Credit Advisor – Information on loan financing

When taking out a loan, loan seekers are confronted with a multitude of loan options and loan issues. Only those who obtain comprehensive information in advance can later choose the right loan and find cheap loans. In addition, banks are increasingly offering the option of securing loans to protect themselves against unforeseen events. In the following, we will show you important topics relating to taking out and using loans.

Credit requirements

In order to be able to obtain a loan, loan seekers have to meet various credit requirements before the bank makes its commitment to borrow. These requirements are based on the type of loan taken out and the conditions of the bank. The most important credit requirements are a positive Credit Bureau information and a regular income. Certain securities can also be mentioned as a requirement.

Credit Bureau

Credit Bureau is an institution in Germany that collects data and makes it available to the lending industry. The stored data shows, among other things, whether loans granted to this customer are at risk of default or are expected to be repaid on time. This information from Credit Bureau will be used, among other things, when bank customers apply for a loan. If negative information such as a loan termination is available, no loan can be granted.

Credit rating

Creditworthiness is understood as the creditworthiness of a person. The banks determine the creditworthiness in order to determine the probability of default on their loans. The creditworthiness is calculated based on various data. Among other things, age, current income and the household surplus influence the creditworthiness calculation.

Residual debt insurance

By taking out residual debt insurance, it is possible to secure a loan and ensure payment in installments even if unforeseen events occur. The residual debt insurance is usually offered when an installment loan is taken out and can include various types of protection. The residual debt insurance is often taken out in the event of death, but insurance against unemployment and incapacity for work is also possible.

Debt restructuring

Debt restructuring is the taking out of a new loan to replace an existing loan. Debt rescheduling makes sense if, for example, the interest rate on the loan can be reduced or the monthly installment can be reduced. It should be noted, however, that rescheduling can only be carried out if the termination can be given for the current loan.

Loan interest

Loan interest is the fee that banks charge for money lending. The amount of the loan interest depends on various factors such as the loan term, but also the amount of the loan and the collateral provided. The borrower’s creditworthiness is also increasingly influencing loan interest rates, which is why creditworthiness-dependent interest rates are also used. Only if the banks refrain from doing so are we talking about non-credit interest rates that apply uniformly to all credit customers.

Loan repayment

In the event of a loan repayment, an existing loan is repaid early. The loan documents can be used to determine whether and to what extent early loan repayment is possible. In many cases, after observing the notice periods, it is possible to redeem the loan and replace an existing loan by taking out a new loan. This is particularly useful if lower interest rates are currently being calculated and interest costs can be saved with a new loan.

Loan guarantee

The credit guarantee is a loan security that is used in practice to secure loans. In the case of a loan guarantee, a third person advocates repayment of the loan so that the bank can approach this person if the loan installments are not paid. In practice, the credit guarantee is agreed as a maximum guarantor agreement. A prerequisite for the loan guarantee is a regular income from the guarantor and positive Credit Bureau information.

The opportunities to take out loans are particularly numerous today, since the credit business is an important pillar for many banks. However, not every loan is equally suitable for all customers, as the information in the credit advisor shows. There are also various offers from the institutes, which differ in price and credit terms. A loan comparison not only helps you find the right loan, but at the same time takes out a loan with cheap loan interest.

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