Financial possibilities are severely limited
A loan without Credit bureau for Social Welfare recipients is possible via private loans, but in no case via banks, unless an additional guarantee is given to the bank. The guarantor himself must be willing to accept this guarantee, and he must also have a regular income of at least an average amount.
Employment as an official is also advantageous due to the increased protection against dismissal, but not mandatory for a guarantor. The Social Welfare recipient cannot get a loan without a co-applicant and / or guarantor, because his income and creditworthiness are simply too low. The fact that the Credit bureau is not checked is still to be viewed as negative, even if no rejection would occur due to a negative Credit bureau rating.
Both the bank and the borrower must always view the loan from a moral point of view. As a Social Welfare recipient, the financial possibilities are severely limited, which is why a loan without Credit bureau for Social Welfare recipients is always associated with a risk of impending over-indebtedness.
Even very low installments cannot be paid on time if there is insufficient financial buffer in your own household. The likelihood of over-indebtedness is therefore high, even if the installments would have to be borne by the guarantor in the short term.
More flexibility with a personal loan
The personal loan is so advisable for a loan without Credit bureau for Social Welfare recipients, since it is much more flexible and usually even cheaper. This is simply because private lenders usually have a good relationship with the borrower, otherwise the loan would not even be issued. Thanks to the good relationship, a flexible plan tailored to the possibilities of the Social Welfare recipient can be created, which ensures the repayment of micro and small loans.
The loan without Credit bureau for Social Welfare recipients is usually not too high, which is due to the fact that the lenders deduct the loan amount from their private income or their own savings. Of course, unemployed borrowers only want to borrow as much as they actually need.
For many people, taking out the loan without Credit bureau for Social Welfare recipients in a private environment may involve mastering a moral hurdle. Because borrowing in the closest private environment is always associated with shame, even if the selected lenders come from the family and you are therefore happy to help out of a financial emergency. For this reason, the interest burden is often completely eliminated.