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Financing without credit information: Are there options?

Negative credit rating entries preclude your credit request. The decisive industry scores for banks are so low that even credit intermediaries can no longer arrange loans despite a negative credit rating entry. In these cases, the financial service provider asked for help will recommend financing without credit rating from Lender Bank as a last resort.

The prerequisite is, of course, that no hard credit rating entries are found. But even if your credit rating file does not have any hard negative features, with a typical loan without credit rating you may not be helped at all. Apart from the relatively high interest rates (currently a little more than 11%), they are severely restricted in the choice of credit terms. The loans are always to be repaid in 40 monthly installments and above all: The loans are only issued in amounts of USD 3,500, USD 5,000 or USD 7,500.

With these relatively small amounts, many planned projects and acquisitions can often not be financed at all. If there are no other ways to get financing without credit rating information and without credit rating entry, you will ask. There are alternatives to the credit-free small loans. That is the good news. Unfortunately, the good news comes with bad news. These options are only feasible if you have certain collateral with which the banks can cover the entire credit default risk in the event of an emergency with little effort.

With life insurance for financing without credit rating

With life insurance for financing without credit rating

Life insurance policies are a good basis for financing certain projects without credit rating’s involvement. However, classic capital life insurance is particularly suitable for this. Modern forms of life insurance, such as fund-backed insurance products, are not suitable at all or are less suitable. Private pension insurance can also be used for financing without credit rating. However, if public funding is used or if the insurance is direct, this is not possible.

The way to a financing without credit rating leads via the loan of the capital life insurance or the private pension insurance. The advantage of a loan against a purchase is that the high final returns are retained. These are lost when a purchase is made and the policyholder only receives the current surrender value. When mortgaging life insurance, credit rating entries generally do not play a role or information is not obtained at all. A distinction can be made between two options for mortgaging capital life insurance or private pension insurance.

Bank deposits as security

Bank deposits as security

An alternative to securities credit is the assignment or pledging of bank deposits. All possible savings products such as installment savings contracts, savings books and other are considered. With bank balances there is no price risk that can limit the credit line granted. Borrowers do not have to fear any additional funding obligations. The willingness of the bank to lend will increase if the savings product is managed by the same bank. Discuss the credit rating question with the bank. Maybe the bank will want to get credit information if the interest is not paid from the savings. However, there is a chance that negative credit rating entries will not play a major role with bank deposits as security.

Private guarantees and loans

Private guarantees and loans

If you do not have any assets that are suitable as security for lending despite credit rating, you cannot represent financing without credit rating on your own. If you are not eligible for a credit-free international loan, you need the help of third parties. Guarantees are considered. You can also ask a solvent third party to take out a loan for them without appearing to the bank. In such cases, an internal agreement with regulations on the repayments and interest payments is recommended.

Finally, it is still possible to ask a friend, acquaintance or relative for a loan. It makes sense to conclude a written loan contract with agreements on the amount of the loan, the term, the repayment modalities and, above all, the interest rate. In order to avoid trouble with the tax office, the agreed interest rate must correspond approximately to the current market level. Financing without credit rating information: What options are there?

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