Collateral for a loan
March 5, 2019
Both credit institutions and direct banks use customer scoring to assess the creditworthiness of their customers. This scoring serves as a measure of whether a credit application must be accepted or rejected. But even the subjective assessment of the lender plays a not insignificant role when it comes to lending. Borrowers should therefore confidently approach the bank employee in the conversation. Not everyone is a “flawless businessman”, there are citizens with a low income or a negative entry in the private credit. Her personal appearance should not be like that of a petitioner. Because sometimes it’s about trifles, about the so often quoted “tip on the scales”. Bank consultants are also “only” people,
On the other hand, whoever acts meekly or even shyly wakes up slightly, as if he had something to hide, that he ultimately depends on this bank. This can not go well. Anyone conducting conditional negotiations should make it clear at every stage that there are other providers as an alternative. The bank, on the other hand, is primarily concerned that loan installments can be repaid without major incidents. The bank thus presupposes a certain degree of trust in the borrower, and in doing so, they favor the personal and character traits accordingly. It is true that the bank has all the legal means to act against a borrower who refuses to pay his loan installments. In most cases, however, this does not lead to a positive result.
So, if you want to get a positive rating, you not only show a positive and confident appearance, you should also provide all the documents that are used to assess the credit rating. Those who bring the documents themselves, scores clearly as the one who must be asked for each letter individually. If you have nothing to hide, you can also enclose a private credit information. By the way, this information has been available once a year since April 1, 2010, free of charge from the private credit! Furthermore, salary statements, employment contract and salary statement as well as existing assets should be found in the loan documents. Competing offers in written form are not to be recommended, because not infrequently the banks are changing their credit conditions to suit them. In this way, the borrower has no opportunity to leeway.
Especially as an entrepreneur, it is not always possible to secure his loans with sufficient values. If banks or savings banks do not help in such a case, they still have the option of contacting the guarantor institutions of the individual federal states. These institutions offer so-called deficiency guarantees with a return guarantee from the federal government and the states. These in turn serve the banks and savings banks as full collateral. The transaction is very simple: The respective guarantee bank vouches for the borrower on a certain amount of credit at its house bank. However, the guarantee is limited to 80 percent of the guarantee amount, the remaining 20 percent are at the risk of the house bank.
The issued guarantee should not be regarded as a gift, because it only compensates for the lack of collateral. The loan amount borrowed by the Borrower is solely under its liability. Thus, if it comes to bankruptcy, then the borrower of the guarantee bank is also liable for the sum, was bailed against the house bank.
In addition to commercial entrepreneurs, all non-professionals can take advantage of the indemnity guarantee if their financing project turns out to be positive in terms of business, but they can not receive a loan due to lack of collateral. Here, the deficiency guarantee serves as a full credit security. It is also possible to grant multiple counterparty guarantees for a single company. As a rule, the deficiency guarantee amounts to a security amount of 750,000 euros. Only for refurbishment projects will no deficiency guarantees be assumed.