Bad Private credit and creditworthiness, what now?

Apprentices are young people who want to build up an independent life with their first education. Be it the driver’s license, your own apartment or even a car. Since this does not work alone with the money of education, there are banks that have adjusted to this young clientele over the years.

What is a loan for apprentices?

What is a loan for apprentices?

Here, the young people in training opportunities are given to take on certain conditions, under certain conditions, a loan in order to then repay this to the money-giving institute. With a credit comparison and also the selection of the lender, everyone should be pre-occupied, so as not to get into a debt trap.

Information about the loan for apprentices

If an apprentice decides to borrow, here are not just a few points to consider, but also important issues to clarify in advance to avoid debt. As with any borrowing itself, the credit for apprentices should be discussed in advance with their own house bank.

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The house bank knows the young customer through the already existing current account and has an eye on existing inputs and expenses. This has the advantage that the time to check whether enough money is available for the repayment of the loan, over the period of processing the application to the payment of the loan amount is very low.

Requirements for applying for a loan

    • majority

Even if the loan sums for apprentices are not as high as they might be for employee loans, there are still some requirements to be met. So the borrower should be of legal age.

    • guarantee

In most cases, lenders insist on a guarantor to ensure repayment security. But even credit providers, mostly from the Internet, already offer cheap loans for apprentices, where a guarantee is not mandatory.

    • Creditworthiness and probationary period

The submission of the apprenticeship contract will continue to verify that the apprentice has already completed the probationary period so that the creditor can be sure that he will receive repayment in the next 2 to 3 years. A very important requirement to get a loan for apprentices is clearly the credit rating. The lender will definitely start a Private credit query and thus the application for the apprentice stands and falls, because should already negative information on existing repayment contracts, for example, a mobile phone contract be noted, this does not throw the lender on the loan application.

Conditions of a loan for apprentices

Banks have adapted to this situation in order to provide credit for young people in their education. Thus, these provide for the loan for apprentices favorable conditions with low interest rates, a low rate with corresponding maturities, which usually extend over the entire apprenticeship.

Thus the apprentice has the possibility to pay back the loan for apprentices at a constant interest rate. When requesting a higher loan amount, the apprentice must provide proof that he / she will be accepted into the employment relationship after the apprenticeship. Of course, the requirement here is also the creditworthiness of the applicant.

Example explanation of a loan for apprentices

Example explanation of a loan for apprentices

With regard to the amount of the apprentice’s allowance, the apprentice must consider when applying for a loan to check in advance whether and how much he can afford a possible repayment installment. For example, if the apprentice salary is feasible, you could get a grant of $ 1500.00 with an APR of 0.99% and a 0.99% interest rate per annum, no processing fee, and a term of 36 Months. The total loan amount would then reach a total of € 1523.00. This means that the apprentice will ultimately have to pay the lender a total loan over 36 months out of a total of € 1523.00, at a calculated rate of € 42.30.

Special forms and sub-forms of a loan for apprentices

Special forms and sub-forms of a loan for apprentices

A special form of loans for apprentices are so-called instant loans. In the application and processing mainly equate to the loan application with a local bank, an instant loan is only possible online on the Internet.

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The advantage here is that the apprentice learns after a few hours, whether he is granted the loan or not. The request is straightforward and here, too, the rates for repayment itself can be chosen.

If a commitment has been made, then the entire application with the corresponding required documents runs by mail and the payment after checking all facts is usually in two to three working days. Here, however, the apprentice must also check exactly which provider he turns to so as not to get into debt.

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In addition, the instant loans are also offered in the option of Private credit freedom. However, these credit agencies are predominantly via foreign banks, such as Switzerland. A sub-form of a loan for apprentices, for example, means subject-related loans. Such as a car loan, in which the borrowed money is explicitly requested for the purchase of a car or even a mobile phone contract, in which the apprentice controls the mobile phone with its user conditions via a telephone company in a contract for a long time and this at a fixed monthly rate served this contract. Furthermore, installment purchases in so-called online shops, but also the credit line at the house bank to sub-forms of a loan and must be served here in installments or fixed amounts monthly.

Pitfalls in loans for apprentices

Pitfalls in loans for apprentices

So-called pitfalls in borrowing lurk not only in the loans for apprentices, but in general in the loan transactions. The meaning lies here in possible traps, the so-called small print, but also in the execution of a loan contract, which can bring the borrower into financial difficulties.

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Examples of this are particularly dubious providers on the Internet, which make the apprentice in the interest payment of the loan, but also in other fees and incidental costs, the repayment terms, make it almost impossible.

Very soon, the apprentice can sit here with the contract in the debt trap. Also offered additional services or insurance, which make the loan application dependent on a payment, may be an indication of a dubious provider and a credit trap.

If you apply for a loan, you should only get it processed without being forced to conclude contracts. Of course, apprentices can also help themselves not to fall into a credit trap when they realize their financial limits.

Because in advance, it must be examined with what financial scope a possible rate for a loan can be repaid, without getting into a financial misery.

Bad Private credit and creditworthiness, what now?

If the apprentice has not recently served a mobile phone contract in the form that this resulted in a negative entry and thus a bad credit rating, it is relatively difficult to impossible to get a loan from a local bank for apprentices. These institutes work closely with the Private credit institution and always carefully assess requirements.

On the Internet, however, the opportunities for apprentices to get a loan despite bad credit rating do not look so bad, although it is important to take a close look at the providers and compare them in advance. Most Private credit-free loans are also offered to apprentices with foreign banks and differ in the higher interest rate of the loan agreement.

Here is your own self-assessment is important, whether you will be able to serve another loan despite bad Private credit, even if so many offers tempting sounds.

Current development in terms of loans for apprentices

Banks and private providers have specialized in private sector finance over the last few years. Especially in this day and age families, but also young people, like apprentices, find it difficult to finance their wishes or urgent purchases with their own money.

The number of loan applications, but also installment purchases or car and mobile phone financing up to the discretionary credit has increased with the years and the associated special offers and attractive terms. Interest rates such as APR and debit interest rates may be kept low, especially for young people and families, to ensure faster and more acceptable redemption.

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So the interest rates can be at 0.99%. But there are also providers who, depending on the loan application, set an effective annual interest rate of 11.70% and a borrowing rate of 7.82%, which nevertheless makes a huge difference to the total repayment of an apprentice’s loan repayment.

In conclusion, the key to making a loan for apprentices is comparing providers and checking the terms and conditions of the relevant providers, as with all credit offers.