If you are single and have no children and you also have an acceptable income, you can take out a loan for single people from any bank. The income, the Credit Bureau and the permanent employment are the three approval criteria prescribed by the banks.
The single loan – an overview
Generally, a loan for single people can be approved provided that the single person meets the credit conditions. Banks understand this to mean an income that is above the garnishment exemption limit. The Credit Bureau must be impeccable, it must not contain any negative entries. A permanent and permanent job is required. However, problems can arise if the necessary creditworthiness is insufficient. Banks want collateral, they want the certainty that their customer can pay the loan back.
It is women who face discrimination in the labor market. Studies show that they still earn 18% less than men in the same position. The customer is free to choose where the single person loan is taken out. He can go to his house bank and apply for a loan there. As described above, the bank will check how creditworthiness and the Credit Bureau. If there are no abnormalities, the loan is approved,
But it won’t happen that quickly, because the bank, regardless of whether the house bank or the Internet bank, will draw up a so-called household bill. She will review the client’s income and expenses. If the test shows a positive balance, i.e. if there is a remaining amount, the credit for single people could well be successful on approval.
Every loan seeker should also draw up their own budget statements before applying for a loan. In this way it can be checked whether a monthly loan installment fits into the monthly budget. In addition, the rate should always be adjusted to the income. An affordable rate arises when the term of a loan is chosen to be a little longer. A short term brings high rates, but the loan is paid off faster.
If you accept the offer from the house bank without comparing it with another lender, you may be giving away cash. Because the branch bank does not always have the best conditions for the house bank, on the contrary, they have worse conditions than, for example, an online bank or a direct bank on the Internet. But ultimately this is the customer’s decision. Anyone who appreciates the personal conversation at the house bank will also select this when lending.
The financial situation of a single person can of course not be compared to that of a couple. The single person has only one salary, the couple can usually be presented with two incomes. Therefore, the income must be high enough to be able to pay a loan for single people alone.
The single family also includes, of course, single mothers, where children are included in the household bill. However, one should know that neither child benefit nor child support payments are counted as income by the bank. These payments are not attachable, that’s the only reason. Since these funds are not taken into account, a loan for a single mother can be refused because the actual income will then not be sufficient.
However, there are single persons who are considered to be single before the law, but still live in a partnership, so there is the possibility that the partner as a second borrower or as a guarantor also signs the loan for single persons. Here the bank should differentiate between what is single and what is living alone.
When single people get to know a partner and a cohabitation is established, a new apartment is often moved into and purchases have to be made. However, there could be difficulties with a new loan for single people that a loan must already be paid. A debt restructuring might make sense here. Both loans are merged and signed together with the partner.
The bank could possibly insist on a prepayment penalty, since it loses planned interest due to the early repayment of the loan. The bank would like to compensate for this loss with a prepayment penalty.
The guarantee and the residual debt insurance
If the situation is not sufficient, a loan could still be granted with a guarantor. The guarantor could come from the family, but it has to be solvent. The bank will examine this extensively. That would be the income, the permanent position and the Credit Bureau. If the characteristics are green, the bank will recognize the guarantor.
However, the surety must be informed in detail about the guarantee, which also poses a great risk. If there is a loan default on the part of the borrower, the guarantor must continue to pay the loan. Quite a few guarantees resulted in the guarantor being ruined financially.
If the income situation is not so generous, some banks insist on taking out residual debt insurance. However, the loan approval must not be made dependent on this. This insurance protects the borrower against sudden unemployment or a serious illness with subsequent disability, and it also applies in the event of death.
But these insurance companies have so-called pitfalls in the conditions. The insurance only pays if contributions have already been paid for six months and if the unemployment is not due. But these insurance policies are very expensive. The customer decides to what extent it is worthwhile. It would not be recommended for a small loan amount.
The bad Credit Bureau
If the single person has a bad Credit Bureau and needs a credit for single people, the Credit Bureau-free credit remains. Foreign banks from Switzerland and Liechtenstein offer loans to Germans who have negative entries in Credit Bureau. However, these loans are mostly processed through credit agencies.
The loan seeker must also meet conditions such as sufficient income and a permanent position. Three loan amounts are approved, 3,500 USD, 5,000 USD and 7,500 USD. The terms and the rate are standardized and cannot be changed. These loans are also more expensive than a conventional loan and should therefore only be taken out if there is an urgent need for money.