When credit scoring, each bank weights the criteria differently

The introduction of the new equity guidelines, colloquially also called Basel II, after the place where they were created, has brought about significant changes in the banking business. In the area of ​​loans in particular, banks must now take a better and closer look at the risks associated with lending. The reason for this is that the amount of the capital requirement for a loan largely depends on this risk. The more risky the loan, the more equity the bank has to put up for this because the likelihood that the customer will become insolvent during the term of the loan and therefore default on the loan is relatively high. The banks use so-called scorings for the risk classification in both the private and business customer segments. Here, a total point value is determined for each customer from different factors, which is between one and six. The lower this value, the better, because the better the credit rating, i.e. the creditworthiness of the customer.

Credit score

Credit score

The scoring itself consists of different key figures, the weighting of which differs from bank to bank. The scorings are not uniform for every institution, rather each bank has determined a scoring system for itself, which often even the advisors of the banks cannot see through. However, it is the same for every scoring that the consultants need data such as job, length of employment, residence status, place of residence and marital status. This data is usually entered directly into a computer program during the credit interview, which then determines the score.

How to get a quick loan

How to get a quick loan

With this, the banks are aiming for a quick loan, because if the credit rating is sufficient for the loan and the customer wishes it to be concluded, the loan contracts can be printed out and signed straight away. In addition to the bank’s internal scoring, Credit Bureau’s data is also used. This itself determines a score value, which is made up, among other things, of the number of loans granted to date and the repayment. Banks generally adopt this score one-to-one. The scoring not only has an impact on the lending itself, but the banks also use it to determine lending rates. The higher the score, the higher the customer has to pay, because the risk for the bank is higher.

However, the interest surcharge the bank charges varies individually. If a scoring is created in the business customer area, in addition to the personal data of the customer, data of his branch are also received. For this purpose, the banks mostly use external ratings, which are included in the scoring. Conclusion: Due to the very different scorings of the banks, it is possible that the calculated interest premiums also differ. Furthermore, the same customer can receive a rejection of his credit request at one bank, and the loan is approved at another bank. Therefore, customers should always obtain several offers in order to be able to compare.

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Terms and conditions for a loan from the bank

 

In today’s world, loans are still a popular option for many Germans to temporarily expand their financial scope. It is basically irrelevant whether this is for the purchase of a luxury item or for the realization of your own four walls. The basic idea behind a loan is the same in every case. The lender, in this case a credit institution, lends its own capital to the borrower. The lender can get the temporary waiver of his own capital in the form of interest. The amount of this loan interest is based on the creditworthiness of the customer, the term of the loan and, last but not least, the amount of the loan taken out. The repayment of the loan is usually guaranteed by monthly repayment installments to be paid by the customer. In the loan agreement, the latter undertakes to settle the entire loan debt in previously negotiated installments.

Make a loan comparison before taking out a loan

Make a loan comparison before taking out a loan

The amount of these rates varies depending on the amount of the loan interest and the chosen term. In general, it can be said that the shorter the loan term, the lower the interest charge, but the higher the monthly loan installments. A healthy average should be chosen here so that the borrower does not experience financial constraints when repaying the loan, which can have a negative long-term effect on his further creditworthiness. To take out a loan, the loan seeker contacts a credit institution of their choice. It makes sense to choose this according to the most favorable conditions. A loan comparison before taking out a loan makes sense in any case and can help to save money. The differences between the individual credit companies can be serious in some cases.

Important criteria to be check

Important criteria to be check

In a personal conversation with the lender, the borrower stores his personal data and, ideally, proof of regular incoming payments. These are one of the most important criteria for successful lending and play a major role in the credit check. This also includes a query from Credit Bureau, which serves the security of the lender. Here, for example, open or recently repaid loans and other payment obligations from purchase transactions are listed. If the credit check is positive for the customer, there is usually nothing standing in the way of lending. All important conditions are now recorded in a loan agreement. The customer will receive the corresponding loan amount credited to his checking account within a few days of the conclusion of the contract.

In individual cases, the money can also be given in cash. From this point in time, the borrower undertakes to pay the monthly repayment installments until the loan has been paid in full. In the event of temporary payment difficulties, which may arise from unexpected unemployment, for example, it is advisable to contact the relevant credit institution as early as possible so that a solution that is satisfactory for both sides can be found. For example, the lender can waive payment of the due loan installments for a certain period of time until the borrower’s financial situation has relaxed again.

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