to carry out a random or superficial check of the submitted documents. Lending without submitting a certificate of earnings is tied to a loan amount that is not too high and largely to good Credit Bureau information.
Traditionally, mail order companies agree to pay in installments as a earmarked loan without a certificate of earnings, since they only request proof of income if the order amounts are unusually high. Banks usually grant their customers the overdraft facility without a certificate of earnings because they can determine the incoming payments based on the account movements. Even when applying for a new credit card, an initially low credit limit is usual as a loan without a certificate of earnings; Many issuers only require this if their new customer immediately requests a higher credit limit than the usual one.
What does the customer look for when applying for a loan without a certificate of earnings?
The fact that the bank grants a loan without a certificate of earnings does not release the customer from the obligation to provide honest information about his or her income from work in the loan application. Incorrectly entered incorrect income data means that the bank may terminate the loan without notice, even if all credit installments have been received on time. The loan without a certificate of earnings prevents the discussion of which income components are to be considered as income for the lending.
If the loan applicant receives part of his income irregularly, he can average it. At the same time, he makes sure not to agree the monthly loan installments too high; it can be reduced by choosing a longer loan term. In addition to a bank, loans can be taken out without an earnings certificate via an internet platform for arranging personal loans. The private lenders registered there are largely based more on social criteria and the intended use of the loan than on the demonstrable income of the applicants.