Obtaining a loan is not a big deal with an unencumbered Credit Bureau and a corresponding income. However, the focus should be on the fact that loans have to be repaid again. Add to that the interest that banks charge for lending. There are quite a few consumers who are in debt and have to pay several loans. Often a way out is sought and this leads to the search for a loan to repay debt.
Debt Settlement Loan – The Outlook
In many, the overdraft facility causes financial misery. Banks provide the overdraft facility to their solvent customers. The application is easy and can be used quickly and many customers do the same. It is often overlooked that the overdraft facility should also be reduced. The bank calculates new interest every quarter which increases the overdraft facility. It does not warn, because the earnings of the banks are enormous. If the customer always overdraws the granted credit line, the bank will intervene.
This then results in a loan for repayment of the debt, which is paid off at constant rates and fixed interest. This is actually a good thing, but there are customers who use the canceled overdraft facility again. This creates an endless spiral that can lead to overindebtedness. In general, the overdraft facility should only be used for a short time. If, for example, at the end of the month when the account is empty, a urgent invoice is payable. But if you use the overdraft facility like an income that you do not have, sooner or later there will be a loan to repay the debt.
Generally, a loan for repayment of debt only makes sense if the bottom line is savings. This can be done by giving the loan a longer term so that the rates are reduced or when a loan is rescheduled because the interest rate is much better. Especially if the customer has to pay several loans and maybe also has installments in the mail order business, it would be better if all liabilities could be combined to form a loan for debt repayment.
However, banks only grant loans if the customer is creditworthy. The bank will draw up a budget and compare the income with the expenditure. If the review turns out to be positive, financial leeway remains, and the basis for a loan to repay debt would be created. If the Credit Bureau is still not debited, i.e. has no negative entries, the loan will be approved.
The first step is cost control
Anyone looking for a loan online is almost overwhelmed by the advertising of the individual lenders. This gives the impression that even people who are over-indebted can get a loan. However, the reality is different. The Credit Bureau is often bad even then, so lending is difficult anyway. Loans are also advertised with poor Credit Bureau and without credit check. Of course that is nonsense. Banks in this country always check the Credit Bureau for negative entries, only foreign banks do not check this, but instead check the income comprehensively and this must be so high that it is above the garnishment-free limit.
In the case of a single person, that would be around 1,100 USD net. So if you have a negative Credit Bureau and can prove your sufficient income, you will receive a loan for debt repayment. However, the interest is much higher than with a conventional installment loan. In addition, these agency-free loans come with the agency fee and other ancillary credit costs. An expensive loan that should only be taken out if there is a real financial shortage with the necessary cash. Anyone who is already in the debt trap should look for debt counseling rather than plug a hole in a loan.
There are also customers who are so heavily in debt that no bank grants a loan. Professional help should come first. If you consider that there are about 6.7 million people in Germany alone who are considered over-indebted, then a loan seeker should no longer take out any more loans. A large part of this debt is so-called consumer debt. There he is bought the latest television on “Pump”, there the latest smartphone. Many customers have completely lost the reality of their finances.
In addition to the overdraft facility that drives many customers into a debt trap, it is also the credit card that has a partial payment function. The account is empty, but it is bought, the card brings the missing money. When the billing comes, many are scared of what has been spent. If you don’t let it get that far, you should use a budget to compare your income with your expenses. This shows how much of the income remains, which could possibly be spent. Because uncontrolled buying using the overdraft facility or credit card can quickly lead to a negative entry, which in turn makes it impossible for many to seek a loan.
It shouldn’t happen at all. If you are having trouble getting along with your income, you should probably keep the good old household book. There everything is written down which is given out daily. Some customers often couldn’t believe what was coming together. If there is already some debt, you should try to put all the liabilities into a loan before the debt becomes apparent in the Credit Bureau.
The loan for debt repayment – Credit Bureau-free
If the debt burden has not yet hit the credit rating, an installment loan can actually be taken out anywhere. With a credit comparison, the best provider can then be found by entering the loan amount, the term and any installments. However, care should be taken to ensure that the installments remain affordable. This happens when the loan has a long term. It is better to pay a little longer and also be able to do so than there is a credit default. A second borrower may be able to increase the credit opportunities. However, this must be solvent and have an excellent credit rating.
If you already have negative entries in the Credit Bureau, you usually do not get a loan for debt repayment in this country. Then a foreign bank can be the way out. Credit Bureau does not play a role at this bank, and the loan is not entered. However, there are only limited amounts of credit. The highest loan is currently 7,500 USD and therefore an excellent credit rating requires a high income. The most approved loan has a loan amount of 3,500 USD. Then there is still 5,000 USD. The customer decides to what extent these loan amounts are sufficient.