The desire for a loan from abroad is often due to a difficult credit situation. He is wanted above all by entrepreneurs and people whose creditworthiness has suffered. For these groups, foreign loans were, until a few years ago, the only chance of a loan. The market has changed and offers more credit options today, despite the low credit rating.
Credit from abroad – that’s the way it works
The foreign credit usually comes from Switzerland. Therefore, foreign loans are often referred to as “Swiss credit”. In times of the Internet, applying for them directly from a foreign bank would be conceivable, but in practice it is not so easy. One of the requirements of almost every bank is that the borrower has his domicile and income in Germany. Otherwise, the necessary credit check procedure would be too complicated.
The credit broker replaces a local bank. He carries out a credit check in accordance with the requirements of the foreign bank. As a resident, he has unrestricted insight and does not need to resort to administrative assistance procedures or the like. The processed application will be submitted to the foreign bank. If the applicant’s data correspond to foreign lending regulations, the loan will be approved. Only through the loan approval, the agent has fulfilled his task and gets his commission.
The euro crisis has changed a lot on the capital markets. Affected is also the credit from abroad. Some effects will only gradually be felt. The implementation of the specifications will be gradual. The decisions of Basel, better known as Basel Agreements I – IV, are intended to significantly restrict, inter alia, risk loans. One of the steps to do so is a significantly higher equity of banks providing risk loans. It will therefore become increasingly unattractive to conclude risky lending transactions.
In addition, the lending criteria are to be gradually adjusted. The ultimate goal is a homogeneous credit market. Different interest rates can still be used, but lending will increasingly exclude risk groups. There remains the alternative personal loan.
Shifting the risk to private shoulders
Attractive made the loan from abroad the possibility to remain creditworthy if the creditworthiness was lower. Somewhat higher interest rates and the fees of the credit intermediaries were especially welcome for self-employed. Their investment was calculated so that the risk premiums were included.
The demand for foreign loans in “old form” is unbroken. Self-employed depend on the financial viability of their investments. Anyone who has ever forgotten a mail-order account, was “punished” with a Schufa entry, who still wants to get credit.
Two large platforms for personal loans are increasingly taking over financing under worse auspices. Foreign credit is becoming less important in the context of international alignment.