How big the chance of a loan is despite a negative credit bureau entry

Almost every third German citizen has at least one negative Credit Bureau entry. But this population group also needs loans for urgent purchases. This article tries to clarify how big the chance of a loan is despite a negative Credit Bureau entry.

No branch bank grants credit despite a negative Credit Bureau entry.

The reason is simple: The German banking system relies on the information provided by the protection association for general credit protection (Credit Bureau). The information is crucial for the institutions to assess their creditworthiness. A visit to the house bank and other branch banks can therefore be described as hopeless, because the institutes all work according to the same rules. Only very few institutes are interested in the reason for the entry, with which special conditions such as the inclusion of a guarantor or other collateral can possibly be agreed.

The Internet offers opportunities for credit despite negative Credit Bureau entry.

The chances look better online, there are several options here. As long as the borrower can provide a permanent and permanent job that also has good income, lenders from neighboring countries offer themselves. The Swiss banks, for example, grant loans of up to $ 5,000 immediately and without any problems if the above conditions are met. Unfortunately, the loans that can be obtained with a negative Credit Bureau entry are not the cheapest. The foreign institutes also rate the risk of Credit Bureau-free loans higher and take more interest accordingly.

There is credit from private individuals despite negative Credit Bureau entry.

Especially in times of low interest rates, many private individuals are willing to lend their money to others. Lenders and loan seekers meet on specially designed internet portals and can negotiate interest rates there if they are interested. If a fixed income can be shown and the Credit Bureau entry may only have been made due to carelessness, the chances of a loan on fair terms are particularly high here. For more detailed information on personal loans despite a negative Credit Bureau entry, sites such as Lite Lender or Astro Finance are recommended.


Loan a loan: how it works

When can the loan be redeemed early?

Contracts for loans, like all other contracts, also have periods of notice, which must be observed in the event of early redemption. Installment loans can usually be terminated six months after payment with three months’ notice if they are signed before June 2010. Under EU law, younger installment loans can be terminated at any time without notice. Check your loan contract.

Real estate financing, on the other hand, is more difficult to cancel because such contracts run at least until the interest rate is fixed. That means at least over the period in which the interest rate to be paid is contractually fixed.

Redeem overdrafts

The easiest way to get a loan is with overdraft facility, which you use with your checking account whenever you “overdraw” it, so to speak. To pay off a overdraft facility, all you have to do is clear the current account. If you often exhaust your bank’s overdraft facility and find it difficult to make up for it in a timely manner, an installment loan as a debt rescheduling is a cheap alternative. If you are in the red for a longer period of time, you pay high interest costs on your overdraft facility – often over 10 percent. With an average of 4 to 5 percent a year, an installment loan is considerably cheaper. With the money made available from the installment loan, you can conveniently redeem your overdraft facility by simply transferring the money to your account and ultimately paying less interest.

Repay installment loans

Repay installment loans

The repayment of the installment loan, which was taken out, for example, for car financing, is also easily possible by rescheduling to a cheaper loan. Several current loans can also be replaced by a larger and cheaper installment loan. It is important that you always have savings in the end. Inquire with your bank about the amount of the remaining amount so that you can easily repay it with a better prepared loan by rescheduling. The same conditions apply to the credit line, which is usually cheaper than a credit line, but more expensive than an installment loan.

Loan building loan

Loan building loan

The loan repayment of a mortgage loan is heavily dependent on the terms of the loan. Is it a building loan or a building loan with or without fixed interest rates? It is usually not a problem to replace so-called variable loans. There, the interest is not fixed for a certain period of time.

However, if a loan has a fixed interest rate, you have to rely on the lender agreeing to prematurely repay the loan. In most cases, this option comes with paying a prepayment penalty. You must take these costs into account if you want to redeem the loan early. The same applies to debt restructuring if you want to replace the old loan with a new one. Always include the prepayment penalty and check whether the early redemption is really worthwhile.


Fixed rate loan – comparison, calculator, definition

Most of the fixed-rate loans in Germany are concluded in the area of ​​housing finance. In most European countries, only the variable interest rate on the loan is known in this area. Fixed-rate loans, on the other hand, have a long history in Germany and underpin the security concept of the Germans with regard to the financing of their own home. But fixed-rate loans also have their pitfalls. We compare these and the general characteristics and design features of a fixed-interest loan in our comparison:

Special repayment, full replacement and non-acceptance

In the meantime, it is common for bank customers to be granted special repayment rights up to a certain amount per calendar year in the loan agreements. However, this is not done automatically, but only at the customer’s request. The old contracts may not provide for special repayment rights.

If no special repayment right is provided, it is almost impossible to repay the loan in addition to the contractually agreed repayment rates. The bank is not obliged to accept all or part of the early repayment. The reason for this is the contractual agreement regarding the term and the repayment modalities.

There are only a few cases when a bank customer can partially repay or completely redeem his fixed-interest loan. This includes, for example, the sale of the financed property.

This was decided with a BGH judgment. The banks derive from the judgment that the borrower’s special benefit does not have to be accepted for all other life situations. The BGH has failed to adequately substantiate situations in which a bank, for example, has to accept full replacement.

But what has been sufficiently substantiated is the mathematical calculation of the financial damage that a bank incurs in the event of early redemption or special repayment. The bank incurs the damage whenever the repaid loan can be extended or invested at significantly worse terms than the terms originally agreed in the contract. The comparison is based on an interest curve, which the BGH has specified for all banks for such cases.

Quirky is also the fact that credit institutions can charge money if the loan is not drawn during the term. So if you only want to secure a loan in advance and only later decide on the possible drawdown, you should take into account that a high prepayment penalty must be paid in the event of non-acceptance.

Adjust interest rate

Adjust interest rate

Since the interest agreement is fixed, it cannot be changed during the agreed period. Even if market interest rates have fallen in the meantime and the bank could grant a new loan with an identical margin, no bank will accept interest rate adjustments during the agreed fixed-rate period.

This is because the contractual arrangement applies to both sides. The bank also has no right to adjust lending rates when interest rates rise. This situation is annoying for borrowers who took out their loans during a high-interest phase when interest rates have fallen in the meantime. If you expect interest rates to fall, you should either only enter into short fixed-rate commitments (for example, only one year) or make your loan a floating rate.

Fixed rate loan can secure flexible financing

Fixed rate loan can secure flexible financing

Interest rates for building finance have been falling for years. Anyone who took out a loan with variable interest rates a long time ago should replace it with a fixed-interest loan now or at the first sign of an interest rate turnaround.

Loans with variable interest rates can be canceled at any time

What many do not know: the loans with variable interest, also known as Euribor loans, can be terminated at any time with three months’ notice – without prepayment penalty.

When is the best time for a replacement?

The best time to replace a floating rate loan with a fixed rate loan is when the first signs of an interest rate turnaround appear on the horizon. Our infographic below illustrates this: