Consumers borrow for a variety of reasons. They finance their studies, travel or owe their money. What many do not know, though, is that a loan request can affect their own credit rating and Bank. Find out now what to look for in a loan request to make it credit neutral.
In 2016, there were 7.67 million new installment loans in the Federal Republic of Germany. What defines a loan request? How do you make a loan request without negative Bank impact? Does the credit term request represent a good alternative to ensure a stable credit rating? These and other questions will be answered by the following article.
Credit inquiry: Definition and difference to the loan application
Many terms, one solution – The loan conditions request
If you are looking for a suitable loan, you will find many different terms. This can quickly lead to confusion of the customer.
Overall, it is important to distinguish three terms.
Two requests lead to one goal The loan condition request and the online loan request are used to request the terms of a small loan to achieve the goal of the loan application .
Before the bank approves a loan, the bank asks Bank for the creditworthiness of the consumer. The so-called ” request credit” – AK for short – leads to an increased score , if asked at several banks for the conditions. If the banks pass these on to the Bank as AK, there is a suspicion that several loans are being requested. As a result, the protection community assumes bad economic conditions for the borrower . As a result, lending on the loan request fails. If the banks make a credit inquiry (KK) this does not affect the Bank.
Ask for a loan condition request If the customer wants to obtain information on the terms of loans without triggering a negative score in the Bank file, a credit condition request must be made . If the bank adviser transmits the request to the Bank, this does not affect the score of the customer. This is also the principle followed by Bank. If the customer would like to take out a loan with Bank, the examination takes place over a loan condition inquiry.
There is a significant difference between the loan application and the loan application . The former puts the bank to the credit agency. This is a control of the economic situation. When applying for a loan offer, the bank must be commissioned to initiate the loan process. During this the credit processing of the house bank checks the creditworthiness. In the course of this process, the loan request may be made.
Plausibilisiert the bank the loan application on the basis of the account data, it places for example the conditions request to the credit agency. Due to this condition request no negative Bank entry is to be feared.
Credit inquiry without negative Bank impact – The solutions
Significance and advantages of the credit condition request for a credit request without negative Bank effect
If bank customers make a loan request to a German bank, the bank forwards the financing request to the Bank. If the applicant is sufficiently creditworthy, the trade-neutral characteristic “request credit terms” is used. This indicates non-binding information about the current financing conditions of the credit institutions.
The process brings no negative consequences for the bank customer, as he inquires about the possible credit conditions – for example, an installment loan. As a result , the money house with the condition request to the credit agency , if it answered the loan request positive.
Note If the customer asks the condition request, the different conditions of several banks should be compared. If the house bank sends the inquiry to the Bank, it remains stored in the Bank file for twelve months. If you want to be creditworthy, you can delete specific Bank entries. Other contractual partners of the credit agency – for example, other banks or savings banks – do not see the conditions request in the file. It therefore has no influence on the creditworthiness.
How is the condition request different from the loan request?
Just like the loan condition request, Bank stores the loan request for one year in your file . One difference is the publication of the information. Other contracting parties of the credit bureau consider the feature over a period of ten days . If the lender asks a loan request from several banks, the entries will result in a poorer creditworthiness. As a result, the bank receiving the loan application rejects the request because of the supposedly negative credit rating.
Another difference is the liability. The condition request has a pure information character . For the time being, no documents will be submitted. Only after the loan comparison follows the binding credit request.
Expiration of credit condition request
How is the request for conditions made at the Bank?
In order to know the credit terms at the house bank, it is advisable to contact a bank adviser . Alternatively, a corresponding online form must be completed.
Condition Request or Loan Request – What’s Better for the Consumer?
During the personal conversation, it should be explicitly stated that non-binding information is desired. Otherwise there is a risk that a binding loan request will be made by mistake.
As soon as the consumer expresses the request for the condition request, a request process is started:
- First, the house bank checks the payroll , in order to prepare the possible offers based on the income. Foreign providers and banks, for example, control the account statements.
- Subsequently, a credit check is made at the Bank . For this purpose, the bank sends the personal data of the customer – name and date of birth – to the credit agency.
- Within a short time, Bank uses the data to check bank account details and current loan agreements .
- This Bank-information sends the credit agency with the determined score value to the house bank.
- On the basis of the value , this decides on the lending rate and formulates a non-binding offer.
The request process can easily be repeated at multiple banks to compare the loan terms.
Tips and tricks for the loan conditions inquiry
What should be considered when making the credit inquiry?
If the customer is interested in price comparisons of the loan offers, the information should be obtained through the Bank’s usual procedure. Some banks automatically make an online loan request. In order to avoid that the concern has a negative effect on the credit rating, the comparison of conditions should be required . Before the home bank or external bank forwards the request, it informs itself about the desired amount of the loan.
Often she asks for the reason for borrowing . Before making the request, customers should inform the loan officer about current loans. For third-party banks, it is recommended to submit the salary and payroll statements for the last quarter. If the bank submits the credit terms to the customer after the request, the customer should not necessarily enter into the first offer.
tip Several credit institutions should be visited. Thus, the borrower benefits from a comparison of conditions. The client should compare the offered interest rates given the available financial resources: How long does the loan run? How high are the interest rates? Is it worth a monthly or a balloon repayment?
Loan providers in the network
For banks, the cost of a loan is made up of several individual items. In addition to the nominal loan rate, the processing and payment fees play a role. The fees prove to be lump sums, which offset the processing costs regardless of the amount of the loan. For example, banks use them to finance the maintenance of branches .
Unlike many banks and other online loan offerings, Bank does not charge for normal processing and disbursement.
For example, the uncomplicated Bank loan calculator can be used. This is primarily suitable for comparing small loan amounts. The customer specifies the desired loan amount and the term. The program automatically calculates the repayment , specifies debit interest and the annual percentage rate. The legislator prescribes its indication with each loan offer. To assess the offers, the customer does not require any economic expertise. If you want to apply for a loan immediately, you can do it online in just a few steps.
The exchange of information between Bank and Bank
Loan request without negative Bank effect: How do banks work together with Bank?
If the customer makes a loan request, the bank sends a loan request to the Bank . Both institutions work together . The bank proves to be a contractual partner of Bank Holding AG. Both companies are responsible for as few credit losses as possible under the Basel rules. In some cases, banks hand over responsibility to other credit reporting agencies.
Bank stores credit and credit data of bank customers. On the basis of this data, credit institutions create individual loan offers. People with a bad score face high credit conditions or credit rejection.
How does the Bank request affect your score?
If the bank sends a credit request to the Bank, it will save it. Up to ten days after the trial, other contractors of the credit bureau see the note in the file . If the customer makes another credit request within one year, creditworthiness may decline. There is a plausible reason for that. If the Bank notes several credit inquiries of the customer in a short time, this urgently requires a loan . Bank and the bank therefore suspect a bad financial situation. If the bank fears the repayment of the loan amount, it rejects your loan request. In addition, some groups of people, such as single mothers , in some cases have difficult conditions to obtain a loan.
The majority of banks are losing sight of consumers who are comparing conditions only. If the customer is interested in the comparison of loan conditions , the loan request should be waived. In addition to the usual procedures to compare the loans on the basis of the condition request, care should be taken to keep the Bank score in view and to improve it continuously.