Again and again there are problems with the application for a loan due to tightened bank guidelines. People whose credit information has a negative characteristic, but have particularly great problems getting a loan.
The banks see the credit information as an important statement that describes the default risk of the potential borrower. A negative feature in the information can affect everyone faster and the time until it is deleted is longer than the payment difficulties.
The solution could be a loan without credit rating
In order to be able to grant a loan to this group of people, special loans without credit rating are represented on the market. Either no information is obtained from credit at all, or the result plays no role in lending for older or paid-off entries.
However, since it is a requirement from the major banks to obtain information from credit and to implement the results obtained from it, the credit-free loans are passed on to citizens via small banks or foreign banks where these guidelines do not exist.
Therefore, one speaks very often of loans, since the main providers can be found here. For existing debts or legacy issues, these costs should be avoided if avoidable.However, it should be noted that the loans are subject to higher interest rates and that there will also be costs for the conclusion and brokering.
Requirements for the loan without credit rating
Since credit information does not play a role in a loan without credit rating, the lenders will use other checks to check the creditworthiness of the customers. Current income, expenses and personal circumstances such as marital status and children are very important here so that the loan can also be paid out without credit rating.
Again and again, various tables can be found, which the new customer can use to see in advance whether the income is sufficient for a loan to be approved. But no one should be sure that a credit approval will also be granted if the income is sufficient.
Conditions for loans without credit rating
Since the lenders of the credit-free loans do not have a large security for their money, the loans are always charged with particularly high interest rates. Interest rates of 10 percent are not uncommon for loans without credit rating. However, the interest rates are not really beneficial for the people who use this form of credit because they cannot get another loan because of financial difficulties.
But it is, through a comparison, to find the providers who offer a loan without credit rating at lower interest rates. Here, however, it must be noted that some loans are only granted up to a maximum amount or the term is limited. The borrower must also pay borrowing costs to apply for the loans. In addition to a closing fee and the processing costs, there are always costs for arranging the loan; the commission.
Particular caution is required with providers who guarantee lending with an upfront payment. The customer should transfer an amount of money in advance to cover the costs. But after the money is received, the so-called lender will no longer report. In order not to fall for the black sheep of the branch, no prepayment should be made.