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Expensive personal loans as a savior in an emergency: Better look for other help!

Expensive personal loans as a savior in an emergency: Better look for other help!

Thanks to the corona pandemic, more Swiss than ever are dependent on additional financial help. A big problem could be taxes that are not affordable, especially since tax debts are the most common debt in Switzerland. Only then do debts follow through bills or unpaid health insurance contributions. Many Swiss are looking for their salvation in a personal loan that is supposed to help them out of financial misery. But most of the time it just makes things worse.

Personal loan leads into the debt trap

The calculation is simple: the current income is not enough to pay rent, bills, health insurance premiums and then also the taxes. A small loan should be the salvation and first of all allows the payment of all outstanding liabilities. But the regular income is no longer and the previous liabilities usually arise again. After all, these are mostly payments that have to be made continuously at certain intervals. In addition, there are now the repayment installments for the personal loan, which can sometimes start with a repayment-free period, but the interest payments are still due during this period. The result: The person concerned goes into debt even more and gets deeper and deeper into the debt trap, from which he can often no longer free himself. Debt counseling often only leads to the conclusion that personal bankruptcy is inevitable.

Look for alternatives to personal loans

Before going to the bank or credit broker, alternatives should first be considered. One possibility is to arrange a deferral of the payment with the payment partner. The payment term can possibly be pushed back so that the liabilities can be processed according to their prioritization. This also applies to the tax office, which can receive a justified request for payment in installments. If there are already debts, it is possible that the tax office will not approve a deferral. It is therefore important to act in good time and to submit a corresponding application as soon as the first impending debt arises.

Mail order companies or local sellers should also be asked to postpone payments. Often a payment-free period can be agreed or a supplier credit is taken out. Interest may then have to be paid on the invoice amount, but this is usually lower than interest at the bank when a personal loan has to be taken out.

Foundations also help in some cases. One example is Educa Swiss, a foundation that helps students in need. It grants loans to students, whereby particularly favorable conditions can be agreed. Crowddonating platforms may also come into question, although these will hardly be the right place to go if it's just a matter of paying a few bills. However, if your own education or that of your children is at stake, if your studies can no longer be financed, or if you are threatened with being kicked out of your home, such foundations can be your last resort.

Conclusion: choose personal loans only as an emergency solution

Those who get into financial hardship usually only have to bridge a certain period of scarcity. In addition, it is rarely about large sums, usually only a few hundred to thousand francs are needed to pay current bills, tax debts or health insurance premiums. A personal loan is then the worst possible solution, because it usually ensures the accumulation of an even larger mountain of debt. The bad conditions that are given on small amounts are to blame. The interest rates are high and cannot be compared with the interest rates that are common on a home loan, for example. In the end, the debtor is faced with a mountain of debts and needs a new solution, which often enough is personal bankruptcy. If you want to avoid this, you should definitely seek deferrals, deferred payments and possible subsidies from third parties.

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Only a few neutral comparison portals on the market

Only a few neutral comparison portals on the market

The Swiss comparison sites on the Internet are happy to use them to find out about loan conditions. But the number of neutral comparison providers is dwindling and has now shrunk to a few well-known ones. The supposedly transparent comparisons are no longer as transparent as they should be.

Landing pages with empty promises

Programming landing pages has its justification in terms of search engine optimization. People who search for a term, product or service on Google and Co. are taken to a provider via this page. But it is not uncommon for these landing pages to lure with empty promises and deliver significantly less than they actually say. Sham comparisons are nothing new, especially when it comes to personal loans. These come from companies that have been specially commissioned, or from brokers and credit providers themselves. They only have the goal of selling their own product well and therefore advertise it as the winner in the alleged comparison. Often it is also search engine specialists who look after hundreds of pages on the Internet and provide suitable content to ensure that their customers are found. Nothing is neutral here anymore! Comparisons relating to loans, telephone contracts and health insurance are often affected because they are about a lot of money for the customer. It is understandable that people want to secure themselves and have a comparison made, because comparing all the little things yourself would take a lot of effort. The alleged comparisons then lure the Swiss to the pages where they can find nothing more than made up or embellished comparisons. It is not uncommon for the links under which an inquiry is supposedly possible to lead not to the providers themselves, but to brokers who earn money by selling the products in the sales pitch. Often not even the products that the prospective customer has asked for, but in the conversation they recommend completely different ones that are significantly more expensive or less favorable for the customer because of the conditions.

Own comparisons are shown

Telephone providers and insurance companies, as well as banks and lenders, often offer comparisons that they themselves suggest are the best choices. Then other providers are portrayed as worse, and it is not untruths that are claimed. Rather, the weighting of individual criteria is different, so that a different ranking must result naturally. If some providers for personal loans then fall out of the shortlist, the searchers will also later remember that the provider? Was not good in the previous comparison ?. If you try again, this provider will no longer be shortlisted, although its offer doesn't have to be really bad.
Today, many comparison portals no longer receive optimal results from customers; products or services that are far too expensive are suggested. There are now only a few comparison portals that are really neutral, including neotralo. Here at neotralo, those searching can rely on the fact that there is no broker lurking at the other end who is only interested in the commission and does not always act in the interests of the customer. In the case of neutral providers, the comparison result is not falsified by the fact that a provider pays for its better placement. Rather, the optimal results are displayed for each comparison.

Conclusion: Only a few neutral comparison portals on the net

Many people rely on comparison portals before they take out a personal loan or even think about taking it out. It's just stupid if these comparison portals don't work properly and offer bogus offers via landing pages or suggest the lenders who pay the most for good presentations. Customers should be able to rely on the fact that they only get neutral comparison results and that they actually end up where they wanted to go when they receive a request and that they do not find themselves forwarded to brokers. Neotralo is one of these neutral comparison portals on the Internet and will continue to be a reliable partner when it comes to credit comparisons.

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Consumption is growing despite the corona crisis

Consumption is growing despite the corona crisis

Meanwhile, one in five Swiss believes that their situation will worsen economically in the coming months, which is a significant increase compared to the survey values from previous years. Nevertheless, consumer spending seems to have returned and the Swiss are again investing more money in various goods.

There is a new desire to consume

Even though more Swiss people than ever believe that their economic situation will deteriorate rather than improve in the coming year, consumer spending continues to rise. However, only about one in four Swiss believes that the financial situation will improve in the coming year, compared to a third in 2020. 18 percent even assume that the financial situation will get worse or significantly worse, which more people are than in the past four years.

Despite all the concerns, the propensity to consume seems to have returned, which experts would hardly have thought possible in view of the high corona numbers and the financial outlook. In the spring of last year many people still wanted? almost half ? refrain from making a major purchase. New furniture and vehicles were not bought. The share fell to 36 percent by the end of the year, many were tired of the savings and now approached such investments with the view that they could not go on vacation. Then why not treat yourself to something at least at home?
So at the beginning of the crisis, people wanted to consume less and focus more on saving. Many people now even state that their consumer behavior will not change, even if Corona would continue for a while. Around two percent of those questioned in the study even want to take out a loan, whereas last spring this figure had shrunk to one percent.

Drop in sales and problems at work

When asked about the reasons for the expected worsening financial situation, most Swiss responded that they were worried about their jobs. Some were already having problems in the workplace and it was to be expected that savings by companies would lead to layoffs. Many people were already on short-time work and accordingly earned less money, others had already lost their jobs or their partner was affected by unemployment. The self-employed had to struggle with a drop in sales and were therefore less able to pay attention to consumption, but were forced to save.

The values were significantly different at the end of 2019, because at that time only a small proportion of less than 15 percent stated that savings were due to problems at the workplace. Others referred to rising health insurance premiums, but a certain lack of prospects was not noticeable at the time. It will be different in 2021, because the ongoing Corona crisis has Switzerland and the world under control and ensures that hardly anyone knows what will happen next. Nobody knows whether the financial bottleneck will be surmountable in the near future or whether it cannot get much worse because the numbers are not falling permanently. Until the success of the corona vaccination is clear and the world can return to normal, consumption will therefore certainly remain limited.

Conclusion: increasing consumer confidence vs. fear of the future

The Swiss are currently divided and, on the one hand, are clearly more willing to consume than last year. On the other hand, however, they have to accept savings, save themselves and do without, because they are forced to do so by short-time working or job loss, for example. Experts assume that debt could rise significantly, because people want to do something good for themselves through purchases that they cannot achieve otherwise. The only thing left here is to hope that the pandemic will end soon.

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The creditworthiness as a decisive criterion when granting loans

The creditworthiness as a decisive criterion when granting loans

If you are planning a purchase and cannot raise the necessary equity, you need a personal loan. But whether this is granted or not depends primarily on the creditworthiness. The credit check is the obstacle that should not be underestimated and that must be skipped on the way to the credit approval.

Correctly assess the creditworthiness of the applicant

For banks, the credit check of the applicant for a loan is part of their own risk management. Because: Only if you look closely can you see whether an investment is worthwhile or not! As is the case with companies, this statement also applies to banks and other lenders. They look at the creditworthiness of the applicant and then assess whether they want to take the risk of borrowing or not. Especially since it is not only about having to accept a small risk of losing the money, it is also important to ensure a good balance sheet with few loan defaults. At least that's how the owners of the banks see it. Customers are assigned a score that provides information about their creditworthiness.

The creditworthiness states how creditworthy a person is. Does she have enough income to cover normal expenses? Is there anything left over from the income to pay off the repayment installments for a loan after deducting all expenses? What about payment behavior: does the applicant always wait for reminders or does he meet his payment obligations on time? Is the income regulated, is the employment contract open-ended? Or is it a self-employed person who only makes an irregular profit or no profit at all with his perhaps still young company? These and other questions are set up and answered by a credit agency in order to then determine a credit rating. This score should be as high as possible, because all doors at a bank are open to the person concerned and the way to the loan is free.

ZEK is relevant for the credit rating

So-called Schufa-free loans are often offered in Switzerland, with Schufa being the credit agency that is relevant for Germans. For the Swiss, on the other hand, it is the ZEK, the central office for credit information, which nonetheless develops a score. It does not reveal exactly how this credit rating is calculated and what needs to be done to improve a score or to keep a good score at all. In general, it is the usual points such as punctual payment of bills, avoidance of debt collection procedures, regular payment of loans, etc. that have a positive effect on a score.

The data recorded and stored at ZEK are known, including open credit inquiries. It is therefore advisable that a person who wants a loan does not submit a loan application to several banks. The background: If a person has to write to so many banks, they will probably not be offered a loan. Ergo, the credit rating is to be classified as worse. This conclusion does not have to correspond to reality, but it is drawn in this form. If you want to inquire at several banks, you should therefore rather rely on a condition request and not a loan request! This is not saved. However, those inquiries for which the offer is no longer valid are also deleted by the ZEK, they do not remain here forever and therefore cannot have a permanent effect on the creditworthiness.
Blocked bank cards have a very negative effect, regardless of the reason why they were blocked. It is therefore important, in the interests of good creditworthiness and a positive credit decision, not to have bank cards blocked.

Conclusion: the credit rating as an obstacle to lending

When it comes to granting a loan, the most important thing is the credit rating. An applicant should therefore pay attention to his creditworthiness and possibly obtain information in advance from the ZEK. In general, consumers should make sure that they show good payment behavior, because only then is it possible to make a positive credit decision.

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Buying a car with credit: which option is best?

Buying a car with credit: which option is best?

If you want to buy a car, you have to expect high costs, because this necessary vehicle means a comprehensive investment in a valuable item. If you do not have the necessary equity, you have to take out a loan, with the option of subscribing to a car.

Private leasing business is on the rise

The private car leasing market is clearly gaining ground in Switzerland, so that Swissquote, as an online bank, has now decided to enter the leasing business. For this purpose, cooperation with Tesla should take place.
Consumer leasing has already increased extremely in 2019, as the Swiss Leasing Association reports, but in the Corona year 2020 demand fell a little. The loan amount that had to be raised on average for leasing vehicles in 2019 was around 34,500 francs, whereby it only concerned new vehicles. Around 30 to 75 percent of the new cars registered in Switzerland are financed by leasing today.

Cash purchase as the best option

It's clear: if you buy a car in cash and don't have to take out a loan, you don't need to worry about interest rates and loan terms. There are no higher fees due to the interest, so the cash purchase is of course the best choice. The advantages of cash purchase, for example, a cheaper vehicle offer, can also be combined with taking out a loan. The loan is taken out at a bank, and the vehicle can be paid for in cash at the dealership.
According to experts, the discount that the cash payer receives is only worthwhile if the vehicle has been owned for at least six years, otherwise the depreciation of a new car will make up for the savings made by paying in cash. From a financial point of view, a vehicle should never be sold after two to three years, as the loss would be too great.

Is subscription a better choice?

If you don't want to buy your own car, you can also subscribe to one. This is made possible by the various subscription providers who maintain fleets of vehicles of different sizes depending on the location. The contracts are usually accompanied by a short notice period, only the costs for fuel or electricity have to be paid. There are no other costs per vehicle, they are all included in the subscription price. Between 300 and 2,000 francs are charged per month, depending on the vehicle and subscription provider.
The subscription is especially useful for those drivers who only want a car for a limited time? the notice periods are usually only one month? or who always want to try out a different vehicle.

At first glance, the average leasing rates of 208 francs may seem cheaper, but with a longer holding period, it is the interest that makes the difference here. In the end, it is actually around 600 francs per month that must be included in the leasing, while it is only around 570 francs per year for subscriptions. However, the comparison cannot simply be applied to the whole of Switzerland, because some fees such as road traffic tax or administrative costs vary depending on the canton.

Conclusion: expensive personal loans and better alternatives

Buying a car with a personal loan turns out to be the most expensive option because the interest rate is usually at least four percent. This only applies to a debtor with a good credit rating. Anyone who has a poorer credit rating and consequently has to accept less favorable credit conditions will be significantly above this interest rate.
In summary, it can be said that the personal loan is the most expensive option and the cash purchase is the cheapest for getting a new car. If you don't want to commit yourself to the vehicle in the long term, you should also consider a subscription. Given that it can be canceled on a monthly basis, this offers the greatest cost savings because all fees that would be incurred for maintaining the vehicle are included in the subscription fee and are therefore calculated at a flat rate.

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Offset: the biggest mistakes in the credit calculation

Offset: the biggest mistakes in the credit calculation

Time and again, mistakes are made with a personal loan. In particular, the calculation of the interest rates often turns out to be incorrect. This can be disastrous as expensive for the borrower.

A brief introduction to common mistakes when calculating loans

May we introduce? Here are the most common mistakes made when calculating personal loan costs:

    • Confused Interest Rates
      Surely borrowers or those who want to become one have heard of it. We are talking about effective and nominal interest rates, which are often confused with one another. The loans in Switzerland are calculated using the effective annual interest rate, which is the most important cost indicator. The monthly payments and the total loan costs are derived from this interest rate. If you compare the interest rates shown on loans, you will find that it is not the nominal interest rate.
    • Go for low interest rates
      Anyone interested in a personal loan may have heard of a minimum and a maximum annual interest rate. An interest margin is usually given here, which is between three and eight percent, for example. The prospective borrower is already happy because the interest rates currently appear to be very low, and is then bitterly disappointed. 8.5 percent should be paid as interest? Behind this is a deliberate tactic by the banks who want to attract customers with apparently low interest rates. However, the interest rates are indicative and therefore not binding. Only those with the best credit get the low interest rate, everyone else can dig deeper into their pockets. Only the final loan offer, on which the actual loan costs are shown, is decisive. Minimum interest rates are therefore not suitable for a loan comparison.
    • Forget the runtime effect
      The longer a personal loan runs, the higher the costs, because the longer the term, the higher the interest. This is often underestimated by borrowers. Even if this increases the monthly burden, it is always advisable to give priority to a short term for the loan. It is only important that the monthly burden does not become so great that other payments can no longer be made and there is a risk of debt.
    • Forget about early repayment
      Borrowers are gladly warned against exercising their right to early loan repayment. They are scared that the penalty interest will end up having to pay even more money to the bank. But they forget that they have to pay a lot of interest for a longer term. Therefore, only a more precise comparison helps: How much do I have to pay if I repay the loan now and how much money do I have to pay if I use the full term with the usual interest? Most of the time, the savings potential becomes apparent, which the banks prefer not to know about.

Conclusion: Loans check carefully

Many borrowers pay way too much money to the banks because they failed to do a personal loan price comparison before completing it. Or because they let themselves be blinded by the promised low interest rates and were actually charged with a much higher interest rate because their creditworthiness was assessed less well. In order to save money in the end, it only helps to carefully check all loan offers in all points, do the calculations and compare point by point!

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Cheap loans for foreigners: Switzerland offers personal loans with poor credit ratings

Cheap loans for foreigners: Switzerland offers personal loans with poor credit ratings

Switzerland has always had the reputation of having a special knack for finance. When it comes to credit, the Swiss banks are the number one point of contact if, for example, a German cannot get a loan in his home country due to a lack of creditworthiness.

Swiss credit as an alternative

If the creditworthiness is classified as weak, the banks sometimes refuse a loan. The applicant also receives a negative entry in the credit agency, so that further loan applications are only associated with problems and are usually rejected. The solution is often sought in a loan in Switzerland.

So-called Schufa-free loans are available here, for which other proof of sufficient income must be provided. The reason for this path: The Swiss are not interested in the German Schufa and apply different standards to the assessment of an applicant's solvency.

However, applicants from abroad have to provide some evidence, because? Into the blue? no Swiss bank will grant a loan either. She also wants to make sure she gets her money back and will ask about income accordingly. It is therefore important to have a regular income, which, depending on the loan amount, must be proven for at least three months. In some cases, proof of permanent employment is required, because what good is an income receipt if the income is lost in the coming months?

The creditworthiness would not be given and a loan default is to be expected. In order to provide additional security, the bank will have the right of attachment granted. This means that the borrower must agree that in the event of insolvency, the income may be attached.

Not always good conditions for foreign borrowers

Anyone who takes out a loan in Switzerland due to a bad credit rating must expect that the conditions are not as good as those with a very good credit rating. This means that interest rates will usually be very high, which is almost no longer expected in times of persistently low interest rates. Nevertheless, it should be understandable that the banks also want to protect themselves against payment default and that the higher risk can be paid for in the form of higher interest rates.

At the same time, the loan amount is partially limited, but this also depends on the borrower's income and the securities offered. Sometimes the loan amounts are a few thousand euros, so that, for example, the purchase of a new car could not be financed with this loan.

Many borrowers complain that the term and rates of a Swiss loan are not negotiable and that these are fixed. But here, too, the bank's wish to protect itself against payment default is obvious.

Conclusion: Swiss credit for foreigners is not cheap

Anyone who opts for the Swiss loan because, for example, in Germany no loan for the desired financing is available, has to live with the fact that the conditions are not the best. The interest rates are high, terms and the amount of the installments is usually given.

It is important for Swiss banks and lenders to protect themselves against possible payment default, especially since they do not look into Schufa or similar credit agencies. Rather, the bank must rely on the information provided by the loan applicant as well as on his proof of income and security. It is understandable that this is accompanied by sometimes unfavorable conditions.

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Good resolutions for 2021: save or invest?

Good resolutions for 2021: save or invest?

They are set up every year at the turn of the year: the good resolutions. Not all are followed, but they are always similar. More fitness, more savings, more healthier lives. And maybe this year too: invest more?

The psychology of success

The psychologists have come up with their own name for the feeling of happiness that arises when a project is successful. Here comes the? Psychology of success? to carry. This refers to the feelings of happiness that arise when a good resolution or a firm plan is actually put into practice. Those who can also fulfill their plans strengthen their self-confidence and self-confidence. There is a feeling of elation, which should certainly not be unimportant at the moment.

Usually, however, there are hurdles in the way: there is a lack of time, money or energy. But at least the factor of missing change can be gotten out of the way if savings are made consistently. The time of saving does not have to be a time of deprivation, rather it is about saving in the right places and avoiding unnecessary expenses.

First get an overview

If you want to save or invest, you first have to know how much money is available. The following points are important:

    • Which ongoing expenses have to be taken into account?
    • What does insurance cost?
    • Are Loans To Be Repaid?
    • How good are the conditions for your own loan and for comparable loans?
    • How high are the monthly expenses for little things (books, concerts, souvenirs, etc.)?
    • What expenses do I have for birthdays and similar obligations?

Only if you know exactly how much money is needed per month can you see what is left to save. In most cases the income exceeds the expenses and yet at the end of the month the money is gone. The only thing that helps here is to keep a budget book to find the hidden expenses. Please also take into account the costs that arise not monthly, but quarterly or annually!

Possible expenses for savers

The mere intention to save is usually unsuccessful. Rather, a goal must be set. Maybe you want to visit a certain destination on vacation, buy a new car or repair the house is necessary. Perhaps a dental correction is also desired that is long overdue, but which the health insurance does not pay for. No matter what: It is only important that a specific goal is set and that savings are made for this.

How long you have to save is shown in the previous income-expenditure calculation. The entire amount that theoretically remains should never be used as a savings amount. Too quickly, special editions destroy both the savings and the motivation!

Frequent reasons to set aside money or even take out a loan are your own further training or renovating your home. Further training in particular can cost several thousand francs and, as a cost-saving measure, usually has to be planned and implemented for a long time. Often the measure itself has long been completed, but financial rehabilitation is still not tangible. The same applies here: Consistent saving is the order of the day! At the same time, investing in one's own education or in valuable goods creates the feeling of elation described above.

Conclusion: Saving and investing ensure happiness hormones

Nobody has to be addicted to shopping to know that investing makes for happiness hormones. The main thing is that the implementation of a good resolution is fulfilled. For example, anyone who undertakes something at the turn of the year, works consistently towards it and fulfills a wish, follows the? Psychology of success? and feels motivated to implement other good resolutions.

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Fulfilling Your Own Dreams: Good Reasons for a Personal Loan

Fulfilling Your Own Dreams: Good Reasons for a Personal Loan

Borrowing cannot always be avoided entirely: a new car has to be bought or a long-awaited wish has to be fulfilled. A personal loan that is offered by a competent credit broker can be the solution. These reasons speak in favor of taking out the loan.

1. Bridge financial bottlenecks

Usually it is financial bottlenecks that have to be bridged: an invoice that was not expected, high expenses for repairs or an absolutely necessary new purchase exceed the existing budget and ensure that a solution is required quickly. The loan then helps to overcome this bottleneck, but should itself come up with good terms.

Otherwise, there is a risk of over-indebtedness: the loan cannot be repaid and needs other financing. Therefore, the loan comparison is absolutely necessary before signing a loan agreement!

2. Financing your own training

Your own education or the education of your children costs a lot of money. The following applies: Investing in your own future brings the best interest and is therefore always a good idea. However, the same applies here: The loan must be repayable and should therefore only be taken out in the amount that is absolutely necessary.

However, it has the advantage that trainees and students can fully concentrate on learning and do not have to work on the side in order to get the money they need for training. This usually lengthens the training or studies unnecessarily and ultimately costs even more money.

3. Rescheduling of existing loans

Loans are taken out, the terms firmly agreed. But in view of falling interest rates, an offer from another bank may be significantly more lucrative. Then another loan can be taken out at this other bank, the existing loan is then redeemed with the money. Often there are fees that are known as prepayment fees.

In order to decide whether these will not ultimately exceed a possible saving, it is important to calculate the respective loan costs precisely beforehand.
It can also make sense to take out a personal loan as a forward loan. This is practically concluded in advance and starts on a certain date in the future. It can replace an existing loan and offer lower interest rates.

Obtaining personal loans through credit intermediaries

If the personal loan is taken out directly via a credit broker, that's your own credit scoring. Because: When loan applications are submitted, they automatically go through the ZEK. That in turn means, however, that rejections of such applications can also be found there.

Several such rejections worsen the credit scoring in the worst case to such an extent that an approved loan is no longer even possible. This means that rejections can also occur later, although the applicant's creditworthiness would actually be given. The credit broker first checks the applications very carefully so that entries at ZEK can be avoided.

In addition, it is usually easier to obtain a loan from a credit intermediary than from a bank. Only a few documents have to be filled out and submitted as evidence, often the last pay slip is enough. At a bank, this evidence goes much further and is much more comprehensive. Personal loans from credit intermediaries can usually be applied for online and the offers can be compared from the comfort of your own home.

Conclusion: Many good reasons for a personal loan

The personal loan is a good way of avoiding registration with the ZEK and can be applied for for many reasons. Usually it is a financial bottleneck that has to be bridged. Or it is about the training, which cannot be financed with the usual available means.

The personal loan usually has a lower loan amount than a normal bank loan and often comes up with lucrative interest rates. It is particularly easy to apply for if a credit broker is called in.

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Not a job, but a personal loan

Not a job, but a personal loan

The current times are difficult and not a few people are becoming unemployed. At the same time, many of them have a personal loan to run and are now wondering how they can continue to service it. There are the following options.

High credit and suddenly lost your job?

Even if it is not a real estate loan that creates debts, a personal loan of CHF 30,000 can also be a problem if suddenly unemployment occurs and the installments can no longer be paid.

Now it is important to act quickly, because talking to the bank or the lender is always the first step in solving the problem. Some banks offer a deferred payment and suspend the installments. Then only the interest has to be paid, the repayment portion can sometimes even be suspended for several months.

A new payment plan is usually negotiated for the time after the deferred payment, because now the term of the loan is extended. This, in turn, is associated with higher costs in terms of interest, which the borrower makes as minus by the deferment.

Also important: if you are already in arrears with your installment payments, you will receive a specific code from the Central Office for Credit Information (ZEK). All borrowers are listed here anyway, so that information about the creditworthiness of the applicant can be obtained when applying for a loan again or for other reasons.

If a lender reports a so-called slow payment, this is noted and the person concerned receives the code in his profile. The code remains even when the loan is fully paid off and is an important reference for other lenders. The creditworthiness is permanently deteriorated, it becomes much more difficult to get a personal loan or a lease.

Hence the tip: It is essential to ensure that there is no slow payment in the first place! Borrowers should definitely seek a conversation with the bank in good time and ask for possible solutions.

Replace credit as an opportunity?

Theoretically, there is the possibility that the current loan will be replaced by a cheaper loan if this is significantly cheaper or if the installments can be adjusted downwards according to your own financial possibilities. This is really only possible in theory, because if you are unemployed, you will not get another personal loan.

When taking out a loan, it should therefore always be assumed that only around 70 percent of the income is available due to sudden unemployment. The installments should then still be payable! It is therefore worthwhile as a borrower to insure yourself in the event of unemployment, which is possible through residual debt insurance.

However, not all banks and financiers offer this type of protection. Other providers only insure certain risks such as incapacity for work due to illness or due to an accident. Unemployment is often not insured here. Tip: It is essential to read the details in the small print, the exclusions from residual debt insurance are listed here.

As long as there is no unemployment and the financial means are available, more than the actually agreed rate can be paid back. This allows the borrower to get a head start that allows them to skip an installment payment.

It is important, however, that there is no delay in relation to the actual underlying payment plan. Additional payments even lower the interest costs because the loan can be paid off more quickly and interest is usually only calculated on the basis of the outstanding amount.

Conclusion: If you are unemployed, quickly look for personal loan solutions

In the event of sudden unemployment, the borrower should quickly look for possible solutions if a personal loan is running. You just did not get into arrears, this is a corresponding note at the ZEK, whereby the entered code remains even after the repayment and permanently deteriorates the creditworthiness of the person concerned.

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