Express credit – a loan for me? Overview of rip-off credit
In the case of express loans, the desired amount of credit is transferred to the borrower into a current account, usually a checking account, immediately after the loan has been confirmed. Express loans are not only offered by local credit institutions or banks, but also by online banks or direct banks. This method enables borrowers to compare the various conditions in order to find an express loan that is cheap for them.
The characteristics of express credit
In the case of express loans, which are also called instant loans, the lenders, i.e. the banks or credit institutions, generally do not carry out extensive credit checks. If an express credit or a direct loan is applied for, proof of a regular income is required. This proof is provided in the form of an employment contract or pay slips.
If a direct loan is requested from the house bank, it may be sufficient that regular payments are received. If a loan is applied for via the Internet, the borrower must activate himself using the postident procedure. In a postident procedure, the identity is verified. The borrower receives a form from the lender with which he has to go to a local post office. The identification and thus the legitimation takes place there by presenting the identity card. The postal official confirms the identity of the person concerned.
Express loans are usually small loans or consumer loans. Small to medium loan amounts are made available here. Proof of wages and salaries serve as security. Evidence of an extensive collateral check is omitted here in favor of quick payouts. However, the borrowers cede their wages.
If an express credit is approved through the house bank, an immediate credit is usually made to the current account, usually the checking account. This quick payment is initiated via an internal booking. Loans that have been applied for at online banks or direct banks are also immediately credited by the banks. However, since no internal booking is possible here, the transfer takes between two and three days. The credit is therefore made within the usual bank terms. In special cases there is a lightning transfer, which is also called express transfer.
Urgent loans from the Internet
Especially when smaller loan amounts are applied for, the express loans can be a real alternative to the usual bank loans. There are a number of inexpensive express loans from reputable providers, especially on the Internet. The conditions that can be compared on the Internet are generally transparent and therefore understandable for customers. Customers can freely dispose of the loan amount. The interest rates for express credit are generally fixed. The interest rates and the monthly charges are also manageable for the borrowers. Therefore, the monthly charges remain low. When lending, banks or credit institutions also ensure that customers do not become over-indebted.
Customers can apply for express credit themselves. It is also possible to apply for an express credit through an intermediary. This is usually the case when the application is made to a bank abroad, such as a bank in Switzerland. However, it must be noted that the agency costs are borne by the customer.
As a rule, express loans are issued without a Credit Bureau query. However, the self-employed have the problem that they cannot prove regular salary payments. Therefore, the express credit can also be done with a Credit Bureau request. In order for the credit application for an express loan to be processed quickly, the applicant must carefully fill out the required forms and submit the required documents.
For loans, whether it is an express loan or a house bank loan, a certain amount is generally paid by the lender to the borrower. He does this if he has confidence in the possibilities and willingness of the borrower to repay this loan. This trust is called creditworthiness.
The Banking Act
According to the Banking Act, a loan is the granting of a loan in the form of money. However, it can also be an acceptance loan. All of this is referred to as credit business and is regulated in Section 1 No. 2 KWG. Discount transactions and guarantee transactions are also listed separately in Section 1 KWG. All possible credit risks are listed. The regulatory term of credit is regulated in § 19 ff.
Differentiation of loans
Loans are also differentiated according to their maturity in the KWG. Loans with a term of less than one year are called short-term loans. Loans with a term of one year to less than four years are called medium-term loans. Long-term loans are loans that have a term of at least four years. The express loans are mostly short-term or medium-term loans. However, long-term loans also occur, albeit rarely, with express loans. The express loans usually have a term of between three months and six years.
Loan, money lending, loan
In the KWG, loans are also differentiated according to the form of credit. On the one hand there is the loan and the loan and on the other hand there is the loan. When differentiating according to the purpose of the loan, a distinction is made between non- dedicated loans and dedicated loans.
Express loans are almost always free-use loans. This means that the loan is made available to the debtor. He can freely dispose of this contract. That means he doesn’t have to show the lender exactly what he spent the money on. However, the freedom from purpose does not affect the repayment modalities, which are specified in the loan agreement.
Dedicated loans are, for example, given to companies to purchase equipment. Private individuals receive earmarked loans if, for example, they are granted construction finance. In these cases it must be proven what the money was spent for. Exactly what the money can be spent for is specified in the loan agreement.
Loans are also differentiated according to how they are secured. A distinction is made between a secured loan, a partially secured loan and an unsecured loan, also known as a blank loan. In practice, blank loans are not available from banks, savings banks or credit institutions. Private lenders, on the other hand, grant loans to relatives or acquaintances without carefully examining their economic situation.
A secured loan is, for example, a construction loan. Here the house is security. Solvent guarantors can also ensure that a loan is secured. The partially secured loans are the most common in practice. This is also the case with express loans. Here the wages or salaries are taken as a basis for security. However, if the income from the dependent activity ceases, the credit is no longer secured. As a result, some lenders require additional collateral such as home ownership, life insurance or a surety.
A distinction is also made between the borrowers. Loans given to companies or the self-employed are productivity loans. In practice, such productive loans are referred to as corporate loans. If loans are granted to public budgets, these are municipal loans.
Loans given to households are consumer loans or consumer loans. Express loans are such consumer loans. They are usually only given to private individuals, not to companies and rarely to self-employed people. A distinction is made between lenders between bank loans, savings bank loans and supplier loans.
While there are hardly any noteworthy differences in bank and savings bank loans, the supplier credit has a special position. Bank loans or savings bank loans give customers money. Supplier credits are usually goods that have not yet been paid for or that have been ordered on credit.
In addition to the option of applying for a loan on its own, i.e. as an individual loan, companies have the option of applying for a syndicated loan, i.e. a joint loan. Individuals always apply for individual loans, which is also the case with express loans. A further distinction is made based on the granting of the loans. On the one hand there are unsecuritized loans, on the other hand there are securitized loans, i.e. loans with a school loan or a bond.