Loans without collateral – Loans without creditworthiness and collateral
When making a credit request, banks will scrutinize what collateral the borrower can offer
Only if these, as seen by the banks, are sufficient, will the loan be disbursed. The collateral on the one hand contains the income with which the loan repayment will be made, the Schufa query is also included. But further collateral can also be demanded by the bank if it is considered insufficient for the loan.
There will be no credit without collateral , but it can be kept as low as necessary. An income, because only then can the repayment of money done, everyone, no matter which providers have.
In general, it will come to providing collateral when a car loan or real estate financing is to be made
The banks can thus offer a very low interest to the customer, which will certainly be in the interest of the borrowers. For example, in the case of car loan, the vehicle registration document will have to be given to the banks, so that the bank is legally in possession of the car, as long as the loan is not completely repaid. When real estate financing, the transfer of rights with the entry in the land register of the property by the banks. This collateral gives banks the right to sell or auction the loan if the borrower no longer pays, so that a profit should cover the remaining loan amount.
For other loans, even for non-Schufa loans, banks will hardly ask for valuables as collateral today, as the cost of selling is too high and the costs are often not fully covered. However, providing collateral can increase the likelihood of a loan commitment and also significantly reduce interest rates. It should be noted, however, that a negative or bad Schufa can not be compensated by the additional collateral at the banks. The situation is different with a low income. If a second borrower or guarantor is provided as additional security, the loan can be made possible and the interest can also be reduced.
So if you can offer banks little or no collateral on a loan, you should remember to increase it. There will be no credit whatsoever without collateral.