The creditworthiness of a customer is the approval criterion for a loan. Banks check the applicant's Schufa before approving any loan. If this has negative entries, the customer's credit rating is considered not special or even quite bad. This statement of the Schufa is binding information for banks, which in most cases leads to a loan rejection.
The information provided by Schufa shows the banks the payment history of the customer. Therefore, without a good credit rating, there will be no credit at regular banks, an instant loan with poor credit rating even less so. But that doesn't mean this group of people can't now get a loan to help eliminate the financial squeeze. Attention must be paid to other ways.
The instant loan with bad credit rating
If the creditworthiness is not sufficient, a bank will not grant a loan, the risk of default is too high for them. One way out of this precarious situation could be a guarantor. If the latter has a sufficient income and a clean Schufa, he can secure an instant loan with a bad credit rating. However, the guarantor should provide a guarantee only if he is in an economic position to cover, in addition to his obligations, the installments that may come to him from a loan default on the part of the borrower.
He should also be aware that signing a credit agreement is not a favor. This guarantee is entered in his Schufa, which can reduce his own credit rating under certain circumstances. The conditions for obtaining an instant loan with a guarantor with a bad credit rating are good. The same applies to a co-applicant, i.e. a second borrower. If the latter takes the instant loan in his name with a bad credit rating, according to his credit rating the loan will be evaluated and the credit decision may be favorable.
The foreign loan can be the solution
If a guarantor or a second borrower cannot be found, then a loan from abroad can be the solution. The advantage of this is that foreign banks do not use the services of the Schufa, also an approved loan is not entered in the Schufa. But these banks, which are mainly based in Switzerland, hence called Swiss credit, require a sufficient and regular income coming from a non-self-employed job. The employment contract must not be limited in time and must not be terminated.
The income to be presented must be above the garnishment exemption limit. These loans are secured with a wage assignment, which means if a loan is not paid correctly, immediate wage garnishment occurs. The tip with this form of credit is therefore to make sure that installments are received by the lender on a regular basis. If the aforementioned conditions for a foreign loan are not met, there will be no Swiss loan either.
As for the conditions of these loans, it must be said that they come with higher interest rates than the normal loans with Schufa. Also, an instant loan with a bad credit rating is usually offered through credit intermediaries. Therefore, the commission of the loan brokerage must be added to the higher interest rates, which makes the loan more expensive once again. Under these circumstances, it is advisable to wait with the loan until one's own creditworthiness has improved through a high income, perhaps through a new job.