Foreign credit: how to apply for it and for whom it is suitable
A loan from abroad comes with numerous advantages over domestic loans. First of all, it should be noted in this connection that a loan from abroad does not differ much from a domestic loan. Maturities, conditions and repayment structures are more or less identical.
However, there are differences in the application for loans and the granting of loans. Foreign lenders refrain from providing Credit Bureau information, which is due to the fact that a community of this type is a typical German model. However, there are still some requirements that can vary from bank to bank and country to country. A Liechtenstein bank, for example, requires different credit certificates that confirm the creditworthiness of a potential borrower than a French or Italian bank – at least in most cases.
On the Internet, many portals that specialize in foreign loans, but also large foreign banks, can directly look for suitable information, which conditions apply to foreign borrowers and whether there is any possibility of getting a foreign loan. In the EU area, the chance of a loan from a foreign bank is e.g. B. significantly higher than in non-EU countries, also due to the usual currency fluctuations, which represent an additional risk for lenders and borrowers in addition to interest rate fluctuations.
The main requirements for a loan from abroad
As mentioned, the main difference between a loan from abroad and a domestic one is that the lender refrains from providing information to Credit Bureau. However, he wants certain conditions to be met.
- Depending on the type of lender, bank and country, this includes proof of income. As a rule, the amount of the proof of income depends on the number of dependents. A single person who only has to take care of himself already receives a loan with significantly lower proof of income than a person who has to support an entire family.
- Another requirement that many banks require is age. As a rule, the borrower must not be younger than 18 or 21 years old and no less than ten years younger than the legal retirement age of his country of origin. In Germany, the age limit is 57 years. However, southern banks are generally much stricter than central and northern European credit institutions.
- As in Germany, in many other countries, the self-employed have significantly more problems getting a loan because the requirement for a regular income is theoretically not fully met. Even pensioners and the unemployed have little chance of getting a loan from a foreign lender.
How to apply for a loan from abroad
Nowadays it is possible to take out a loan from abroad without problems via the Internet. Experience has shown, however, that it is much safer to seek a personal conversation with the bank or lender where a loan is to be taken out. In this way you get to know each other and the borrower can prove his seriousness.
Another advantage of the personal loan application is that you can take a close look at the credibility of the lender. There are so-called loan sharks not only in Germany, but also in other countries that try to defraud with hidden clauses.
If you want to apply for a loan from abroad due to the travel costs or time problems on the Internet, you should first look at comparison portals, which many foreign lenders analyze and compare.
It is also highly recommended to use a credit broker. Although this receives a commission, which is usually associated with increased expenses for the borrower, a reputable foreign credit agency usually bears the risk if the lender is untrustworthy. There are also many customer review portals where you can find out about the agencies that provide foreign credits.
Reasons for using a loan from abroad
Many people have a Credit Bureau entry, which is not negatively affected in a few cases. With each new rental or mobile phone contract, the contracting party usually first obtains information and then gives Credit Bureau a note that the person concerned is taking on new obligations. In the case of a mobile phone contract, the duration of the liability is based on the length of the contract, and in the case of rental contracts on the notice period.
Even with a loan, the bank usually obtains Credit Bureau information, which means that it is more difficult for many borrowers to get a loan. However, Credit Bureau receives a note from the bank with every loan application, regardless of whether it is positive or negative.
In order to have no problems with moving into a new apartment, but also with a new mobile phone or other contract due to negative Credit Bureau information, more and more people in Germany are trying to circumvent the Credit Bureau clause, especially when applying for a loan. Therefore, they resort to the increasingly popular option of a loan from abroad. As a result, Credit Bureau does not even know that a loan application has been made because other countries do not know the protection community as such.
Even if you are not granted a loan abroad, you at least avoid the risk that Credit Bureau will include the application as an item in a person’s Credit Bureau balance sheet.