There can be several reasons to look for a loan online. Perhaps you just want to get general information about the current credit market. Or your house bank has flatly rejected your loan request and now you are looking for alternatives. Maybe you are also looking for a particularly cheap offer. We’ll show you what to look for in order to get a cheap loan online. We particularly take your creditworthiness into account. When searching for a loan, it makes a difference whether your credit rating is excellent or rather low.
Credit Bureau self-assessment: determining your own credit rating
All credit bureaus must give you free self-disclosure once a year. This only happens on application. Personal information protects against nasty surprises and is a good preparation for a credit request. Start with self-disclosure at Credit Bureau. Check carefully that the saved data is complete and correct. Make sure that incorrect data is corrected and, if necessary, deleted. Even minor details can be important when determining which score values apply to you. This also applies to personal data such as date of birth or addresses.
Try to resolve issues that have created negative features. For example, pay open debts if you are financially able to do so. The negative entry is not immediately eliminated by a payment, but it receives a completion note. Lending is then more likely than with an open negative entry.
If you find inaccuracies, incompleteness or negative features in your Credit Bureau information, you should in any case request self-disclosure from other credit reporting agencies and correct any incorrect information if necessary. Credit Bureau information and sometimes additional information from other credit agencies is a decisive factor for all direct banks and financial service providers operating on the Internet.
The credit check begins with the information and ends immediately if the bank’s own criteria are not met. You can find links to the addresses in our post on self-disclosure. We have summarized further information about Credit Bureau and how you can delete entries to improve your creditworthiness in a separate section.
Income and wealth overview
Get an overview of your income and expenses. In addition to the content of credit rating information from credit agencies, the household accounts drawn up by the banks play a decisive role. They cannot know in advance what criteria the bank uses to prepare a household bill. However, it is possible to estimate the cost of living and the free income available for loan repayment.
Also determine to what extent your income exceeds the garnishment exemption limit. Here is a link to a current attachment table.
Check if you can provide collateral. Not only real estate comes into consideration as security. Securities, savings, capital life insurance or private pension insurance are also suitable.
Look at your bank statements for the past four months. Are there any payment problems from the statements? Debt collection or return debits can prevent lending. If necessary, wait a month or two for your loan request so that you do not have to reveal problematic bookings.
Use credit comparison
Do you have a good or at least normal credit rating? In this case, you will get the cheapest loan if you use one of the usual loan comparisons. We recommend financial check.
Adjust your loan request to your financial options. It makes no sense to apply for a loan of 20,000 USD with a term of two years if you only have 100 USD available to pay the installments after deducting the cost of living. In addition to the loan amount, the terms play a role. Longer terms lead to lower monthly charges for the same loan amount. However, the total cost burden of the loan increases.
Don’t forget to indicate the purpose. For example, some banks grant special conditions for motor vehicle loans. The same applies to loans that are to be used from the outset to renovate or modernize living space (residential loans). If you apply for a dedicated loan, you can only use the loan amount for the stated purpose. The use must be proven frequently.
How do I get a loan despite a negative Credit Bureau?
If you have a low credit rating or if your creditworthiness is burdened by negative Credit Bureau entries, completed or unfinished, you will not be successful with credit inquiries via a comparison calculator. Rather, you should turn to a reputable credit broker like Lite Lender, who specializes, among other things, in loans in difficult cases. Lite Lender does not charge any upfront costs.
Lite Lender also carries out a loan comparison. However, the credit intermediary can fall back on partner banks that are willing to lend to people with creditworthiness problems.
Lite Lender also gives you loans without Credit Bureau if normal installment loans have become impossible due to your credit rating.
Credit request: what to look for?
First of all, clarify whether the credit request is neutral. As a rule, this applies to direct banks, credit comparisons and credit intermediaries. Every credit request begins with personal information. The first question mostly relates to the number of applicants.
First, try to make the loan application alone. A co-applicant can improve creditworthiness and lead to more favorable conditions. However, the creditworthiness of the co-applicant is debited. This can have a negative impact on future borrowing. However, many direct banks require a co-applicant when it comes to higher loan amounts sometimes starting at 10,000 USD. In such cases, the only option is to apply for the loan in pairs.
The applicant is often asked very quickly whether he would like to take out residual debt insurance. Sometimes the completion is even preset in the credit request.
Wondering how to get a cheap loan? Then cancel the residual debt insurance. Any residual debt insurance significantly increases the cost of credit. Residual debt insurance is superfluous with standard installment loans. In the further course of the credit inquiry it is about your economic situation. Correct and, above all, complete information is required here. Small mistakes can lead to worse conditions or even the rejection of a loan application.
Don’t forget liabilities. Liabilities also include framework loans and overdraft facilities. State your income fully. Do not forget any additional income, regardless of whether it is from a secondary job, capital assets or renting and leasing. Finally, pay attention to correct spelling and punctuation. Make sure that your online loan request leaves a serious impression.
How long will it take to get a loan?
Direct banks often advertise with instant loans. With the “immediately” it is usually not that far, even if modern technologies have accelerated the application process. The duration of the lending process depends on your credit rating. If there are creditworthiness problems, if there are negative Credit Bureau characteristics or if you have to switch to Credit Bureau-free small loans, ten days before the loan is paid out is not uncommon.
Without credit problems, lending is faster. In the past, 5 to 7 working days were the norm. This is still the case with some direct banks. Other banks are speeding up the process by using modern technologies. Video identification, uploading documents and digital signatures can shorten the time until the loan is paid out, from 24 hours to 48 hours.
You benefit from the technical innovations if you have a computer with a camera. A smartphone is particularly suitable. A large number of direct banks now offer loans that can be concluded on the computer with an electronic signature. Lending is particularly quick if the bank has the technical prerequisites to carry out a so-called account view.
The account view replaces the sending of documents, be it by post or by uploading documents. Credit customers provide the bank with the access data for their main account via a secure connection. The bank then accesses the account to a clearly defined extent and evaluates the account movements. This happens practically in real time together with the loan request.
With an account view, loans can be paid out immediately after digital completion. The instant payment loan provided by Capital Lender is called Astro Finance.
Lending without income, as an unemployed person or as a trainee?
How do I get a loan without income, as an unemployed person or as a trainee? The honest answer is frustrating: Not at all, at least when it comes to the usual installment loans from banks. Things look a little better with P2P portals like Best Bank. Here, trainees and those receiving parental allowance or sick pay can try to apply for a loan.
However, they will only be successful with the loan request if sufficient regular targeted income is available. For example, some banks or financial service providers may accept an unemployed applicant. However, you then request a solvent co-applicant or guarantor who is the actual borrower. So-called mini loans or short-term loans have been offered in Germany for some time.
These are very small loans, usually less than 1,000 USD with terms of up to two months. The repayment will be made in one amount at the end of the term. This type of loan requires a low minimum income (600 USD or 700 USD). However, the income must be generated regularly. Apprentices, for example, could apply for such short-term loans. However, the effective annual interest rates are relatively high. It also takes a long time for the money to reach your account. If you want to speed up this process, express functions must be purchased. And for that, borrowers have to dig deep into their pockets.
How do I get a loan without collateral? The answer to this question is also: not at all. However, many direct banks are satisfied with a silent assignment that the employer does not learn about. Additional collateral is not required for installment loans and is often not accepted. In any case, this applies to credit customers with good to normal credit ratings.