Credit in difficult cases
Until a few years ago, the term “loan in difficult cases” was still a synonym for loan offers that could be classified as dubious from afar. Because every reasonably clear-thinking person should be aware that a loan is practically impossible in difficult cases. Any reputable bank or savings bank only lends money if it can be sure that the borrower can somehow repay the money. But if you are in big financial trouble, you will not be able to do it.
Fortunately, times have changed a bit and there are hardly any dubious credit intermediaries who offer loans in difficult cases and then only take advantage of the prospective customers. There are black sheep in every industry. But today the synonym “difficult cases” stands for a clientele that has financial difficulties but can get a grip on them.
When to speak of a loan in difficult cases
A loan in difficult cases is always spoken of today when, for example, loans already exist that are very difficult to repay. Or if direct debits are made because the monthly income is insufficient. The same applies if the credit card or the checking account is heavily overdrawn and therefore high interest rates are due for repayment. It can also be said of difficult cases when the private credit checker has negative entries and therefore the first credit inquiries have already been rejected.
All of this and much more can be classified as “difficult”. However, this does not necessarily mean that no loan is possible at all. This is because there are several prerequisites for borrowing that can be weakened by one or two negative characteristics, but which do not make the loan impossible. It is only important that the borrower adapts to the situation and uses the loan offers that work in such cases.
If the private credit checker is negative
If it is the private credit checker that stands between the prospective customer and a loan, this means that there are already outstanding liabilities that show up as a negative entry in the private credit checker. In such a case, a loan from a German bank will only exist if it is taken out together with a second borrower. However, he must be able to show a good credit to avert the negative features and improve the overall credit rating for borrowing.
If this is not possible, a foreign loan remains an alternative. This is mainly granted by banks from the small Principality of Liechtenstein and is based on a small loan. Since foreign companies have no access to the data of the German private credit checker, the private credit checker cannot be queried and can be considered an obstacle to borrowing.
A good income must be available for a foreign loan. In addition, the borrower must be a German citizen and have a permanent address in Germany. A small loan of up to 5,000 USD would then be possible, which must be repaid to the donor bank within 40 months. The monthly installments are quite low due to the long term, so the risk of default for the bank is manageable.
When there is debt
If there are debts that have not yet made it to private credit checker, but still weigh very heavily, a loan can be the last-minute rescue in difficult cases. Because if the credit can be used to summarize the debt in such a way that only one creditor remains, it will also be possible to significantly reduce the monthly burden on the borrower.
With an installment loan, not only the loan amount, but also the monthly installment can be determined. This means that the rate can be adjusted to the borrower’s budget in such a way that it can be settled comfortably. So it is possible to gradually pay off the debts and raise the creditworthiness back to a better level.