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Bank Credit: What is a bank loan? The pros and cons

A bank loan is nothing more than a loan given out by a bank or savings bank. A comprehensive agreement will be drawn up to settle the bank loan. This contains primarily the dates and facts about the repayment agreement. In monthly installments, the borrower repays the borrowed debt at the respective bank. He not only reduces the amount of money received. The leasing of capital also obliges the borrower to pay high interest.

What is a bank loan?

What is a bank loan?

Important: Before the bank loan is confirmed, a detailed creditworthiness check is always carried out. In this context, the bank checks whether the applicant has the required credit rating (Credit Scorer).

For whom is a bank loan suitable?

For whom is a bank loan suitable?

In principle, every adult has the opportunity to apply for a bank loan, whether as an entrepreneur or as a private person for a specific project – such as the purchase of a condominium, a house or a car. Based on the example listings, it becomes clear that a bank loan is mainly suitable for people who need a correspondingly high sum of money for a large investment.

However, not everyone has the same chance of getting a loan from the bank. Essential prerequisites for a commitment are common

– a solid job, 
– a more or less high income (depending on the desired loan amount), 
– Collateral for the bank (land, vehicle, other valuables) and 
– a perfect credit rating.

Not to forget that age also plays a role. Age of majority is essential. Older people are disadvantaged in many banks, even if they have a good income. Some institutes have an age limit of 60 or 70 years, for example.

Note: Several lenders require the borrower to take out a life insurance policy that serves the bank as collateral. Say: The borrower pays monthly in addition to the repayment installment and the agreed premium for his life insurance. However, he will only be entitled to the steadily growing sum of this insurance after the loan has been fully repaid by the bank. Until then, the bank reserves the right to collect the contributions should the borrower fail to meet his or her obligation to repay the loan.

How does a loan from the bank work?

How does a loan from the bank work?

To apply for a bank loan, the interested party contacts the bank of his choice. This does not necessarily have to be his “house bank”. Most institutions now offer the option to request the loan online. The formalities are clarified via live video conference. Alternatively, the applicant goes straight to the bank and addresses an employee there.

After the detailed discussion between the bank employee and the customer, the application is completed. Depending on the bank, the approval (or rejection) takes place immediately. In some cases, however, it takes a few days before the applicant learns whether the loan request is fulfilled or not.

In the case of the pledge, the borrower receives the agreed amount transferred to his bank account. From now on he has to keep to the monthly repayment of the fixed rates. Otherwise there are high reminder fees or even worse consequences (in case of repeated failure to pay). The accrued interest is usually charged every quarter and collected directly from the credit account.

Advantages and disadvantages of a bank loan

Advantages and disadvantages of a bank loan

The biggest advantage of a classic bank loan is the (theoretical) possibility to raise a very high sum of money if the conditions are right . In addition, the period of repayment can be extended relatively far, which is very significant for most people, especially from a six-figure loan amount.

But: With a high loan amount and long repayment period, there is also a decisive disadvantage: the interest rates are extremely high, so that the final repayment amount clearly exceeds the borrowed amount. In addition, the borrower usually liaises with the bank for many years and must always ensure that the installments are paid on time.

Note: If the borrower is unable to meet the payment deadlines in a given time or situation (such as sudden unemployment), he has the option to apply for a temporary deferral. However, he has to accept new fees again.

The most striking disadvantage of a bank loan is undoubtedly the fact that almost exclusively people with immaculate credit standing get a commitment. All other people who desperately need money for an important project have minimal chances of getting a bank loan. For you (and everyone else) there is a very good alternative: Secured Bank.

Alternative to bank loan: Benefits of a loan through Secured Bank

Secured Bank acts as a short-term credit provider. You can apply for a loan in just a few minutes via the website of the Berlin-based company. If you meet the fair conditions, the loan will be approved and paid out the same day.

Important: A successful request is also possible for persons with medium credit rating!

Four good reasons for your credit with Secured Bank

Four good reasons for your credit with Secured Bank

a) Free loan calculator: The clear and easy-to-use loan calculator tells you in two clicks how high the repayment amount will be. Simply enter your desired loan amount and the preferred term (maximum of 30 days for first inquiries, later up to six months). The resulting total amount is already displayed.

b) Credit-Neutral Credit Inquiries: Unlike bank applications, credit inquiries at Secured Bank are Credit Scorer-neutral – meaning they have no negative impact on your Credit Scorer score.

c) Reliable instant payment: Secured Bank will check your details immediately after your request. If it turns out that you have all the requirements, you will receive the requested loan a short time later transferred to your account. Often the matter is already done after an hour.

d) Short Binding: The combination of a relatively small loan amount and a short term does not tie you in for a long time. You are faster independent again, which has a positive effect on your credit rating.

Here are the convincing advantages of Secured Bank:

+ Useful loan calculator to calculate the repayment amount 
+ Loan requests do not affect the Credit Scorer score 
+ Instant loan with fast payout on the same day 
+ fast repayment for a short bond and good credit

Special: At Secured Bank no indication of the intended use is required!

Cheaper than a bank loan: Fast loan from Secured Bank

Unlike a traditional bank, Secured Bank does not charge commission or processing fees. In addition, the interest rates for a loan through the portal are extremely low, which is mainly due to the short term.

Example calculation: For a loan amount of EUR 500 and a repayment period of 30 days you pay a total of EUR 505.80. That means the interest rates are just EUR 5.80.

Easier than a bank loan: This is how an instant loan works

While a classic bank loan is associated with heaps of bureaucratic individual stages , the instant loan via Secured Bank is astonishingly straightforward. The simple application process consists of the following three steps:

1. Select loan amount:

Select the desired loan amount. For this purpose, simply make use of the loan calculator and then click on the “Apply Now” button. You will then be redirected to the online form.

2. Make a loan application:

Complete the form completely. In doing so, you provide general data about yourself (name, address, date of birth, marital status, salary, etc.) and upload various documents that serve to identify you and establish your credit rating.

Here is an overview of the documents that you need when applying:

– ID card (identity card or passport) 
– Salary statement for the last three months

3. Start verification:

With VideoIdent Secured Bank checks your identity – without the hassle of paperwork. The signing of the contract is also easy in this way. All you need is a Skype account and a webcam.

In the case of a grant, the requested loan will be transferred immediately to your current account (in the express version). As a rule, you will then have the requested amount on the same day.

Requirements for borrowing from Secured Bank

For a successful loan application with Secured Bank, you must meet the following requirements:

– of age (at least 18 years) 
– Residence in Germany 
– German bank account 
– regular income (at least 500 Euro) 
– sufficient creditworthiness (at least “medium”) *

* As far as the Credit Scorer score is concerned, rating levels A to I are eligible.

In principle, Secured Bank also has the option of receiving a short-term loan for special groups such as the self-employed, retired and unemployed (category I). The company will treat each applicant the same and will take the same exams. If, in addition to fulfilling the other requirements, at least a medium Credit Scorer score is given, there is nothing against a loan approval.

Table: Comparison of the requirements for a bank loan and a quick loan via Secured Bank:

requirements bank loan Short term credit from Secured Bank
Older at least 18, max. 60-70 (depending on the bank) at least 18
Income: depending on the loan amount (usually> EUR 1.000) at least EUR 500
credit: very good to good (Rating A to C) very good to medium (A to I)

Credit without?

Credit without?

Sometimes you might come across an ad from a loan without Credit Scorer. Offers advertised in this way are misleading, as they seem to imply that the application does not conduct a credit check. However, this is not the case with reputable institutions – they always check the creditworthiness, for the safety of both parties.

A loan without Credit Scorer therefore means that the request has no influence on the Credit Scorer score – as is the case with Secured Bank. The better description of what “credit without Credit Scorer” means is, therefore: Credit Scorer-neutral credit.

Conclusion

If you need short term money to bridge a financial bottleneck or pay a specific bill on time, make the right choice with an instant loan from Secured Bank. The provider works reputable, fast and reliable, so you receive the feedback and possibly also the payment on the day of your request. A bank loan is recommended due to the many disadvantages nowadays only for very large investments.





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