The fact that borrowers cannot specify an employer is due to various factors. Applicants are often self-employed, others are unemployed or are looked after by their partners. In all cases, borrowing without an employer is difficult.
Self-employed and borrowing
Most banks understand that the self-employed and freelancers take out a loan without an employer. It is possible and in accordance with the self-image of many self-employed people to consider them as their own employers, especially since they certainly generate an income. Most online banks reject self-employed persons as borrowers without further examination due to the possibly unstable income, while regional Volksbanks as well as savings banks and large private banks also grant them loans for personal purposes.
Borrowing with low own income
While the difficulty of borrowing for the self-employed and freelancers is to choose a bank that accepts them as a borrower, the unemployed rarely get a bank loan. It is understandable that banks refuse a loan without an employer and without an independent earned income. You can and can only grant loans if the customer can repay the borrowed money, but the benefits of unemployment benefit II are just sufficient for life.
Some unemployed take advantage of the accelerated processing of small loans and choose a loan without proof of salary. However, they only receive this if they intentionally provide incorrect information on their income, because even with a loan without proof of salary, the lender must ask about the amount of available income. Incorrect income information in the loan application has criminal penalties if the borrower does not properly repay the stolen loan later. If urgently needed purchases are made, the unemployed should contact the job center, since the clerk can agree to interest-free lending.
The low monthly installments are offset against the later payments of unemployment benefits. Ideally, married couples apply for a loan together. If the non-working partner wishes to take out a loan without an employer, the portion of the family income attributable to him should be sufficient as security for the loan. Banks usually do not share this view, so the signature of the earning spouse is usually required.
Alternatively, loans from private individuals can be taken out via websites for arranging private loans. The members registered there as lenders base their lending decisions primarily on social criteria and approve loans to people who are difficult to obtain loans from traditional financial institutions, provided that the loan seeker clearly describes the intended use.
Pay attention to low credit rates
Those who take out a loan without an employer usually have low or, as a self-employed person, a possibly fluctuating income. In order for the loan repayment to take place as agreed, low credit rates are important, which arise with long loan terms. It goes without saying that the loan must be as cheap as possible and the borrower makes a careful loan comparison without an employer.