Do you urgently need money, but are no longer getting a loan? In such situations, it is important to keep a clear head.
Avoid making one loan request after another. As a result, your credit rating only deteriorates for a short time.
It is better to understand the reason for loan refusal. If the bank does not voluntarily provide you with the reasons for the loan refusal, ask consistently.
Depending on the cause of the lack of creditworthiness, certain measures can be taken that make short-term crediting possible.
No income or low income from employment
As security against credit default risks, banks require proof of a regular, permanent income, which guarantees the repayment of the loan applied for.
With installment loans from direct banks, the silent assignment of earnings is often the only security.
When is an income sufficient?
First, it must exceed the garnishment exemption limit. For people without maintenance obligations, this is currently around 1,200 dollars.
In addition, the bank must be convinced, based on a household calculation drawn up according to internal criteria, that after deducting all living expenses, its customer has enough free funds to be able to service the loan.
If the loan request fails due to insufficient income, you have the option of adapting the conditions to your income. This happens in two ways.
You can choose a longer term to reduce monthly installments. However, this increases the overall cost of the loan.
You can settle for less credit.
You can combine both measures. A combination is probably the path that most promises success.
If you do not have any income from employment, but instead receive wage replacement benefits such as unemployment benefit or Good Finance, then lending is excluded.
Having the loan taken out by a third, solvent person (surety!) Is the only way.
If your income is below the attachable income, you will not receive a normal installment loan yourself. You are dependent on solvent guarantors or co-signers.
However, there is an exception for so-called mini loans or short-term loans.
These are loans for very small amounts – usually only a few 100 dollars up to a maximum of 2,000 dollars. The terms are between a few days and six months.
Short-term loans are extremely expensive, especially when there are additional costs for express functions and installment payment agreements.
Traders and freelancers are still not welcome credit customers at banks. This is especially true for direct banks, whose loan offers are mostly aimed exclusively at employees.
Banks assume increased credit risk for the self-employed because there is usually irregular and/or uncertain income. The credit check is also time-consuming.
Self-employed persons have to submit documents such as income tax notices or annual financial statements for longer periods.
A loan is often linked to the fact that the self-employed activity was carried out for at least three, sometimes even five years.
Before you request a loan from a particular bank, find out exactly what the lending requirements are.
Additional collateral increases the willingness to borrow.
Few direct banks are willing to lend to the self-employed at all.
The German credit broker Good Credit offers an attractive loan for the self-employed from the first month of self-employment. There are no upfront costs at Good Credit.
Trial period or fixed-term contract
Banks do not grant loans if they can expect the assigned security to fail.
This can be the case both for a loan during the trial period and if there is a temporary employment contract.
If you are in the trial period, you will not receive a loan yourself without a guarantor or co-signer.
The situation is different from a temporary employment relationship. Many banks also grant loans for fixed-term contracts; however on one condition:
The term of the loan applied for must not exceed the duration of the employment relationship.
Falling below or exceeding the age limit
People under the age of 18 do not regularly get a loan themselves. Falling below this age limit is an absolute reason for exclusion.
When it comes to exceeding a certain age limit, things are a bit more complicated.
Most banks accept loan applications from pensioners without specifying a specific age limit.
At least internally there are. In order to avoid the allegation of discrimination, the focus is not on age, but on the increased credit risk associated with age.
Is the repayment of a loan with a term of five years with a 75-year-old applicant still guaranteed? Or is the risk of default too high?
In this way, banks come to different age limits. Most of these age limits are between 70 and 72 years. Older customers no longer receive credit from the outset.
Loans without SCHUFA are generally only granted to customers who are not older than 60 years.
Before you request a loan from a particular bank, check the guidelines carefully.
An inquiry is only worthwhile if you do not fall under the age limit.
Adjust your loan request to your age. Do not choose excessive loan amounts and short terms.
Dubious bookings in bank statements
Banks usually expect the bank statements of the past few months. Most of the time it is 2 to 3 months. Why?
Before the credit decision, the bank statements are checked for dubious postings. This primarily concerns return debits or bookings from debt collection companies.
Of course, both processes signal an increased credit default risk and perhaps even over-indebtedness. Often there are return debits only if an overdraft facility has already been overdrawn.
If there is over-indebtedness, borrowing is not advisable.
Instead, expert advice on debt restructuring should be sought to avoid bankruptcy if necessary.
In other cases, a loan application can succeed after a few months, though
- the circumstances underlying the return debits or the bookings of debt collection companies are corrected,
- dubious postings are no longer visible on the bank statements to be newly submitted,
- there are no pending SCHUFA entries from these matters.
Existing liabilities, overdraft facility
Loans that have not yet been processed can cause banks to refuse the loan request, even if their creditworthiness is otherwise good.
The reason: the new loan may no longer have sufficient transferable income. So the income is too low to take out another loan.
Overdrawn overdrafts are a bad sign of customer reliability. In such cases, banks assume an increased risk of default.
If your income does not allow any further borrowing at all, i.e. if your economic capacity is no longer sufficient for further loans, you will never get any credit.
In other cases, an adjustment of the credit conditions can be the solution.
If necessary, it is advisable to pay off the pre-debt and take out a new, uniform loan.
If the overdraft facility is excessive, banks may no longer be ready to lend, even though the income would actually be sufficient.
There is an emergency solution here. Taking out a loan without SCHUFA can help in individual cases.
Missing or incorrect information in the credit request
Even small mistakes in the loan request can cause banks to refuse the loan.
It is particularly important to state your income and liabilities in full.
Don’t forget any outstanding liabilities.
Also, provide leasing contracts and credit lines.
Consider any additional income you may have earned.
Bad SCHUFA score and negative characteristics
For many banks, low score values and negative characteristics are grounds for rejection. Loans despite a negative SCHUFA are not entirely impossible, but also not easy to obtain.
The best thing to do is to prevent preventive measures from creating problems.
Obtain self-disclosure annually to determine your score.
Correct incorrect data and convert unfinished SCHUFA entries into completed by balancing the underlying claims.
Pay all undisputed claims in good time and in accordance with the contract.
Avoid too many individual loans, even if it is zero-percent financing.
Debt several small loans into a single loan in good time.
If the child has already fallen into the well, the following applies:
Hard SCHUFA entries rule out any lending. Affidavits, warrants or bankruptcy are absolute grounds for exclusion from credit.
If there are soft negative characteristics, there is a credit opportunity in certain cases.
Credit brokers such as Good Credit provide their customers with loans for completed negative features, or for non-serious negative SCHUFA entries, the emergence of which customers can explain.