In Germany the poverty line continues to rise. The so-called middle class almost no longer exists. The statement of many is poor and rich. If people can no longer make a living from their work and additional jobs have to be accepted in order to make ends meet, then one wonders, do we still have a constitutional state that is there for all people. It is the low earners who need the most loans. Nothing can be put aside from the income and if an unexpected repair or purchase occurs, many can no longer manage. The result is a low-income loan.
The low-income loan – the outlook
If the work is not paid properly, or there are restrictions on accepting a full-time job, even small unexpected costs can put these people in need. You are already saving on every nook and cranny, you turn the USD over twice and still don’t get a green branch. If there are still unplanned expenses, there is no other option than to look for a loan with little income.
Of course, these customers are not welcome customers at the banks. The income often does not even exceed the garnishment exemption limit. But what to do if you can’t do it without a low-income loan. These customers usually try it at the house bank. They are known there, the employee knows about the customer’s finances, but ultimately his hands are tied if the necessary creditworthiness is not sufficient.
Many customers then hear that a low-income loan is successful if additional collateral such as real estate or a loanable life insurance policy is provided. A second borrower or a guarantor could also secure the loan.
Some people are annoyed by the stubborn behavior of banks when they refuse a loan. But banks have a so-called duty of care towards their customers. This states that before a loan is approved, it must be certain that the customer can also pay the loan. She then runs a budget that compares the customer’s income and expenses. If there is a plus, the credit could be successful.
But it’s not just the income, the banks also query the customer’s Credit bureau. All credit obligations and payment irregularities are noted here. If there are other loans or installments there, the credit rating is reduced again. If payment defaults have occurred, this is the knockout blow for a loan, at least at a German bank.
The low-income loan – credit protection
Customers with a low income can always assume that their income is insufficient for a loan. The bank demands collateral. If the customer cannot access a property or other valuable property security, then they could perhaps appoint a second borrower. For example, this could be the partner or someone from the family. However, the second borrower must be solvent.
His income must comply with the bank’s rules, his Credit bureau must be clean and he must have a permanent job. The borrower should know that he has the same obligation with the loan as the borrower should there be a default.
A surety is also a loan security. Anyone who finds a guarantor is checked in the same way as the second borrower. The creditworthiness provisions as described above also apply to. The guarantor is much more involved in the loan because he is liable with all his assets if the borrower can no longer pay. In addition, his credit rating is reduced because the guarantee is entered in the surety’s surety. Also important for the guarantor, he is on an equal footing with the borrower, which means that the borrower no longer pays, then the guarantor is called in immediately.
Since the guarantee reduces its creditworthiness, it has already happened that the guarantor himself needs a guarantor when requesting a loan, since his creditworthiness is no longer sufficient. A guarantor must be able to pay any installments that may arise.
Even if there is a property or other valuables, many customers prefer the guarantee because they do not want to mortgage the house and yard. Ultimately, it is up to the customer to decide which loan protection to choose. The bank then has the final say on a low-income loan.
Can the loan come from abroad?
If there are negative entries in the Credit bureau, there will be no loan with little income in this country with this credit constellation. The way out would be the Credit bureau-free loan from abroad. It is advertised and processed by credit intermediaries. But the bank decides on the loan and not the loan broker. The loan application is the same as for a normal online loan. The creditworthiness documents must also be sent to the bank.
The international loan, however, has strict requirements. The income must be so high that it has a attachable share. In order to receive an attachable share of 80.86 USD, a customer with a four-person household must earn a net 2,500 USD. Child benefit or other state benefits are not included. A single person must earn 1,160.00 USD net so that he has a attachable share of 80.47 USD. Since the attachable portion of a foreign loan must be at least USD 80.00, low-income earners do not benefit from this type of loan.
To what extent the loan with little income from abroad can be secured with a guarantor or a property would have to be asked from the financial institution.
When it comes to things that need to be purchased, the social stations in the federal and state governments can help.
Even if you have something to pawn, for example expensive jewelry, you can pawn it in the pawnshop. He receives cash without a credit check. When he is liquid again, he can release his valuable treasure again.