Despite the negative credit rating , it is not possible to obtain a loan through classic banks and banks, because under these circumstances the prospective borrower has no creditworthiness, which would make lending too risky for the lender. However, the situation is different if the borrower can provide additional collateral in the loan agreement and thus also to the lender.
Popular assets among people with low credit are, for example, guarantors or a car already paid off. The guarantor is liable by his signature under the credit agreement for the debt of the borrower, which, however, is given priority. Only when the borrower is in default of payment or can no longer settle the installments in full, the guarantor is actually used by the bank as a liable. Without at least one of these two securities a loan is not possible despite negative credit rating via a professional bank.
Consider private loans
In this case, borrowers just remain borrowing through a private, familiar person from the immediate area. This group of people can certainly act as a lender, whereby a lending is, of course, only possible if the private lender also has a sufficient income or savings reserves. In these cases, the personal relationship to each other is much more important than the credit rating, which is why the circumstance of unemployment and the negative credit rating rating can be largely ignored.
Usually only small or micro credits are possible with foreign lenders that is a little different.
Personal loans, for example, provided through a loan portal, where private borrowers meet with private lenders, are usually assembled via crowdfunding. So it serves a larger mass of people as lenders, while the borrower is a single person.
Disadvantages of foreign lenders
In this way, not only the credit is possible despite negative credit rating , but also an acceptable loan amount. The lending is only done here in the rarest cases to help people out of financial distress. The motivation to “invest” in the borrower by lending a loan with a call for interest is often more the desire for a higher return than traditional banking products offer to investors.
The fact that many “investors” invest only a small three-digit amount in a borrower, but spread a larger sum of money in total, the risk remains in a manageable range. If the rating in the credit rating is negative and the rating is not favorable, borrowing may not be possible.