Non-credit installment loan – is there such a thing?
Many lenders try to accommodate their customers as much as possible. They offer particularly low interest rates or require very little evidence before lending. Many a lender even explains that an installment loan that is independent of creditworthiness is possible. However, many experts warn of these offers. Only a fraction is actually serious, according to the prevailing opinion. A summary is on http://www.jeffreylucklucas.com/joint-debt-consolidation-loan-we-offer-the-best-debt-consolidation-loan-programs/
What are the difficulties?
The creditworthiness is actually the decisive criterion for a loan and the decision whether it can be granted. It says whether the borrower’s income is sufficient to repay loan installments or whether they are too scarce to do so. If the creditworthiness is not sufficient, the banks can be almost certain that problems will arise at some point in the repayment of the loan.
If you ask the bank whether a non-credit-worthy installment loan would not be possible, then you ask them in plain language to waive the actually most important criterion when granting a loan. But there are certain ways in which this is within the scope of what can be imagined.
An installment loan the special cases
There are two special cases in which a credit-independent installment loan is granted without major problems. On the one hand, this is the case when you ask for money from the state, which should help you start your own business, for example. The state often issues loans if it can be demonstrated that they no longer require state support (unemployment benefits, etc.).
The state is not particularly interested in the creditworthiness, since it knows for sure that it does not exist. On the other hand, there is also a special case in cooperation with a bank. In this case, the new installment loan is about debt restructuring. So you use the fresh loan to pay off an old, more expensive one. Since debt restructuring lowers the value of total debt, you will usually find banks that give this installment loan even without an exact view of the creditworthiness.
Independent of creditworthiness: further options
However, this does not exhaust the possibilities of how to get such a loan. In fact, there are numerous other options, such as the possibility to turn to private individuals as donors. Friends or family usually follow a “number as much as you can” lending philosophy and leave out the credit rating. Banks also do this if you are otherwise assured that they will definitely get their money back.
The simplest method in this regard is either not to sign a loan application on its own, in this way involving a guarantor to lend it, or to offer the bank various attachable collateral, the value of which reaches the loan amount. For example, such collateral is used for vehicles, land or real estate, but also for household appliances. However, financial institutions are extremely reluctant to take the last path, as it is extremely cumbersome for them to actually turn the collateral into the money they are entitled to.