When you are self-employed, it is often difficult to get a loan from a bank or credit institution. Because the banks often demand regulated monthly salary statements, which a self-employed person usually cannot provide. Because if you are self-employed, your monthly income can fluctuate considerably. Then a positive Credit Bureau information helps above all. But what to do if there are already other entries here.
What collateral should you be able to provide as a self-employed person?
To apply for a loan with Credit Bureau entry for the self-employed, the bank requires a lot of collateral from the borrower in order to be able to approve the loan application. A successful exercise of self-employment should have been demonstrated for many years. Of course, this also includes the submission of regular income and a corresponding monthly income. It is good if the independent borrower can submit a business analysis to the bank or credit institution.
What does a negative entry mean at Credit Bureau?
Neither should there be any negative entries in the Credit Bureau. This means that the borrower may have Credit Bureau entries for loans already taken out. However, these loans must also be paid at the monthly installments and the borrower must not be in arrears with them.
Only if he falls behind with the installments for a loan and this loan has possibly already been canceled by the lending bank, does the borrower receive a negative Credit Bureau entry, which then affects the application for another new loan, so that the self-employed person gets the loan possibly not received by the requested bank.
What collateral can the lender possibly ask for?
In the case of a Credit Bureau loan for the self-employed, the bank or credit institution can also request a guarantee from a third party who has nothing to do with the borrower’s independence. The lender can use a guarantor, for example, who has a permanent employment relationship and can use this to provide the monthly evidence, for the loan amount paid.
The bank can also use the borrower’s claims against other people or institutions, such as from life insurance or a larger order, as security. In the case of a loan with Credit Bureau entry for the self-employed, a property such as a house or a condominium can also be accepted as security, in which case a corresponding land charge is then entered. The last to be mentioned here are motor vehicles and larger machines with a certain value, which the bank’s borrower can also overwrite as collateral for the time it takes to repay the loan.