Financial difficulties are part of everyday life for most people. They often have to apply for loans to bridge particularly difficult times like Christmas. However, there are major problems in getting an instant loan with poor credit rating. Because especially people who live close to the financial abyss do not have a good credit rating.
What requirements does the bank need for an instant loan?
When banks give money, they want it back. Unfortunately, reality shows that the debtors keep defaulting on payments. That is why banks are always looking for security. Getting an instant loan with bad credit is almost impossible. If the creditworthiness is not sufficient, the applicant must include additional security in the contract.
Values as security for an installment loan with no credit rating
Most banks that issue an instant loan with poor creditworthiness are happy to accept collateral. These can be a wide variety of valuables. You often use real estate or expensive cars. In the event of default, the bank has the right to appropriate this item. This can compensate for the debtor’s insolvency. However, people with poor credit ratings usually no longer have any valuables.
A guarantor creates trust
If you do not have an expensive car or property, the last option is a guarantor. This is also included in the loan agreement and declares that it will accept the remaining repayments should the debtor become insolvent. However, the guarantor’s creditworthiness must be so good that the bank can rely on him.
If you cannot organize a surety, there are two last ways to get a small loan. The first is a visit to the pawnshop. Hardly any evidence is required here. You only need items that you can do without for the loan period. For these, you get cash immediately. The objects can be released again later when the financial situation is more stable again. Practical items such as jewelry, cell phones or computers can also be monetized in the pawnshop.
The last option is often a personal loan from a relative or good friend. The better the connection to the person, the cheaper the conditions are. Often you get the loan without interest. But be careful: the saying “friendship ends with money” has, unfortunately, come true too often. Therefore all modalities should be recorded in a contract (at best with the notary). The smooth repayment is, of course, a matter of honor!