The personal creditworthiness, ie the creditworthiness of a debtor, is essentially dependent on a regular and secure income in sufficient amount so that he can meet his financial obligations. In the case of unemployment, there is a lack of long-term security beyond the period of entitlement to unemployment benefits for one or, for older workers, a maximum of two years. Also, the amount left behind by the previous net income is often problematic. Collateral simplifies lending and conditions are better.
The internet adviser Kreditnetz.com, which specializes in loans for the unemployed, refers to assets that the loan seeker can offer in addition to his or her personal credit rating. Jewelry or coins will usually not be accepted by ordinary commercial banks, because appreciation, administration and custody would be far too costly. Pawn shops, on the other hand, specialize in such loans. Often it depends on the reason for borrowing. If you want to go on vacation on vacation, there is no real value in the money spent. If you buy a car, you can transfer it to the financing bank.
In doing so, one makes use of the legal difference between ownership and property. They become owners of the vehicle after the purchase, have the actual power of disposal, so they are allowed to drive at will, but not to sell. Because the bank is owner and has the legal power over the car. Therefore, a car loan despite Schufa entry is usually no problem. If a payment default occurs, the bank collects the car and sells it to offset the proceeds with the loan installments and interest due.
Use personal creditworthiness of third parties
An alternative to property as collateral is the involvement of other persons in the loan agreement. These may be co-applicants who become borrowers with equal rights and obligations when the contract is concluded. The lender can claim the full amount from each debtor. On a different liability in the internal relationship of the contractors, it is not on, the parties have to clarify among themselves.
For example, spouses do not have to pay for each other’s debts just because they are married. But if both have signed the contract, they are also mutually committed. An alternative is the guarantee for the loan amount by a person with good credit rating.