Almost everyone is familiar with the term “credit-independent installment loan at a fixed rate”. However, not everyone looking for a loan has a clear idea of what is behind the concept. This loan is quickly confused with a “no” credit rating. But he has nothing in common with that. The applicant must always have sufficient creditworthiness for this loan.
A credit-independent installment loan at a fixed rate
A credit-independent installment loan appears in the middle of every credit calculator listing. This variant of an installment loan is not always called that. The term credit-independent fixed-rate loan is used more often. In other listings, the description is completely omitted. Then the overview only shows the effective interest rate instead of “initial effective annual interest rate or from an interest rate …”. Independent of creditworthiness does not mean that no creditworthiness is required. The equation with a credit with no credit rating is therefore wrong.
Ultimately, it is a fixed-rate loan that is granted regardless of the interest rate impact of the current credit rating. The applicant’s personal creditworthiness simply does not affect the interest. This means that an interest rate applies to everyone to whom the loan is granted. This procedure is disadvantageous for very few. Only people with an above-average credit rating, such as civil servants or judges, pay a little more. If you have a slightly poorer credit rating, for example a simple employee, you get your loan a little cheaper. For all others, the interest rate corresponds approximately to that which would also be payable under a credit-dependent loan.
What are the benefits?
A credit-independent loan has advantages for almost everyone involved. The loan provider can do without a complicated and more elaborate credit check procedure. The simplified credit check saves him labor costs. The process is also accelerated. The borrower gets the approval faster. A lender can process more applications with the same staff.
The simplified check pays off, especially for small installment loans. The risk remains manageable in view of the small loan amounts, and on top of that, the lender’s external perception is better. The fast and uncomplicated credit service is valued by its customers.
In which cases is this form of credit worthwhile?
An installment loan that is independent of creditworthiness is particularly often offered by senders of goods. The emergence of credit requests would be different, even outside of weddings, probably not timely. Many providers of small loans in the online process also use this option. Small amounts of credit can almost always be realized, so the somewhat increased credit risk is compensated for.
When it comes to car loans with fixed interest rates that are independent of creditworthiness, it is above all the customer request for secure interest rates that the providers of vehicle loans satisfy in this way. With the loan application, every detail of the interest obligation is fixed for the vehicle buyer. An installment loan with fixed interest rates that is independent of creditworthiness leaves the risk of interest rate fluctuations with the lender.