Loan without income: feasible or misleading consumers?

Are you looking for credit with no income? They assume that such loans are almost impossible to get.

After all, your house bank has already rejected a corresponding loan request, just with an indication of insufficient income.

Now you are probably surprised at a large number of search results on Google when you enter terms such as credit without income, credit without proof of income or credit without proof of salary in the search mask.

You will find 250,000, 39,800 and 32,300 search results for the search terms listed above (as of October 25, 2017, 6:30 pm).

Unfortunately, you will soon find that your initial assessment was correct. The articles listed under the relevant search terms are carefully ambiguous.

A lot more is promised than kept. Here are the facts


In the banking industry, income is usually understood to mean income from employment relationships, from self-employment, as well as salaries to civil servants and pensions.

Some banks add child benefit to income.

Proof of income is written evidence of this income:

Payslips for employees, income tax notices, annual financial statements, business evaluations for the self-employed, pension notices, child benefit notices, salary notices for civil servants.

Accordingly, all other income such as unemployment benefit, Good Finance, income from maintenance payments and other social benefits are not income.

Salary is the salary that workers and employees receive in the private sector or in the public service.

So when it comes to loans with no salary or no income, it does not mean that loans are offered without any income.

Rather, it is mostly a question of how consumers who do not have sufficient income or salary in the sense described above can still get credit, possibly with the help of third parties.

No consumer credit without income and without evidence from the bank

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There are simply no bank loans as consumer loans for consumption purposes without income, proof of income or proof of salary

Income checks are an essential part of the credit check at all banks.

In this way, banks hedge against credit default risks using credit scores. You are also legally required to check creditworthiness before lending.

Sometimes you read the note that an income check is not necessary if the borrower can provide special security.

This is not the case with consumer loans, especially direct bank loans. Because the usual security is the silent assignment of salary claims.

Whether the salary is sufficient as security can only be determined on the basis of evidence such as payslips and/or bank statements.

However, additional collateral can increase the bank’s willingness to lend or improve conditions if income is low but still above the garnishment-free limit.

Additional security is often a prerequisite for lending at all for self-employed and businesspeople because regular income is often not ascertainable.

Often recommended: provide guarantors

Often recommended: provide guarantors

The recommendation to provide a guarantor or to include a co-applicant in the loan application is often read.

Most of the time, it is about applicants who have a certain income but do not have sufficient income or salary: unemployed, trainees, Good Finance recipients, students, for example.

Strictly speaking, a construction with an unemployed applicant and a guarantor or co-signer is eyewash. In economic terms, the guarantor or co-applicant is always the actual borrower from the bank’s perspective, and that alone.

The third person entering the credit agreement must meet all the lending requirements including sufficient creditworthiness alone. The creditworthiness of the guarantor or co-signer alone is decisive for the loan terms.

Reputable banks therefore explicitly advertise with loans without proof of income but not with guarantors.

Some financial service providers like the credit intermediary E-Money see it differently. They explicitly offer no income loans with guarantors.

This does not mean that E-Money is a dubious credit broker. The loan broker is a reputable financial service provider who works without any upfront costs.

However, it is more than questionable whether E-Money accepts people without any income as “formal borrowers”.

House banks will also sometimes provide guarantees to do good customers a favor. Example:

The parents guarantee a driver’s license for their adult son, who is still in training.

This gives the son the feeling that he is responsible for financing his driving license. He is held responsible for the loan repayment.

On the other hand, the bank is protected if the loan is not repaid.

Mini loan without proof of income

Mini loans or short-term loans are micro-loans with very short terms, up to a maximum of 60 days. The loan amounts for first-time applicants are usually no more than a few hundred euros.

The special features: the loans are repaid in one amount at the end of the term, the interest is at the overdraft interest rate level and so-called express functions that accelerate the loan disbursement are extremely expensive.

Finally, you can find other credit-like constructions on the Internet under such exciting names as, for example, a special cash program.

The “borrower” concludes without proof of income but with positive Credit Bureau mobile phone contracts. However, he does not receive cell phones, but cash (the device subsidy). The term of these products should be two years.

Everyone can assess for themselves what to think of such offers.

Credit from P2P credit exchanges

Credit exchanges like E-cash do not necessarily require proof of income. However, there are hardly any private donors who are willing to invest in a loan request if there is no information on income.

In other words, proof of income does not have to be presented, but then there is no credit opportunity either.

Credit exchanges can be an alternative to a bank for the self-employed.

This is especially true if self-employment has not been practiced for a long time in order to convince a bank of the regularity of the income generated.

Pawnbrokerage as a way out

No proof of income or salary is required for a pawnshop.

The pledged item is handed over, its value is estimated and a percentage of it is paid out as a loan.

At the end of the maximum term of three months, the loan granted plus interest and costs incurred must be repaid. Otherwise, the pledged object is disposed of in accordance with an orderly, legally prescribed procedure.

All objects of value can be lent: jewelry, antiques, valuable furniture, valuable watches, for example, or even motor vehicles.

The pawnshop is suitable for bridging short-term financial bottlenecks.

Policy loan: an advance payment on the term benefit

Policy loan: an advance payment on the term benefit

Policy loans are granted by insurers and policy buyers who operate in the secondary market.

Capital life insurance is a prerequisite. Traditional insurance products are best suited and not the new fund-based life insurance policies.

Policy loans are actually not loans, but advance payments on the expected maturity.

A certain percentage of the current surrender value is paid out.

In the case of policy loans, Credit Bureau information is generally not obtained, and proof of income is not expected.

Special collateral loans

Real estate, securities, annuity contracts, life insurance – such collateral can facilitate bank loans with low incomes.

Another question, however, is whether this collateral will lead banks to completely forego proof of income.

The easiest way to do so is to refrain from providing evidence for securities loans because exchange-traded securities can be realized in seconds and the lending limits are regularly set in favor of the banks.

In the case of other collateral such as real estate, however, recovery is complicated and sometimes involves great effort for the bank. There will hardly be any real estate loans without proof of income.

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