Schufa-free
If you want to take out a loan, you may ask whether it should be Schufa-free or not. A loan that is Schufa-free offers certain advantages compared to conventional loans. Which these are and where you can apply for a Schufa-free loan are explained here.
Nowadays there is a wide variety of loans on the financial market that can be taken out short-term, medium-term or long-term. Whether you want to finance a property, a television or a new car — there is a suitable loan for every purpose.
However, if you are unable to pay the instalments for an already taken-out loan due to an unfortunate circumstance, SCHUFA receives a notification that there was a default on a loan repayment.
Can you get a Schufa-free loan?
Yes, you can get a Schufa-free loan. In this case, a credit check is carried out based on different criteria. Schufa-free means that the company refrains from requesting information from SCHUFA and instead relies on other data.
To obtain a Schufa-free loan, the borrower must have a sufficient income that they have been receiving for at least six months. In addition, the job should, if possible, be permanent so that a longer repayment period is ensured.
How does the lender secure itself for a Schufa-free loan?
Even a loan granted Schufa-free must be secured. The interest rate is assessed according to how high the income is. The lower the income, the higher the interest rates charged for the loan. The request as to whether a loan can be granted Schufa-free is made online with one of the lending companies. You quickly receive an answer as to whether the loan has been approved or not.
Afterwards you send the two most recent pay slips and the signed loan offer back by the PostIdent procedure. This provides the lending company with proof that it is indeed the borrower’s personal signature. If everything has been checked and rated positively, nothing stands in the way of disbursing the Schufa-free loan. Repayment of a loan granted Schufa-free is also made through monthly instalments which are debited from the account.
What is the SCHUFA institution?
The Schutzgemeinschaft für allgemeine Kreditsicherung stores all data that is in any way related to a person's financial life. The aim of this protection association is to protect contracting parties — on the one hand the lending company from credit defaults, and on the other hand the borrower from over-indebtedness.
Various data are stored. Of course, in addition to the name, birth name and place of birth, the address and previous addresses are also registered. Then come the actual pieces of information that are important if a new account is opened or a loan agreement is signed. This concerns all credit cards that the person holds, telephone connections, loans, installment purchases from mail-order companies or customer accounts. If there are no problems with payment behaviour, the score value is flawless.
The so-called score value is a rating that indicates how likely it is that the debtor will repay all loans on time and in full. If there are deviations, this score value changes negatively and the granting of loans becomes very difficult, if not impossible. Deviations can be claims that are being dunned or that have to be enforced by court decision.
An affidavit (eidesstattliche Versicherung), an arrest warrant due to unpaid claims or insolvency proceedings also have a negative effect. This is then recorded as a negative entry at SCHUFA. If a business partner requests information from SCHUFA, they are informed that the borrower is in certain financial difficulties and that a new commitment could result in a loan default.
SCHUFA's business partners include A-, B- and F-partners. The first group includes credit card companies, credit institutions or leasing companies. The second group includes, for example, mail-order retailers, e-commerce or companies that grant deliveries or services on credit. The last group consists of collection agencies that receive address data of those people who agreed to the SCHUFA clause when concluding a contract.
You can request information about your own scoring values from SCHUFA at any time. You can do this by post or online. Negative data are deleted no later than three years after the claim has been settled and are then no longer visible.