If you want to get credit from a bank, you have to be creditworthy. As part of the mandatory credit check, banks determine whether a loan applicant is creditworthy or not. As a result, it is relatively unlikely, if not excluded, that banks will grant a loan without a credit check. Banks are even legally obliged to check whether a loan applicant will be able to repay the loan in accordance with the contract. Corresponding paragraphs on this are anchored in the Banking Act.
What is the term credit without a credit check
In general, a loan without a credit check is spoken of when it actually means only a Credit bureau-free loan. Loans without Credit bureau do not come from Agree banks. They do exist, but they are also not loans that the banks do without a credit check. Customers who want to take out a loan without Credit bureau must also be creditworthy. The foreign banks have even stricter regulations than German credit institutions. Anyone wishing to take out a loan without Credit bureau must be able to demonstrate a permanent employment relationship that has existed for at least one year.
This employment relationship must generate an income that is significantly above the garnishment exemption limit. A guarantee is excluded from the outset. The foreign banks that grant Credit bureau-free loans explicitly rely on the attachable income of the borrowers. What is in the Credit bureau is irrelevant. Anyone who does not get credit from Agree banks due to their negative Credit bureau can contact a credit broker if they have the relevant requirements for lending.
The target group for the Credit bureau-free loan that foreign banks grant is neither unemployed and Social Welfare recipients nor housewives and students. Even self-employed and freelancers have no chance of getting a loan without Credit bureau.
When is there credit with no credit check
However, it happens completely without any credit check when loan seekers want to take out a loan from their own existing assets. For example, if you have life insurance with a correspondingly high surrender value, you can lend this insurance. This is how people with poor creditworthiness get credit without a credit check: Because insurers are not interested because the insured person does not incur any debt, but simply borrows his own money. He can even choose freely whether he wants to repay the borrowed money or whether the amount paid out should be reduced by the amount. Neither the Credit bureau nor the income situation are important. Many consumers are not so familiar with this option because it is used relatively rarely. An existing life insurance policy does not necessarily have to be canceled if money is urgently needed.
There is a similar situation with the so-called securities loan. Owners of a securities account are usually automatically granted a securities loan by the custodian bank. With this loan, the person concerned can lend a certain percentage to his securities in the custody account. The higher the deposit value, the higher the security loan. This is also subject to certain conditions, but the creditworthiness of the security owner is not subject to disposition.
Only when it comes to borrowing money from a bank do borrowers get around the credit check.
Exception – the credit from relatives or friends
On the other hand, if you borrow money from relatives in the family or ask your friends for a loan, you will of course not have to go through a credit check. The money is borrowed either because of friendship or because of family ties. Even if this is a credit without a credit check as a kind of friendship service, a written contract should not be waived. The modalities of the repayment should be regulated accordingly in the informal contract. Borrowers who borrow money from friends or relatives generally do not pay interest.