Loans without collateral are only granted in very rare exceptional cases. It also depends on what is meant by security. We distinguish collateral in the form of property such as home and land, savings, securities deposit or life insurance and collateral such as a regular income and a good name. The granting of normal consumer credit generally involves a so-called “blank loan” in which the only security is the regular income of the borrower. Who finances a car at a car bank, must usually deposit the vehicle registration as collateral with the bank. It is different in mortgage lending and real estate loans, here the lending bank usually enters into the land register.
The normal consumer credits with which they buy consumer goods are usually paid for free use. They are assigned with appropriate creditworthiness without the borrower having to provide the bank with additional collateral. Normally, a clean private credit information and a regular income from a permanent position. If the income is too low or the private credit is not flawed, banks usually ask for extra collateral by asking the loan applicant to provide a guarantor. Such loans are given without other collateral, because these are today standardized bank products, which are usually processed automatically. Many banks do not even charge more processing fees, Promise the instant loan and the loan applicant has his credit decision within a few minutes – if everything fits. If it does not fit, a loan is either denied or collateralised.
The banks prefer to hedge the possibility of securing an insecure loan through a guarantor. In this case, the guarantor must have a perfect credit rating and sign a so-called single-enforceable guarantee. That is, as soon as the borrower does not pay, the guarantor is charged.
Some consumers confuse the loan without private credit with a loan without collateral. In a private creditfreien credit banks waive abroad but only on the private credit information. All the more importance is placed on the security of the labor income.