It is not impossible to get an instant loan despite poor credit rating. It just has to be done skillfully. You can find out what needs to be considered and where the possible pitfalls lie in our article on instant credit despite poor creditworthiness.
A strategic approach makes an instant loan possible despite poor creditworthiness
In order to make the “bad credit rating” generally understandable, the following are essential features that clearly indicate a bad credit rating.
- Negative Credit Bureau
- Existing unemployment
- Long sickness-related sickness
- Hartz IV receiver
- Disability Pensioners
- Single parents with several children
- Low earners
- time employees
- Part-time workers
The creditworthiness is rated particularly badly if not only one of the mentioned characteristics but several apply to a person who wants to take out a loan. If this is the case, it can be hopeless to get a loan because no bank and no private individuals agree to issue an instant loan despite their poor credit rating. Which is no wonder. Whoever lends money also wants to have the chance to get it back.
How banks react to customers’ poor credit ratings
The bad creditworthiness of a loan applicant does not necessarily lead to the rejection of loan requests. There are banks that grant a loan despite the poor credit rating of the customer. However, they then charge correspondingly high interest rates, making the loan expensive for the customer. Other banks do not immediately refuse if their creditworthiness is poor, but instead request additional collateral from the applicant, such as a solvent guarantee.
The perfect solution – a solvent guarantor
It is still the case that banks almost always issue an instant loan despite poor creditworthiness as soon as a solvent guarantor is included in the contract. The bank is thus shifting the risk of default on the guarantor, who always has to sign a joint and several guarantee for installment loans. If the borrower does not pay his installments later, the bank immediately uses the guarantor. This can be done with the joint and several guarantee, so that a total loss can theoretically be ruled out, unless the guarantor does not pay.
Not every bad credit rating is really “bad”
In addition, the characteristics of poor creditworthiness can be assessed very differently. Someone who earns little but has a clean Credit Bureau, from which it can be seen that in the past loans went through cleanly, will also receive an immediate loan in spite of poor creditworthiness if simple collateral is provided.
The situation is completely different if the Credit Bureau information is negative and the loan applicant also has no work. The fundamental question here is what should be used to repay the loan installments. Unemployment benefit is not a seizable income. In such cases, especially when there are several negative criteria, it is pretty hopeless to get a loan.
A loan without Credit Bureau
If the poor creditworthiness is only due to the fact that the applicant’s Credit Bureau is negative, the so-called Swiss loan, which is applied for through a credit intermediary, can be the solution. The Swiss loan is a Credit Bureau-free loan. What is in the Credit Bureau does not matter for the lending. Loan applicants who apply for a loan without Credit Bureau must be able to demonstrate permanent employment with attachable income. Those who are unemployed or receive Hartz IV benefits will not get this loan. Guarantors are not accepted by the lenders.
It is not entirely out of the question to get a loan even with poor creditworthiness or bad creditworthiness. It always depends on what is how bad. In the case of a negative Credit Bureau, the Credit Bureau-free loan is actually recommended first. In many other cases, it is sufficient if the bank is given a solvent guarantor from the outset or subsequently. Solvent then always means that the guarantor’s creditworthiness must be so good that the bank can pay the loan to him. This presupposes that the guarantor is not fully burdened with his own obligations, then it can also work with the instant loan despite poor creditworthiness.