There are many situations in life that require instant liquidity. The car has a major defect that is not covered by the insurance, the washing machine is suddenly no longer usable or the house needs to be refurnished. If your own budget is not sufficient to fulfill your wishes, a loan is an option.
Today, people no longer have to go to their house bank for this, but can easily apply for an online loan. But how good are the offers that can be found on the Internet and what do you have to look out for?
Comparison helps to find the right provider
The loan appears as a lifeline in times of need, but no one should make a hasty decision. There are many good and bad offers on the Internet and careful comparison helps to find the best provider for individual needs.
The following factors should be taken into account:
– The duration from the application to the payment.
– How high is the interest rate compared to other providers?
– Are there flexible repayment options?
– What documents or collateral does the lending company want?
Reputable web portals enable a quick comparison to introduce interested parties to the most important credit providers for their needs. You should not decide spontaneously, but take the time to weigh up the pros and cons of individual offers and possibly even discuss them with your family. Once the decision for an offer has been made, it rarely takes more than 24 hours between the application and the payment.
Protecting against fraud: How to recognize false promises
It sounds too good to be true when loan providers offer options that no other bank would otherwise offer. Many people are in debt, have no income of their own and cannot provide collateral, yet they have received an offer of credit which they almost cannot refuse. Caution is advised here, because there are also dubious loan sharks on the Internet. You should always pay attention when an offer sounds too tempting and the agency does not want any further security. There are also certain requirements for online loans so that interested parties can receive financial help. No reputable bank can afford to pay off a loan if the borrowers are unable to repay it. Supposed “offers without Schufa” quickly turn out to be a failure, because the costs for the risk of default are paid by the banks.
Important: If a credit intermediary asks for an advance payment just to mediate for the applicants, it is a scam. Under no circumstances should you pay before something has been given in return, no matter how great the shortage of money is.
For whom is an online loan available in a reputable way
Many loan applications are rejected, especially by house banks, without giving reasons. When it comes to real estate loans, the consumer advice center in Bremen has found that age plays an important role. In the case of a classic installment or consumer loan, the rejection is in most cases due to a poor credit rating. Creditworthiness means that borrowers are willing and financially able to repay the loan to the bank. In order to determine this creditworthiness, a query is carried out at credit agencies or at the Schufa in Germany. The risk of non-payment can be weighed on the basis of the transmitted score.
In order to be eligible for a loan, the following criteria must be met:
– Reached the minimum age of 18 years
– Non-terminated employment relationship
– Sufficient income through self-employment
– Debt-free tenancy or ownership of property
– Positive credit check
– Permanent residence in Germany
If the online loan is rejected, the examining body assumes that the applicant is currently not in a position to repay the obligations arising from their own financial resources. Not only existing debts, but also current loans and payment obligations can be an important reason why the application for an online loan is rejected.
For what purposes can an online loan be used?
There are various purposes for which an online loan can be used. Basically, it is important to distinguish whether you want to take out a loan for trade and commerce or for private use. The most common forms of credit on the Internet include car loans, private installment loans and loans for debt restructuring. When applying for an online loan, you can usually choose what the money can be used for. But you can also opt for a loan without earmarking, for example to avoid expensive car financing from the dealership.
Bank Loan vs. Online Loan – What are the Differences?
First of all, an online loan is automatically a bank loan because the money comes from a bank. There is now hardly any type of loan that cannot be applied for completely on the Internet. Numerous banks offer their customers, as well as external customers, comprehensive online support parallel to their branch activities. In addition, there are many subsidiaries of established banks that function as pure online banks. There are big differences in the costs of the financial offer, because online loans almost always offer a cheaper interest rate.
The total costs are calculated based on the amount of work, among other things, and this is lower when lending via the Internet. If you apply directly to the branch, you not only pay for the loan itself, but also for advice from an employee, for the location itself and for the brokerage costs of the bank advisor. All these costs do not exist with an online loan, so that significantly cheaper rates are possible. This is only a disadvantage for people who want comprehensive personal advice and support, in which case the online loan can appear too impersonal.
Is an online loan not as serious as a bank loan?
When it comes to money, many people fear the internet. Understandable, there are always reports of cases of fraud and rip-off, which mainly take place in the virtual world. Fortunately, with a reputable online loan, the fear is unfounded. Anyone who has no experience with loans in general and does not feel comfortable with money transactions on the Internet can be blessed with personal advice in a branch. However, if you have no concerns about virtual services, you do not have to worry about the seriousness of online credit. Of course, it is crucial that you have found a really serious offer based on a loan comparison. If you have studied the conditions of your offer, asked a trusted person for a quick look if you are unsure and you are sure that you can repay the loan, there is nothing to fear with the online loan.
Are loans without Credit Bureau dubious or are there real opportunities?
Caution is advised with a loan offer without Credit Bureau. Offers that are made available without any security on the part of the bank should arouse suspicion. There are banks and loan providers from abroad who do without a Schufa check in order to enable desperate people to obtain financial support. This can be serious, but does not mean that all securities are waived. Even if a (usually foreign) bank refrains from obtaining a credit bureau certificate, it will not waive collateral.
These include, among others:
– A current payslip from an ongoing employment relationship
– Submission of the most recent tax return
– Submission of the most recently received income tax assessment
– Possible collateral (real estate, car, securities)
Depending on the credit bureau score, some of these documents may also be required for a classic online loan. With a loan without Credit Bureau, however, the need is significantly higher because the issuing bank has to secure itself.
Important: If a loan is offered without a previous credit bureau check and without the need to provide other security or evidence, you should refrain from this offer.
How can you tell if a loan is the right solution? An online loan is not always the solution to a financial problem. Anyone who is already suffering from a lack of money and is hardly able to make a living for themselves can quickly become a debt trap for a loan.
Even if the Schufa score is flawless, you have no previous debts and have been able to pay every bill so far, an income statement must be created. In this way you can protect yourself from not being able to pay the loan in the long term and then falling into the debt trap.
When deciding on a loan, it should be taken into account that you are committed to a financial transaction for a fixed term. It doesn’t matter to the bank if less money is available one month and more the next, the monthly installments are due on time. If a payment is not made, it can happen that the bank terminates the loan and the remaining amount is due immediately. By then at the latest there will also be a note in the respective Schufa. This in turn causes problems if you later want to take out a loan or conclude a contract with a mobile phone provider.
Online credit works when the framework conditions are right
An online loan is not dubious, it simply works digitally. The most important feature is the lower costs, since there is no need for advice and services on the part of the bank. It is always suitable if you can repay the loan without severe restrictions and still do not have to live at the subsistence level. Before taking out an online loan, you should compare carefully and then choose the provider who can make the best possible and cheapest, but also the most serious offer.