First and foremost, a loan without a Credit bureau is used for credit-independent credit. But this assumption is fundamentally wrong. If a credit standing independent credit in the conversation means nothing else than that the interest is assigned independently to the creditworthiness of the borrower. A credit check is still taking place.
The requirements for a credit-independent loan
To get this loan, the borrower must have a certain credit rating. The respective banks decide according to internal guidelines how good the creditworthiness must be. Basically, people are considered creditworthy if they can prove the following:
- a secured income
- a resident in Germany
- a reasonably positive credit rating
- a permanent employment
- continuous repayment of installments
The documents and requirements for the credit-independent loan are identical to dependent loans. The personal details should be filled in conscientiously and truthfully during the application. On the one hand, because they may need to be proven and, on the other hand, because consumers would otherwise be prosecuted in the event of a review.
Optimal interest rate for low-income persons
Basically, the credit-independent loan is more suitable for low-income borrowers. In most cases, the credit rating is just enough to make a loan.
The Benefits of a Loan-Independent Loan
- the displayed effective interest rate does not change
- good lending rates even with moderate credit rating
- high transparency in setting the interest rate
In days gone by, the house bank was the first port of call when a loan was needed. Today, dozens of banks lure their customers with attractive offers and conditions. Preferably via the internet. For the borrower that means a lot of effort. The institutions and their offers must be scrutinized to find the best deal.
Already at this point the independent credit begins to be advantageous. As a borrower, it is easy to see which interest rate has to be paid to the bank. The exact interest rate on ordinary loans will not be known until the bank’s personal offer flutters into the house. This is dependent on the credit rating. In the case of independent loans, the consumer learns directly when applying for the amount of the interest. In addition, the interest rate structure is disclosed very transparently by the banks.
5 tips to successfully conclude a credit rating-independent loan
Tip 1: Update the Credit bureau data
Once a year, consumers can get a free listing of their entries from Credit bureau. If possible, this step should be taken a few months before applying for the loan, as Credit bureau updates the score only every three months.
Tip 2: Choose the right runtime
The longer the term, the higher the risk that a borrower will become insolvent for whatever reason. In addition, interest rates usually increase with maturity.
You do not have to worry about credit-independent loans at this point. Nevertheless, the runtime should be optimally chosen. Too short a term can cause the borrower to be in debt due to the amount of the installments. Too long a term can reduce the chances of getting a loan.
Tip 3: Beware of Credit bureau-free loans
Credit bureau-free loans are currently being offered online. Most applicants do not receive the requested loan. In return, they pay questionable fees in advance. Examples include his advisory or agency fees or high fees for the mere service of the application.
Tip # 4: Avoid high disbursements and installment payments
At first glance, a high metering point sheds a good light on the consumer. It only becomes problematic when the credit line is over-pledged frequently or very heavily. Excessive disposition has a negative impact on creditworthiness.
Tip 5: Cancel Unused Accounts and Contracts
Everyone has a checking account. Many consumers tend to create more accounts before they apply for credit, which they do not use at all. For example, another current account, because entrepreneurs have that as well. Also the possession of several credit cards connects the consumer gladly with the “well earning” fellow humans.
A credit independent loan is a loan where all credit customers pay the same interest rate. It therefore differs from lending to credit-related lending rates, where the interest rate is set separately for each customer. The non-credit-standing bank loan is also known as a fixed-rate loan. The term “fixed” in this case refers to the fact that all borrowers pay the same interest rates. The fact that the lending rate is unchangeable during the term is already part of the essential features of a consumer credit.
Effective interest rate
Lending at equally high interest rates refers to identical repayment terms. When lending for a particularly short or unusually long period, an increase in the annual percentage rate of charge is common. With a short loan term, most banks choose this measure because they need to reduce the costs associated with each loan to a few.
What is credit-independent?
Correctly, the banks would have to speak of the credit-independent interest calculation. For the granting of the loan or the rejection of the loan application, the creditworthiness of the applicant is decisive in each case. The basic requirements for a loan payment consist of a Credit bureau statement without negative entry and a sufficient income for the monthly repayment. Most financial institutions also require that the borrower is in permanent employment.
For which borrowers is the credit rating-independent interest calculation advantageous?
In principle, credit applicants with average creditworthiness will receive the desired loan at a favorable interest rate if it is the same for all customers. With an above-average credit rating, however, the interest calculation according to the personal creditworthiness is advantageous. The credit rating of the bank usually takes into account the Credit bureau score, without this being simply taken over.
The advantage of lending at identical interest rates for all customers
Lending at fixed interest rates makes loan offer comparison easier. For credit-independent loans, every prospective customer immediately sees what interest rate he has to pay. However, in the case of an interest calculation dependent on the personal creditworthiness of the individual customer, the interested party must first submit a non-binding condition request so that the bank can inform him of his personal effective interest rate.
This approach not only complicates the credit comparison, but is also associated with a stumbling block with regard to the Credit bureau score. Not a few credit seekers inadvertently submit the interest request as a loan request instead of a request for a quote, thereby temporarily worsening their Credit bureau score.
What type of lending is common today?
While lending at fixed interest rates was common practice for all borrowers a few years ago, more and more banks are moving on to individual interest rates. Nevertheless, it is still possible to obtain a credit standing independent loan from a bank. The loan calculator allows the setting to display only loans with a fixed interest rate in a comparison. Unlike traditional financial institutions, when financing through a trader, lending at identical interest rates is still common to every client, often without interest.