If consumers have negative entries with credit record, they have little chance of an ordinary bank loan. These entries at the well-known credit agency result from payment failures, the credit record stores, for example, massive payment delays and foreclosures. Exactly what credit record has saved for someone can be queried once a year via free credit record information (referred to as a data copy according to Art. 15 GDPR). Even in the event of negative entries, those affected have the option of receiving funding: some brokers and foreign banks have specialized in this target group. They offer loans despite credit record entry.
High interest rates and some extra fees
There are two types of actors in the market for credit record -free loans: First, credit intermediaries offer these loans. On the other hand, individual banks from abroad generate sales, including money houses from Liechtenstein. Both have in common that they demand high interest rates. This can be explained by their increased risk. There is a reason why consumers have negative credit record entries. You have not paid bills, so lenders assume an above-average risk of default. They can pay for this in the form of high interest rates, which are often at the level of overdraft rates. There may be fees for a quick payout and commission from credit intermediaries.
Different award criteria
Despite credit record, intermediaries and banks understand various things under credit. For example, the question arises of how you handle credit record entries: Do you completely ignore the file and thus serious payment errors? Or they examine the credit record information, but set significantly more liberal standards than German banks. In the second case, they finance, among other things, in a judicial procedure that has now been completed, but not in the case of a current execution. Another aspect is income. Some service providers allow a loan without credit record with low income, the others demand a higher salary.
Avoid dubious providers
Consumers with negative credit record information suffer from financial hardship, which calls dubious companies on the map: They want to take advantage of this hardship, which can be expensive for those affected. A warning signal are promises that cannot keep up with reality. If a company advertises large amounts of credit with negative credit record income and low income, consumers should stay away from it. This concept cannot be viable. The lenders deliberately drive the borrowers into debt in order to make money with usury interest, dunning fees and other fees. Dubious providers also have upfront fees. You collect agency fees without guaranteeing success.
Exercise caution: risk of over-indebtedness
The experts at LinksOne Finance strongly advise you to think about the basics before taking out a loan: Consumers should analyze their financial situation and assess whether they can bear the high interest burden of a credit record -free loan. Those who are already in debt should consider going to debt counseling. In the worst case, a loan leads to over-indebtedness despite credit record or exacerbates the existing debt.