Difficult cases when searching for a loan exist if either a negative Credit Bureau characteristic is present or the applicant’s regular income is lower than the garnishment exemption limit. In both situations there are opportunities to borrow.
A single soft negative characteristic is not a reason for a bank refusal for every bank. In addition, Swiss financial institutions pay out their loans anyway without Credit Bureau participation. If the income is below the garnishment exemption limit, you can find a financial institution that is satisfied that the applicant’s earnings are sufficient to repay the loan. A loan is classified as a loan in very difficult cases if the loan seeker has both forfeited a negative Credit Bureau information and has a low or irregular income.
The credit intermediary helps with bank loans in very difficult cases
A loan can hardly be taken out in very difficult cases without a guarantor or co-applicant without the help of a credit intermediary. Corresponding advertisements can be found both on the Internet and in the classified ad section of the daily newspapers. The work of loan brokers makes sense, since they can often provide a loan, even in very difficult cases. Their extensive knowledge of the credit market and the strong buying power that they represent help them.
However, the borrower takes care that the intermediary works properly, especially in very difficult cases. This includes compliance with the legal stipulation that intermediaries may only charge an appropriately high success fee if the loan is actually paid out. When intermediaries request a payment that is independent of success or even upfront costs, they act dubious. In this case, there is a risk for the applicant that the supposed service provider only wants to collect the payment. A reputable credit broker, on the other hand, tries to get a loan successfully out of his own interest, since he only earns money if he succeeds.
He forwards the loan request to different banks so that the loan payment may be made through a foreign bank. Swiss and Liechtenstein financial institutions process all of the loans they have paid out in USD, while banks from other countries outside the USD zone use the currency valid in the bank country. When examining the offers for a loan submitted by the credit intermediary in very difficult cases, applicants make sure that the lending in some countries is also predominantly at variable interest rates, even for consumer loans.
It is not certain whether a guarantor or co-applicant can grant the loan to a domestic bank in very difficult cases. German financial institutions often refuse to lend in spite of providing a loan guarantee or a co-applicant if the main borrower has neither a good Credit Bureau nor sufficient income to take out the loan. As an alternative, the partner or another person with strong ties to the loan seeker can act as the sole borrower and pass the money on. This procedure is permissible, but is associated with a high risk for the official credit customer, since he is solely responsible for the repayment.
Alternatives to a bank loan in very difficult cases
The pawnbroker grants a loan even in very difficult cases, as long as his customer can deposit a sufficiently valuable deposit. A disadvantage of borrowing in the pawnshop is that it is only for small amounts and short terms. In addition, loan seekers often no longer have sufficiently valuable pledges in difficult situations. It is easiest for recipients of unemployment benefit II to get a loan in very difficult cases. The prerequisite for this is that they use the money to purchase an item recognized as indispensable. In this case, the employment agency even grants the loan without interest and offsets it against the payments made in the following months.
If the apartment is in danger of being lost due to existing rent debts and immediate payment aids the termination, the social welfare office can in principle grant a loan, even if the tenant concerned does not receive regular social assistance. Basically, for every purpose, a loan can be taken out in very difficult cases via a platform for brokered borrowing from private individuals. Some of them deliberately support loan applicants who are barely able to borrow from conventional banks. An essential decision criterion when applying for private loans is the intended use, the precise specification of which makes sense. The financial situation must also be described honestly.