Are you considering taking out a loan without SCHUFA?? We inform you about the risks of SCHUFA-free loans and show you alternatives.
Reasons for a loan without SCHUFA
All banks and credit institutions check your creditworthiness when you want to take out an installment loan. If you have your finances under control, a regular income and a permanent job, there is often nothing to prevent you from taking out an installment loan. However, if one of these cornerstones is shaky, for example if you are self-employed or already have other installment loans, it may be difficult to obtain an installment loan.
With a loan without SCHUFA, borrowers with little chance of getting a conventional installment loan hope for a loan. Whether this makes sense and which pitfalls are hidden behind a loan without SCHUFA, we want to clarify in the following.
Is a loan without SCHUFA possible at all??
installment loans in germany
If you need a loan in germany, you can either contact a bank or savings bank directly, or you can contact a financial intermediary.
In germany, banks generally obtain SCHUFA information before granting a loan. It is therefore with German banks and credit institutions and through financial intermediaries such as dr. Klein not possible to get a loan without a credit report.
However, SCHUFA alone is not the decisive criterion for granting loans. Even a SCHUFA entry is not automatically a knock-out criterion. The term creditworthiness includes much more than just the SCHUFA information. Banks evaluate creditworthiness on the basis of various factors such as:
- Income,
- Age,
- employment relationship,
- Loan collateral,
- Existing other installment loans or
- Other financial obligations and expenses such as alimony payments
The additional SCHUFA information obtained gives the bank clues about your payment history and financial behavior. So whether they have always paid bills on time, whether they have many credit cards or their current account overdrawn. The SCHUFA is therefore only a component of the bank’s credit check.
Loans with foreign banks
While German banks usually consult a credit agency such as SCHUFA when requesting a loan, foreign banks do not do this. In the case of so-called swiss loans – i.e. loans from foreign banks – banks generally do not consult SCHUFA when granting a loan. However, this does not mean that it is easier to obtain a loan from these banks.
On the contrary, the requirements for loans from foreign banks are often very high. Among other things, you must prove that you have a certain minimum income and show whether you have other loans outstanding and, if so, how much. If you are unable to pay the installments, the bank reserves the right to seize the loan. This in turn means that the foreign bank must ensure that they generate sufficient income on a regular basis. Self-employed people, students, pensioners, trainees or unemployed people therefore hardly have a chance to get such loans.
It is therefore perfectly possible to obtain a loan from a German company abroad without a SCHUFA check. Nevertheless, as already mentioned, the lending company naturally assumes a certain risk. This risk is usually compensated with significantly higher interest rates. For you, this means that a loan without SCHUFA from a foreign bank can be very expensive compared to a loan with SCHUFA. How serious providers of credit without SCHUFA abroad are, remains a matter of conjecture.
Dubious credit brokers advertise, especially in the context of spam mails, penetratingly with a credit without SCHUFA. A major danger lurks here. Presumably, you have to pay in advance for any documents or their dispatch, even chargeable hotlines are not uncommon. In the end, they will most likely not get a loan, but the dubious provider has "earned" a lot from them through the fees. We strongly advise you not to take advantage of such alleged offers.
reputable credit brokers do not ask for any money from you. They live off the commission that the bank transfers to them after you have decided on a credit offer.
Why does the bank ask for your SCHUFA score??
For the bank, checking your creditworthiness is necessary when granting a loan for several reasons. On the one hand, it checks whether you can afford the loan and its installments. On the other hand, the bank uses the credit check to weigh the risk of whether it will get its money back again. The better your credit rating, the lower the risk from the bank’s point of view that you will not be able to pay the loan installments and the more likely it is to grant a loan. The SCHUFA check therefore gives the bank the certainty that you are a good borrower and that you can financially bear the monthly installments.
In the case of a loan without SCHUFA, the bank would accordingly take a high risk. Of course, the bank can also get an insight into your finances via proof of income or bank statements, but only the SCHUFA information tells the bank something about your previous credit behavior: have you paid off old loans and, above all, have you paid the installments regularly?? Or have there been discrepancies or late payments??
The bank’s information also counteracts overindebtedness on the part of the borrower. If a bank sees during the loan processing that the borrower has difficulties in paying his liabilities, the bank prevents overindebtedness with a loan rejection. By asking SCHUFA for information, the bank does not want to annoy its customers, it only wants to protect itself and the borrower from a financial risk.
How SCHUFA assesses your creditworthiness
SCHUFA is a private-sector credit bureau that is supported by the lenders. In the event of non-payment, the companies concerned pass the data on to SCHUFA. Furthermore, all account openings, credit cards and cell phone contracts are also stored in your SCHUFA account.
If you now want to take out a loan, the bank assesses your creditworthiness by checking your SCHUFA score. However, the SCHUFA score does not evaluate you personally, but a group of borrowers to which you belong. For example, the classification is based on your age and current place of residence. The SCHUFA score is therefore more of a forecast of the expected payment behavior.
The SCHUFA score is often expressed in percentages. No one in germany has a score of 100 percent. The downgrades occur at
- > 97.5 % = very low risk
- 97-95 % = low to manageable risk
- 95-90 % = satisfactory to increased risk
- 90-80 % = significantly increased risk
- 80-50 % = very high risk
- < 50 % = very critical risk
A SCHUFA score of 95 is already no longer good. For example, you can’t compare the SCHUFA score with the grade you get at school, where 90-95 % would be a good grade 2. There are banks that reject a credit application already with a score of 95. And even we can learn from dr. small despite our good relations with our bank partners nothing can change it.
As long as you have a good SCHUFA rating or no entries at all, you will have no difficulty in obtaining an installment loan.
Residual debt insurance for SCHUFA-free credit
Many banks often offer a so-called residual debt insurance in the course of granting a loan. For borrowers with a good credit rating, such insurance is often not necessary. In the case of a loan without SCHUFA, however, the conclusion of a residual debt insurance is often a prerequisite for obtaining a loan. This protects against the event of insolvency. Although this is not legally permissible, people who urgently need a loan unfortunately often sign such gagging contracts without hesitation. If you are unable to pay your loan without SCHUFA, the insurance company would take over your remaining debt and pay it to the bank.
The residual debt insurance is included in the monthly installments and thus also accrues interest. The premium for the residual debt insurance amounts to an average of ten percent of the loan amount, but can also be significantly higher. This can significantly increase the cost of your loan.
Credit without SCHUFA: the risks
The mainly anonymous processing and the bypassing of the SCHUFA are probably the reasons why some borrowers are interested in a loan without SCHUFA. But this also entails many risks. To make it easier for you to decide against a loan without SCHUFA, we have listed the risks below:
- Many dubious credit providers
- Credit amount usually limited
- Residual debt insurance often "mandatory
- The risk of debt is growing
- Credit providers are often based abroad
- Unreliable fees and costs
- Higher interest rate, therefore higher costs
- Loan disbursement is not secured
Check alternatives to credit without SCHUFA
The specialists for installment credit from dr. Klein ensures that your creditworthiness is considered professionally and taken into account when the bank makes its decision. If your credit is rejected, often only an honest look at the reasons can help: if you are already in debt, a credit without SCHUFA would only lead you further into the debt spiral.
If the rejection is due to an incorrect SCHUFA entry, you should have it corrected as soon as possible. It is best to make use of your right to free SCHUFA information once a year and apply for it yourself at SCHUFA. How to keep an eye on your SCHUFA score and react quickly if necessary. You can have an incorrect SCHUFA entry deleted without any problems. For this you must:
- Contact the SCHUFA
- Ask for deletion of the erroneous entry
- Request confirmation of the deletion request
But even if the credit check is negative, you do not necessarily have to resort to a loan without SCHUFA. In many cases you can also use a "normal" installment loan. Banks’ lending guidelines sometimes vary widely. If one bank rejects your request, the other may still make you an offer.
Make sure, however, that the bank makes a condition request and not a "request credit". condition requests, unlike credit requests, do not affect your SCHUFA score. Make your request exclusively via dr. small, you need not fear any negative effects – our specialists for installment loans compare the credit offers schufaneutral for you.
