Credit without proof of creditworthiness

The inquiry to credit rating can be described as proof of creditworthiness, as can proof of sufficient income to repay the loan. Such is generally required if the loan is not covered by collateral.

Lending without proof of credit

Lending without proof of credit

A loan without proof of creditworthiness in the narrower sense can only be said if the lender neither obtains credit rating information nor checks the ability of the credit customer to properly repay the liability. The loan without any proof of creditworthiness generally requires the provision of collateral and is customary in the pawnshop. Insurance companies also offer their customers a credit without proof of creditworthiness by loaning an existing insurance contract.

Unsubsidized life insurance and private pension insurance are suitable for mortgage lending, whereas contracts are not suitable as collateral because this use leads to the recovery of allowances and tax benefits. Customers also perceive a new order for payment in installments from a mail order company as a credit without proof of creditworthiness, since the latter only requests proof of earnings in the case of large amounts and only makes a credit rating request once when placing the first order.

In fact, however, the merchant uses his customer’s previous payment behavior for an internal credit check. Once credit has been granted, the credit card’s credit limit can be used again at any time without further proof of creditworthiness.

The loan without credit rating

The loan without credit rating

A credit rating-free loan is often advertised as a loan without proof of creditworthiness. In fact, however, the federal credit institution uses strict criteria to check the applicant’s creditworthiness against the income and security of the existing employment contract, taking into account only the earnings from the main job. Any existing negative entries with the credit rating do not actually affect the loan, since the bank cannot submit a credit rating request.

However, it limits the amount of the loan to USD 3500 to a maximum of USD 5000; larger amounts are only awarded through a credit broker. It is not possible to take out several loans from different banks because an inquiry is made. Comparable to credit rating, this collects data on loan agreements concluded.

Credit despite receiving sickness benefits

 

Sickness benefit is linked to the six-week continued payment of wages and amounts to seventy percent of gross, but no more than ninety percent of net income. Households that get on with their money often need an additional loan to bridge the sickness benefit, which is often rejected by the requested financial institution.

Borrowing from commercial banks while receiving sickness benefits

Borrowing from commercial banks while receiving sickness benefits

Even if the resumption of work and, as a result, the re-payment of the previous wages is expected, financial institutions are reluctant to request a loan despite receiving sickness benefits. With automated loan application processing, in particular, they often consider sickness benefit as a temporary cash access, while they do not take current wages into account because the customer does not receive this for a loan at the time the application is made. Banks also see a certain level of uncertainty as to whether the sick employee can actually return to work.

In order to successfully apply for a loan despite receiving sickness benefits, applicants choose a bank that takes into account the special situation and in particular the wages that will come back later, and if possible attach a medical forecast to their application about the probable time of resumption of work. Often, at the beginning of their illness, employees recognize that their ability to work lasts longer than six weeks. You can therefore avoid a loan despite receiving sickness benefits by submitting the loan application while still receiving the usual continued payment of wages. If employees can already foresee the time of recovery, the salary to be expected soon can be stated in the case of an immediate loan without proof of income despite the sickness benefit.

Take out personal loan while receiving sickness benefit

Take out personal loan while receiving sickness benefit

As an alternative to a bank loan, borrowing via a platform for arranging private loans is available as a loan despite receiving sickness benefits. The lenders registered there largely make their decisions based on social criteria and subscribe to the requested loan from a sickness benefit recipient, precisely because conventional credit banks do not classify sickness benefit as a secure income. The platform operator is responsible for the loan disbursement, so that private borrowers and lenders do not learn their mutual bank and contact details.