Getting credit – what are the requirements?
You usually get a loan from the bank. To do this, fill out a loan application and submit it to a bank of your choice. In order to receive the cheapest possible loan offer, it is worth comparing several offers in advance. The submitted documents will then be checked. It is important for the bank that the applicant can repay the money within a reasonable period of time. For this reason, creditworthiness and creditworthiness are particularly closely examined. Anyone who has a good income, is debt-free and has no negative Schufa entry has nothing to fear. The risk for the bank is very low in this case, so that nothing stands in the way of lending. You should only be at least 18 years old and have both a home address and a bank account.
However, if you are not quite as liquid, it will be more difficult. However, most people get a loan even if the conditions are not quite optimal. The bank then only needs more collateral that is deposited in order to minimize the risk for you. Collateral includes works of art, cars or houses, i.e. assets that lose as little value as possible during their term. As a rule of thumb, the higher the loan amount, the more collateral is required. The bank is trying to keep the risks low. But even with poor creditworthiness, it is not impossible to get a loan. Here we give you tips on how to increase your chances.
Getting credit depends on your income
Income plays an important role in getting a loan. The bank determines the amount of a loan that is approved based on income. Permanent employment and completion of the trial period in the company favors that you get a loan. Before you apply for a loan, check how much of your income you can invest in a loan. After all, it is not advisable to get a loan to be able to afford a new TV or a remodeling, but gnawing at it. In addition, do not make too few calculations so that you do not immediately run into financial constraints in the event of unexpected events.
Get credit: what to do with low income?
If you don’t get a loan, it may be due to your low income. The bank then fears that the installment payments will fail and that they will not see their money again. We’ll show you a few things you can tweak to get a loan.
- Extend the term: If you do not get a loan, you can extend the term of your real estate loan. This reduces the monthly charge because the repayment is spread over several months. Remember that this also increases the interest costs.
- Reduce loan amount: Those who borrow less have to pay back less. Reduce your loan amount if possible. It will be easier for you to get a loan.
- Compare offers: It is worth comparing conditions for loans. Get several offers and compare them. A few tenths of a percent can save interest. Please note that the conditions such as term, monthly rate and extras such as special repayments should be the same.
- Determine guarantor: A guarantor is a person who is solvent and serves as security for the bank in the event of a default. If at some point you are no longer able to pay your monthly installments, the guarantor steps in. So you are both responsible for the loan and make sure that the repayment is made on time and in full. It does not matter who the actual contract holder is who got the loan. Parents, children or friends can act as guarantors, but also life partners and spouses. Propose a guarantor to the bank to get a loan if the loan is 18 years old and has a good credit rating.
If you don’t get a loan right away, it doesn’t mean it’s completely impossible. With the points listed there is still a chance of a positive credit outcome. It is best to speak to your bank or a neutral financial service provider like in size to provide tailor-made financing.