The credit market offers very few opportunities to get a loan without collateral. No collateral means having no attachable income and no assets to secure a loan. A futile venture, one might think. But it is still not impossible to get borrowed money, even if you have no collateral.
A loan without collateral – how does it work?
One thing in advance: not without help. Because banks and other banks always expect collateral before they approve a loan. Although there are often quotes in the credit market which, at least apparently, do not demand any collateral, borrowers should refrain from doing so, because in most cases these are highly dubious deals that are all out of the plight of private individuals exploit bad credit.
The only way to get a loan without collateral from the bank is to find someone to secure the loan for you. There are two variants: co-applicant and guarantor. The co-applicant is directly from the conclusion of the contract with responsible, that payments of principal and interest paid on time and in the required amount. He is thus liable on his own and is involved in the contract from the beginning. The situation is similar with the guarantor, which is only asked to pay if the claimant himself can not meet this requirement.
Both guarantors and co-applicants must, in order to be accepted as such by the Bank for a loan without collateral, have to provide certain collateral. A good credit rating is therefore required. This means, first and foremost, that there is a secure, regular income available in sufficient amount to finance the debt service. This should also come as far as possible from a non-self-employed employment, as banks do extremely hard to accept self-employed and freelancers as guarantors. Of course, a credit bureau is required, from which no negative entry may arise. In plain language, this means that neither guarantor nor co-applicants may have existing credit obligations, unless their income is sufficient to absorb an additional debt service.
Credit for the study
A typical loan without collateral can also be found in student loans. Of course, this requires that the applicant is enrolled at a university of applied sciences or university in order to study there. Therefore, student loans can usually only be applied for up to a certain maximum age, which ranges between 30 and 35 years. The payment takes place in monthly amounts between usually 100 and 800 USD. In most cases, only the first degree course is financed, whereby regular proof of achievement must be provided. Student loans are intended to enable the student to study as quickly as possible, without having to work too hard on secondary jobs that leave the course itself. Banks often grant discounted interest rates, which is not least aimed at long-term customer loyalty.
The trade credit
A loan without collateral, which is completely independent of the training situation, can be claimed with a trade credit. This is usually awarded by dealers or cooperating banks. However, the amount of such loans is limited to the value of the purchased item. Collateral is rarely required because the dealer reserves the right to reclaim the goods should this not be paid as agreed (retention of title). A credit bureau is therefore required just as little as the presentation of payroll. However, this can be handled differently by each dealer and is not least dependent on the price of the purchased item.