Regardless of whether it is a loan for retirees, a loan for students or a loan without SCHUFA: Loan collateral is an important design element for loans. In this article are credit collateral shown. One security can at one Loan to be used at all to get a loan, or to better conditions to obtain. This is how loan collateral plays a role Credit for pensioners, credit for students, Credit without, a crucial role. But even with car loans, the KFZ letter is usually deposited as security. You can find out which banks take your car as security here. Few banks offer one Car loan without car registration at.
Offering collateral equal to the loan amount is also included Low income loan a way to get the loan approved. If the income is low, real assets can be offered as collateral and the loan can also be concluded with a guarantor. This gives the credit a double bottom, and most banks will approve an installment loan under these conditions.
|Credit Security|| |
|land charge / mortgage ||property|
➕High loan-to-value ratio for hedging
➕Possibility if you don't have your own home
➕In the event of damage, the bank receives compensation from the insurance company.
➖ Costs for land charge registration
➖ Not possible if the property is already encumbered with a land charge higher than the lending value.
➖ The bank acquires the right to foreclose on the property if the loan installments are not paid.
- Fully comprehensive insurance required
➖ The value of the vehicle must be appraised by an expert.
➖ If the borrower defaults, the car becomes the property of the bank.
|guarantor||➕ The loan is often approved with a guarantor with a good credit rating.|
➕ Your own children or good friends/relatives are suitable as guarantors
➕ Your own children will inherit the debt anyway, resulting in no further disadvantage for you as a guarantor.
|➖ the creditworthiness of the guarantor is also checked.
➖ the citizen is liable for the loan amount.
➖ Spouse cannot be a guarantor.
|second applicant|| |
➕ The loan is often approved with a second applicant with a good credit rating.
➕ Your own children or spouse are suitable as second applicants.
➕ Your own children will inherit the debt anyway, which means that there is no further disadvantage for you as a second applicant.
|➖ The creditworthiness of the second applicant is also checked.
➖ the second applicant is liable for the loan amount.
|Residual debt insurance (RSV)||➕ In the event of death, heirs are not burdened by residual debts|
➕ high acceptance by the banks
|➖ Credit rates increase|
|pledge||➕In addition to the mortgages on cars or real estate mentioned above, mortgages on other valuables such as jewelery or similar are also possible.||➖ Little acceptance by credit institutes as special storage is required.
➖ High effort for the bank.
|savings balance||➕ Liquid security with good bank acceptance|
➕ Savings are recognized as security at 90 - 100 %
|➖ Credit may only be partially recognized.
➖ As a rule, the lack of savings is the reason for the loan application
|Wage and salary||➕ Wages and salaries from permanent employment are one of the best forms of security|
➕ Also recognized by foreign banks
|➖ The self-employed find it more difficult to provide proof of salary and usually have to prove 2-3 years of salary|
|securities||➕ Liquid security with good bank acceptance|
➕ Securities can be pledged up to 90 % depending on the type
➕ Favorable conditions (see Securities Loan Comparison)
|➖ Dynamic calculation
➖ Margin calls
The loan collateral land charge and mortgage
A land charge or mortgage is security with a real, material value. For this purpose, the land charge is entered in the land register of the property. If the borrower defaults on payment, the bank has the right to put the property into foreclosure. The bank is entitled to the registered land charge regardless of the sale price. So if the property is sold for more than the remaining debt on the loan, the excess goes to the borrower. However, if the remaining debt cannot be recovered at the auction, the bank is still entitled to reclaim the land charge.
Mortgages and land charges are similar. The terms are often used interchangeably. There is the following difference:
- land charge: A land charge remains in the land register even after the loan has been repaid. Their value does not change. In addition, it must be actively deleted.
- mortgage: The value of the mortgage decreases as it is repaid. In addition, the mortgage expires automatically once the loan has been repaid in full.
The loan security: guarantee
The guarantee by a guarantor with a good credit rating represents a high level of security for the bank. Therefore, a loan application with a solvent guarantor is often approved. Since the children or other heirs will inherit the debt anyway, it can make sense to name them as guarantors.
|TIP*: Self-enforceable guarantee. With this guarantee, the guarantor is liable as if he were a debtor himself. Therefore, this form of guarantee represents a very high level of security for the bank. In return, the risk for the guarantor is also higher. However, it is possible to distribute the amount of the guarantee to several people (e.g. your own children). In this case, the guarantors are only liable up to the proportionate amount.|
Acquaintances, relatives or business partners are also suitable as guarantors. On the other hand, spouses are not accepted due to the close emotional bond with the applicant.
Important: The creditworthiness of the guarantor must be right. This is checked by the banks on the basis of documents to be submitted, such as proof of income. However, with a regular medium-level income and a positive credit bureau, the chances of good credit conditions are excellent. Also important to know: If children or heirs act as guarantors, you are liable for them. You can then no longer turn down the debt, as would have been possible without a guarantee.
Children as co-applicants are also collateral for the loan
The situation here is similar to that of a guarantor: a second or co-applicant with a good credit rating represents a high level of security for the bank. Therefore, a loan application with a solvent co-applicant is often approved. Since the children or other heirs will inherit the debt anyway, it may make sense for them to act as co-applicants. In contrast to the guarantee, a co-applicant cannot limit liability, but is always liable for the full amount. Another difference to the guarantor is that a co-applicant can also be the spouse.
In addition to your own children, acquaintances, relatives, business partners – and – spouses are also suitable as co-applicants.
Important: The creditworthiness of the co-applicant must be correct. This is checked by the banks on the basis of documents to be submitted, such as proof of income. However, with a regular medium-level income and a positive credit bureau, the chances of good credit conditions are excellent. Also important to know: If children or heirs appear as co-applicants, you are liable for them. You can then no longer turn down the debt, as would have been possible without a guarantee.
Liens on valuables are rather inappropriate as credit collateral
A lien on movable property such as jewellery, art or valuable antiques can also serve as security. In order to serve as collateral, these items must:
- Possess adequate liquidity, i.e. easy to sell.
- Be easy to handle, i.e. as compact as possible and without special storage conditions.
A prerequisite for the right of lien is that the item is handed over to the bank. Only then does the creditor have a legal claim. In addition, there must be agreement on the value when the valuable is handed over. Since the lien creates a lot of work for the bank overall, This type of security is rarely used.
Residual debt insurance as a loan security?
One residual debt insurance is an insurance that pays loan installments in the event of death, illness or unemployment. The RSV charges fees for this service, which often have a noticeable effect on the overall costs. Furthermore, the costs increase with the age of the borrower. Therefore, the RSV is often very expensive for older people!
Liquid loan collateral: savings and deposits
Savings and share accounts can also be pledged and used as security. A loan is taken out with an existing credit balance. This is useful when the borrower receives more interest on the balance than they have to pay on the loan. In doing so Savings on giro, day or time deposit accounts often to 100 % accepted. Securities such as shares, ETFs or bonds, on the other hand, are only partially recognized as they are subject to price fluctuations. There is at domestic defaults a loan-to-value ratio of 60 % of the current market value. In the case of foreign shares, on the other hand, only 40 % of the current market value can often be traded be encumbered.
Pledge of wages and salaries
Wage and salary from a permanent employment relationship is one of the best securities and usually necessary for one installment loan. This security is also recognized by foreign banks. At a Swiss credit for Germans For example, proof of wages is required from €1,100. The self-employed find it more difficult to provide proof of salary and usually have to prove 2-3 years of salary.
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