Loan despite private credit with guarantor
February 28, 2019
A negative private credit entry complicates the borrowing, since only a few financial institutions in this case are willing to lend. A hard negative feature even excludes these completely. Only Intrasavings Bank only excludes applicants for lending who had to file personal bankruptcy for most funding programs. However, the least planned acquisitions meet the criteria of a promotional program, so that consumers are dependent on the loan application through an ordinary bank. In this case, the search for a loan offers, despite private credit with guarantors. The number of eligible banks is lower than simple lending, as not all financial institutions accept guarantees.
Loans without and despite private credit differ
The distinction between a loan despite and a bank loan without private credit is simple, but not common to all consumers. In the case of a loan without private credit, the lender, which is mostly a Swiss or a Liechtenstein bank, does not submit a private credit request and at the same time does not report the borrowing to the German credit guarantee. Such loans can be applied for independently of the negative entries contained in the private credit information. However, they are limited to amounts of 3500 or 5000 euros.
In the case of a loan despite private credit, however, the bank executes a private credit request. It forgives the loan, although the credit report contains a negative entry. In a single soft negative private credit entry individual credit institutions are willing to lend. However, they usually require high interest rates. A cheaper alternative is the loan despite private credit with guarantor, in which the credit rating of the credit bureau causes the approval of the loan request. The interest rates of these loans are lower because of the lower risk of default than in the lending despite a private credit entry and without the provision of a guarantor.
The guarantee and the appropriate guarantors
Banks insist on a self-enforceable guarantee in the case of a loan, despite private credit and his guarantor. In this case, the bank can already turn to the credit bureau, as soon as they have certainty about the missing payments by the borrower. Without a special agreement, which the bank almost certainly demands, the deficiency guarantee is the basic form of a credit guarantee. In this the guarantor is liable only after futile coercive measures against the loan customer. In the case of each guarantee, in addition to the loan agreement, there is an additional contractual relationship between the borrower and his guarantor. This means that the loan customer owes the loan to the amount that he has paid to the financial institution. The guarantor thus has a right of recovery, which can rarely be enforced in practice.
As a guarantor, every person with unlimited legal capacity is suitable. However, the case law places high demands on the lender regarding the verification of the economic performance of a guarantor. These are exacerbated when there is a strong emotional bond between the applicant and the credit bureau. Credit banks thus risk that courts in a loan, despite private credit with guarantors, the guarantee in the claim as ineffective. For this reason, when the proposer proposes his partner or close relative as a banker, banks often recommend joint borrowing as an alternative.
This is particularly advantageous for the lender, since he only has to make the usual demands on the economic performance of the second borrower. It is absolutely necessary for both a guarantor and a co-borrower that his private credit information has no negative entry. The selection criteria for a loan despite private credit with guarantors are those of a consumer loan with a positive private credit.The loan should be associated with the lowest possible APR and flexible repayment possibilities. The most important thing for a loan, despite private credit and its guarantor, is the right to suspend once a year at a repayment installment. This clause reduces the risk that the credit bank will use the guarantor due to irregular payments. The right to free special repayments is rarely used by borrowers for a loan, despite private credit and his guarantor. Nevertheless, it makes sense to repay the loan early in the event of unexpected additional income.
Are organized guarantees an alternative?
For the lender, insurance companies and other commercial guarantors are more advantageous than private credit guarantors in the case of a loan, despite private credit and his guarantor. The risk of an ineffective guarantee due to underperformance or the inability to understand the scope of its explanation is excluded in the case of a commercial guarantor. Loan seekers with negative private credit, however, have little chance of obtaining the guarantee of an organization.
The fact that this is associated with costs in contrast to a private credit guarantee represents another disadvantage. First and foremost, the guarantee insurers usually only accept customers with positive private credit information. An exception is made by applicants, who prove that their financial situation has improved since the forfeiture of the private credit negative contribution. Particularly in the case of negative entries marked as deleted, which, unlike almost all banks, rates the credit protection as neutral features, there are legitimate prospects for a loan despite negative private credit with guarantors, in which a guarantor takes over the function of the credit guarantor.