An installment loan is also possible
Unfortunately, taking up an installment loan without creditworthiness remains wishful thinking in banking. Lenders must adequately secure their issued loans to guarantee their own profitability and thus their own positive balance sheets. A loan can therefore only be issued to the potential borrower if the borrower has the appropriate credit rating.
In the case of loans with a higher value, the creditworthiness must therefore be better than in the case of micro or small loans. Taking out an installment loan without a credit rating is simply not possible in banking. Lenders are not only obliged to adequately assess the borrower’s creditworthiness to ensure their own profitability, but also have to fulfill a moral obligation. By definition, people who do not have a credit rating before borrowing are already close to debt.
If a loan is then taken up for repayment without existing income, the debt and any reminder costs can quickly lead to over-indebtedness, which in the worst case can even result in the person’s personal bankruptcy. If a borrower knowingly has no credit rating, for example because there is no income, the only way out is a loan with a guarantee.
The guarantor’s creditworthiness is then included in the loan agreement, which is why an installment loan is also possible. In order for this to work, of course, you first have to find a person who is willing to act as a guarantor and who also has the appropriate credit rating.
Meet all conditions for the loan
Banks consider a borrower to be an ideal borrower if they can meet all the necessary conditions with absolute satisfaction. What sounds a little like an assessment in a certificate can also be viewed roughly. Ultimately, the borrower applies to the bank to borrow a fixed amount of money from the bank, which is why he has to meet certain conditions.
The installment loan without creditworthiness is therefore not possible, since none of the conditions was met with no creditworthiness. Checking Credit bureau, for example, is not uncommon in Germany, but even banks can get over a negative Credit bureau entry more easily if the borrower has a high secured income in return.
However, if the borrower could not determine any creditworthiness, there is no logical basis on which a reputable bank could issue a loan. If no guarantor is available, the person concerned can only try to get a short-term financial injection via a private loan. Of course, to do this, of course, liquid and willing people must first be found in the private environment.