Credit without proof of income - Find out more about the background and significance
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WHAT IS A LOAN WITHOUT PROOF OF INCOME?
Taking out a loan without proof of income means that you do not have to provide proof of your income in order to borrow money. This type of loan is particularly interesting for people with irregular income that is difficult to prove.
Proof of income includes, for example:
Payroll accounting
Tax assessments
Account statements
Employment contracts
Pension notices
Balance sheets, BWA or surplus income statements (for self-employed persons)
Befög notifications (for students)
Rental or leasing income
Benefit notices such as unemployment benefit or social assistance
As the lender has a higher risk of non-repayment without this proof, you may have to pay higher interest rates or provide collateral such as real estate or insurance. In addition, the possible loan amount is limited.
WHAT IS THE MINIMUM INCOME REQUIRED FOR A LOAN?
To find out what income you need for a conventional loan, there are a few points to consider. Your income must be sufficient to cover your living expenses and fixed costs as well as a possible loan installment. The criteria can vary depending on the provider. Some lenders insist on a minimum income, others take general creditworthiness into account. At a pawnshop, you generally do not need an income for a loan, as you are only liable with collateral.
HOW DOES A LOAN WITHOUT PROOF OF INCOME WORK?
If you have alternative collateral such as real estate or expect to pay out an insurance benefit, this increases your chances of being approved for a loan. A guarantee is also a way of offering lenders sufficient security for a commitment. In most cases, however, the procedure is as follows:
You submit a loan application for a loan without proof of income.
You indicate whether you can provide other collateral - e.g. guarantees from third parties, assets, savings or a positive credit rating.
Your potential lender will check your application and may request further documents from you.
If you are approved, you will find out everything about the possible loan amount, your interest rate and the term.
Payment is usually made within 1-5 working days.
Repayment usually begins the month after you take out your loan.
Exception: With pawn loans, only your collateral is assessed. You do not have to provide any further collateral and will be paid out up to 70% of the pawn value as a loan. You can also pay out up to EUR 9,999 in cash for pawn loans.
WHAT DO I HAVE TO CONSIDER IF I WANT TO TAKE OUT A LOAN WITHOUT PROOF OF INCOME?
As the risk for your lender is higher without a regular income, you will probably have to pay higher interest rates and fees. In addition, the amount you can borrow will be lower. Also note that many providers require alternative collateral such as a guarantee, property ownership or life insurance, for example. Even without proof of income, creditworthiness is checked in most cases. Only pawnshops do not usually carry out this credit check, as you are only liable with your collateral.
Make sure that you can actually repay the loan you have taken out so that you don't fall into a debt trap. A pawn loan is known as a loan without debt, as in the worst-case scenario you lose your collateral but are completely debt-free afterwards.
HOW CAN I RECOGNIZE A REPUTABLE PROVIDER?
You should pay very close attention to the reliability of your potential lender. These points can help you to find a trustworthy provider:
Make sure that the company has a company number. You can check this VAT number online at any time and check whether it really exists.
You should be able to see all interest rates, fees and conditions clearly on a website that offers loans without proof of income.
Be careful with advance payments! A reputable provider will not charge any fees before a loan is approved or paid out.
Caution is advised if an offer seems too cheap. One characteristic of unrealistic offers, for example, is that the interest rates are much lower than for a traditional bank loan.
Search for customer reviews. If the majority of borrowers leave a positive review on independent platforms, this may indicate that the provider is reputable.
The website should be professionally designed. This means that you should find contact information, an imprint and a privacy policy. The URL of a secure website should begin with https://.
Try to contact your desired lender by telephone. Reputable providers usually have a competent customer service team.
If a lender wants to pressure you into taking out a loan, in most cases something is wrong. Don't be persuaded to sign contracts quickly if something is still unclear.
HOW QUICKLY CAN I GET A LOAN PAID OUT WITHOUT PROOF OF INCOME?
This depends on how carefully your lender checks your documents and what the requirements are. With banks, it can take up to two weeks before you receive a commitment or pay out. Online platforms such as Giromatch can usually put you in touch with private lenders more quickly and let you know whether financing is possible. Payment is made within a maximum of 5 working days. With pawn loans, you can have part of the value of your item paid out immediately in cash if you wish (up to EUR 9,999), and a bank transfer is also possible immediately.
WHICH TYPE OF LOAN IS SUITABLE FOR ME IF I NEED A LOAN WITHOUT PROOF OF INCOME?
Of course, your individual situation always plays a role. It makes a difference whether you are self-employed or freelance. Perhaps you are currently changing jobs and looking for work, studying or still in training. Below you will find an overview of various loan options without proof of income:
Pawn loans: You get a loan for part of the value of a pawned item. This can be jewelry or electronics, for example. If you own a car, you can also take out a car pawn loan.
Loans from private individuals: Most loans from private individuals are arranged via various online platforms. You borrow money from a person instead of a bank, so the conditions are often more flexible.
Loans with a guarantor: If you have someone who guarantees your loan, they will cover the costs in the event of your insolvency. If you can find someone who has a regular income, this will increase your chances and you may also be able to get a loan from the bank.
Credit cards with a credit line: With some credit card companies, you are granted a credit line from the outset that does not depend on your income. With some providers, you can also pay in installments afterwards.
Overdraft facilities: If you have a current account, you can have the bank set up an overdraft facility or overdraft facility.
ADVANTAGES AND DISADVANTAGES OF A LOAN WITHOUT PROOF OF INCOME
Before you decide on this type of loan, you should consider the following points:
ADVANTAGES | DISADVANTAGES |
|---|---|
Easier accessibility | Higher costs |
Faster processing | Lower loan amounts |
Less paperwork | Collateral required |
Data protection (anonymity) | Search for reputable providers |
MEANS CREDIT WITHOUT PROOF OF INCOME EVEN WITHOUT A CREDIT CHECK
No, these two points are fundamentally different:
Loan without proof of income: With this type of loan, you do not need to provide proof of your regular income. So if you are a freelancer, self-employed or simply a person with irregular employment, this point is important for a possible loan approval. Because if you still have a good credit rating, your lender will know that you can reliably meet payment requests.
Credit without a credit check: Your potential lender does not check your creditworthiness. This means that no query is made in a debtor register. The credit check is rarely waived. It shows your lender whether you are in a position to reliably meet your financial obligations. Only pawnshops do not carry out a credit check for classic pawn loans, as you are liable with your item as collateral and your credit rating is therefore irrelevant.
FREQUENTLY ASKED QUESTIONS
When is a loan without proof of income suitable for me?
This type of loan is particularly suitable for freelancers and the self-employed, for students, the unemployed or people with irregular employment.
How realistic is a commitment for a loan without income?
This depends on whether you can provide further collateral such as a good credit rating, property ownership or similar. With a pawn loan, you will receive your approval and pay out with suitable collateral on the same day.
How can I have my money paid out?
With banks or providers of personal loans, a transfer to a current account is common. With pawn loans, you can also have your money paid out in cash up to EUR 9,999. In some cases, it is also possible to have your loan paid out via PayPal.
What counts as proof of income?
In addition to normal payslips, tax returns also count as proof of income.
What documents do I need for a loan without proof of income?
You will need an official photo ID confirming that you are of legal age, proof of creditworthiness (except for pawn loans), proof of residence and, in the case of banks or loans from private providers, often also bank statements or business documents.