Correction: What loans without credit bureau really are

In the media these days are repeated pronounced undifferentiated loans without credit bureau. The loans are put in a bad light and close to our own providers. This is done by improper mixing with other offers and on the basis of dubious studies.

In this context, the media likes to cite an investigation by credit bureau, which – not surprisingly – concludes that loans without credit bureau are not a good thing. The study represents credit bureaufreie loans as an unsustainable promise unseriser provider. In 177 test inquiries only two loans have been made. The presentation is very tendencyful and transparent. Since two loans could be successfully brokered or this would have happened according to the study, the statement should read: “Loans without credit bureau exist”. Instead, the statement reads: “credit bureau-free loans do not materialize.”

Inquiries from unemployed and business people

Inquiries from unemployed and business people

If you are familiar with the German credit market (and that is what credit bureau is based on), you know that there are fewer than a handful of providers who provide loans without credit bureau. These banks mainly support the distribution of their products to intermediaries, so that the number of providers is somewhat, but not significantly higher. If 177 requests are made, therefore, a high rejection rate is inevitable. But not only the number but also the type of inquiries contributed to the poor result. The test requests were divided into three groups. One group consisted of the unemployed, another from self-employed and small businesses. Both target groups can not receive credit without credit bureau because of the need for a dependent income from non-self-employment. The third group consisted of “over-indebted persons with incomes over the mortality allowances and existing pre-credits”. An essential part of the inquiries from this group should therefore not have fulfilled the conditions for lending.

The credit check is not based on the database of the credit agency, but on a supported by evidence to self-information of the prospect (proof of income, employment contract, account statements, etc.) and a query to the district court of the residence of the interested party. There, for example, it is possible to find out whether an arrest warrant exists for filing an affidavit but not whether payment defaults have occurred in the past.

Our vendors are easy to spot

Our vendors are easy to spot

The low placement rate of the study thus results from two distortions. Firstly, too many requests were made where the prospects did not meet the conditions for lending. Secondly, too many providers made inquiries they were searched through the internet.

The fact that many providers could not be expected more than (at best) “good air”, however, does make the credit bureau right in one respect: There are a number of unserious providers, the need and inexperience of many interested parties, romping around the credit bureaufreien loan market exploit. The rip-off meshes are rightly mentioned in the study: it sells unnecessary insurance, consulting and equity investments, advance fees required financial restructuring offered. At this point, we have repeatedly pointed out that such practices are an unmistakable warning signal and could disqualify the providers!

Media unsettle consumers

Media unsettle consumers

Nevertheless, a little more fairness would be appropriate compared to the serious providers. Loans without credit bureau can often prevent an escalation of financial difficulties. Ultimately, the study by credit bureau advises consumers not to go near “loans without credit bureau”. This can not be the goal: Those who are financially solvent and who do not receive a conventional loan due to negative credit bureau entries will continue to seek loans free from schaffles. If the meaning of the study (whose title is “Second Survey on the Dissemination of Our Practices in the Arranging of Consumer Loans”) were actually real-life research, it would have been more actively pointed out to serious providers can be seen.

Unfortunately, media coverage is not always suitable for improving the transparency that is so important in this segment. Too often, viewers and readers are unsettled by the mix of completely different facts. At the end of January, for example, a German TV station reported on the credit bureau study. A statement in the article was approximately: “With a loan, an apprentice with an income of USD 630 can afford an iPAD”. Also a reference to “usurious rates for lightning loans” was not missing. Both were mixed with “pre-cost rip off” etc.

If a trainee with 630 USD income receives a loan, it must be one with credit bureau information Loans without credit bureau require a significantly higher income. “Lightning loans” are so far only available in Germany. These are very different offers than credit bureau-free loans. Lightning loans, among other things, are significantly more expensive and do not contribute to a long-term solution to financial bottlenecks.

Therefore again the clarification: Loans without credit bureau are usual Annuittendarlehen (installment loans), with which the credit check is carried out on the basis of other sources than the credit bureau. A necessary condition for a loan commitment is, in addition to a sufficiently high, earning income, inter alia, an unconditional and permanent employment relationship.