It’s a question that banks almost always ask when an individual asks for a loan: is there a chance that a second borrower will join in? The money houses explain this by saying that then approval of the loan would be much easier for them. In many cases, however, the option does not exist. It must be a loan without a 2nd borrower. This is by no means impossible, but it is clever to dispel the concerns of the banks.
Credit without second borrower: Why is a second person needed?
As already indicated, the likelihood of assumption increases significantly when applying for a loan together with (at least) another person. This has very simple reasons: First, both borrowers may earn. The credit rating is better and the risk decreases that it comes to defaults. However, if this happens anyway, the bank still has two people to hold onto to claim its financial claims. In addition, banks are very reluctant to say that two families usually have two families in the background, who provide unbureaucratic help in the event of payment defaults. You must forego these benefits if you have a loan without a second borrower – the bank expects a good explanation in the sequel,
Under these circumstances, a loan without a second borrower is not critical
However, there are some cases where you can safely apply for a loan without a second borrower. This applies on the one hand for very small sums and on the other hand, if your credit rating fits. As a guideline: Loans up to 3000 euros are not critical for most financial institutions. Two people do not necessarily have to act as borrowers here. If you also (at higher loans) after deduction of the loan, the cost of living and the material costs (house, apartment, car insurance, etc.) still at least 500 € per month, you should also be able to easily get a loan without a second borrower. It is worth setting up an appropriate cost plan to convince the bank.
So you get a loan without a 2nd borrower in critical cases
Suppose the case is critical because your credit rating does not fit and / or the loan amount is too high: even then you can get a loan without a second borrower. In the best case, you bring a guarantor. This is the weakened version of a second borrower: Officially, the guarantor does not apply for the loan, but declares legally binding that it will take action in the event of payment defaults.
If you do not have a guarantor, you can also convince the bank with collateral. As an example: You want a car financing, but have a house. In such a case, the bank will be ready to give the loan if there is not already too much financing against which the homeowner stands. In an emergency, you can finally raise the required amount by selling the property.
Alternatively, you can also argue about equity. Let’s stick to the example of car financing: You do not have a second borrower, but you can pay one third of the purchase price out of pocket. The bank sees that you are serious and you also have savings – so budgeting with your income is possible.
Lastly, you can get a loan without a second borrower even on a convincing cost account: Put in the case, you purchase an apartment for 62,000 euros, but the market price of the apartment is 70,000 euros, so you will not have a problem getting the loan needed to get. After all, the bank knows that you can sell the apartment with enough profit if necessary to pay back the money.