In principle, a loan without a guarantor is possible in many cases. Bringing a surety only means adding additional security to the loan applied for. The guarantor must be a person who is over 18 years old, has a monthly income as regular as possible and has no negative entry in the Credit Bureau.
Family members, partners or friends are usually considered. However, making use of a guarantor also means that you have to make an additional commitment to this person, disclose your personal circumstances and share responsibility. Since this can be very stressful for any relationship, a loan without a guarantor is definitely less stressful.
Loan without guarantor – possible in most cases
If you need a loan, it is first of all important for the credit institutions whether you have a fixed employment contract and thus a regular income. If this can be proven, some types of credit can be obtained without additional collateral. In the case of an overdraft facility on the current account, for example, regular receipt of funds is entirely sufficient.
Often, the account holder is automatically granted a credit line after a period of six months, but one should bear in mind that the interest on an overdraft facility is relatively high. A small loan of up to 5,000 USD is also covered by the proven income if there is positive Credit Bureau information, and at most requires installment loss insurance.
The situation is different for loans that go beyond small loans. Additional collateral is required for higher amounts. In the case of car financing (but only for vehicles that are less than three years old), this can be the transferability of the vehicle as security or, in the case of a “normal” installment loan, the pledging of existing securities. A loan without a guarantor is also possible if there are life or pension insurance policies that have already been paid for. These can be assigned to the bank, whereby the assignment only affects the amount of the loan and expires after full repayment.
If a property is to be financed, it is usually included in the contract as equivalent or security and the credit institution has a land charge registered in the land register. In addition, life insurance can be taken out, which can also have advantages for the borrower.
During the life insurance period, the borrower only pays the bank the monthly interest and the insurance premiums. If the summer is due, life insurance will replace the loan and any surpluses will flow to the borrower. However, this variant should be checked in individual cases, because whether it is a cheap option can only be clarified with personal circumstances.
Loan without guarantor – no collateral or negative credit
When the bank requests additional collateral and there is no collateral, there is often a demand for a guarantor. This also applies if the Credit Bureau reports a negative entry. Most of the time, however, nobody should know about the financial worries or there is no guarantor, so a loan is only possible without a guarantor. In such cases, there is often only the way out of the loan without Credit Bureau, which is usually limited to 3,500 USD and includes higher interest rates.