How do you recognize dubious loans?
January 28, 2020
In order to be able to finance purchases, loans are being taken up more and more often these days. In addition, short-term loans are ideal for bridging financial bottlenecks. If the credit rating is correct, then there is usually no problem in getting a very cheap and fair loan.
Almost all large banks offer favorable conditions not only in their branches but also on the Internet. As a prospect, it is very easy to find out in advance about all the terms and conditions relating to the loans of the corresponding bank and to simplify the selection of the right loan in this way. The prerequisite for a cheap loan is not only a high income but also a more or less clean private lender. Negative entries often have a negative impact and make taking out a loan from one of the traditional banks almost impossible.
If the creditworthiness is poor, there are not many options left for taking out a loan. Most of the time you have to strive for a loan that is granted without asking private lender. As a rule, such loans are granted by banks that are headquartered in Switzerland.
However, since these loans can only be applied for directly from the bank if you are going to Switzerland, many credit intermediaries in Germany offer their help in concluding a loan agreement. You can usually find them on the Internet. But also in daily newspapers and magazines, you can read about the offers of the intermediaries.
Unfortunately, not all offers can be classified as serious. Rather, there are some black sheep in this industry who try to improve their own financial situation by allegedly brokering credit. But how do you recognize dubious loans and how can you avoid them?
Check credit closely
In the credit area, it is very important to check every offer very carefully. Especially with private lenders and companies that want to establish themselves in the industry with very special loans, the control of the offers should be very thorough and conscientious. Some of these special loans are predestined to be classified as dubious. Even worse: some of these offers can also be described as criminal.
As a borrower, you are always faced with the problem of distinguishing dubious loans from reputable loans. No provider will advertise that he works frivolously. Despite all of this, you can often tell from the website whether the loan advertised there is serious or not.
The credit advertisement
Small newspapers are often read in daily newspapers, magazines and on the Internet, which, for example, promise an instant loan of up to USD 100,000 even if the private lender cannot be queried. The catch on such offers is so big that you can recognize them quite quickly. So no reputable loan provider will grant a loan in this high amount without having thoroughly checked the borrower’s creditworthiness in advance. And for this to happen, the Schufa must be queried, among other things.
So if you want to take out a loan with a large sum without private lender and without other collateral, you will usually fall into a trap. Because there is simply no such thing. Someone may want to earn a lot of money here. And at the expense of those who fall for such dubious offers.
Loans for the unemployed, Hartz 4 recipients, consumers in bankruptcy or over-indebted people without guarantors or other security are not really serious. Those who do not bring collateral are not creditworthy either. Almost all promises in this direction can be classified as dubious!
Interest on bad loans
If loan interest rates are well above the industry average, it can often be assumed that the loan is not serious. Reputable banks are roughly at a uniform level in terms of interest on loans. They may vary a little in terms of creditworthiness, but huge differences are not to be expected. If you are now offered a loan that is significantly above this interest rate level, you should examine it in more detail.
Tip: In order to be able to determine the current interest rate level before borrowing, it is worth taking a look at the Internet. With the help of a credit calculator, you can not only display up-to-date loans with attractive interest rates but also compare these interest rates very well. Our topic special about reputable credit brokers also offer assistance.
Processing fees and prepayment
Some loan providers charge a processing fee or even prepayment for their loans. In general, you should be careful here. Anyone who has expenses will only claim them when the loan has really come about. The processing fees are a little different. Each bank must be able to disclose and explain the processing fees. Hidden fees are not allowed. The fees are always included in the annual percentage rate.
Conclusion on dubious loans
Before signing a loan, it is always worth taking a closer look at the offer. Very high-interest rates, prepayment without consideration and unexplainable processing fees are not a good sign. They may indicate dubious practices. Likewise, offers that promise a loan even if the prospect has no income and no guarantor.