Consumers repeatedly ask in various forums whether there is also the possibility to get an instant loan with a negative Credit Bureau entry. In this context it should be noted that there is no general answer to this question. When an immediate loan with a negative Credit Bureau entry is possible and when not depends very much on the personal situation of the loan applicant. In theory, it is fundamentally possible to get a loan despite negative Credit Bureau information, but not for everyone.
The crucial question is always what kind of negative Credit Bureau entry it is. Credit Bureau is negative if a loan has been canceled or a payment order has been issued. The Credit Bureau is particularly negative if an affidavit has already been submitted to the local court or if private insolvency proceedings are ongoing.
The instant loan with negative Credit Bureau entry is difficult to obtain
For a better understanding, the statement should already be that there is usually no credit with negative Credit Bureau information. Exceptions prove the rule. This should be illustrated using the example for a better understanding. A loan seeker has a negative Credit Bureau with a completed dunning notice and requests an instant loan for a car from a car bank. He is already a customer of the car bank and also wants to make a down payment of almost 50 percent.
The loan applicant has been in the public service for more than ten years and earns more than 3,000 dollars a month. Here it can be assumed that the instant loan will be issued with a negative Credit Bureau entry. The bank takes almost no risk. If this customer applies for 50,000 cash advances from a direct bank, the decision can be very different. The direct bank will at least want to secure the 50,000 dollars with a guarantee.
In a second case, the loan seeker has just sworn affidavit or a current loan has been canceled. The termination has not yet been completed. Here the bank will not approve a small loan itself, but will simply reject the application without offering alternatives. An immediate loan with a negative Credit Bureau entry is not possible in this case.
If this customer only wants to take out a small loan, the option remains to apply for the immediate credit with a negative Credit Bureau entry via a credit broker who can arrange Credit Bureau-free loans. But even then some basic requirements must be fulfilled. The customer must be able to prove a garnishable income from dependent employment that has existed for at least one year. Credit Bureau-free loans are not available for the unemployed and for Hartz IV recipients. Even self-employed people or freelancers have no chance of getting a loan without Credit Bureau.
In summary, it can be summarized that the chances of an immediate loan with negative Credit Bureau entry for employees are quite good. Unemployed or Hartz IV recipients with a negative Credit Bureau hardly have a chance to get a loan from the bank. Foreign banks do not grant loans to the unemployed. German banks reject credit requests from people without work with negative Credit Bureau anyway.
In order to understand why banks reject some requests and in other cases approve a loan applicant despite a negative Credit Bureau, one has to know that the possible negative characteristics are not equally serious. A completed dunning notice or a credit termination that has been completed as well as other entries that can be explained do not automatically lead to a rejection of credit inquiries. However, there are so-called hard negative features such as sworn state insurance or personal bankruptcy, which in principle lead to rigorous rejection.
As soon as banks assess the credit default risk as too high, they do not issue an instant loan with a negative Credit Bureau entry. Banks only grant loans if they believe that the customer will repay the borrowed money. If it is foreseeable from the outset that the customer is too risky, the requested loan will be rejected.