Take credit abroad: opportunity or risk?

People taking credit abroad have very different motives for doing so. Apart from the commercial sector, where such operations take place more frequently, private consumers can also borrow abroad to finance a property abroad or domestically. The topic was very interesting before the lowering of eibank key interest rates and the subsequent decline in German mortgage rates, because in other currency areas much lower interest rates prevailed. In addition, many people affected by a negative private credit entry would like to take out a loan abroad. In addition to our general presentation of the topic, we recommend that interested parties use our advantageous credit comparison for more in-depth information and offers in order to prevent wrong decisions. In the remark field at the end of the form, enter a note on this type of loan. So that our advisers know immediately that you need specific information in this regard or consider a foreign loan.

Take credit abroad: the private credit problem

It has been proven that Germans, with as little negative private credit entry from German banks and savings banks, no longer receive loans. All it takes is an unpaid mobile phone bill for this negative entry, which means that domestic credit is destroyed. Some mobile phone customers pay their bill after a dispute with their provider no longer because this ignored a notice. The telecommunications service provider responds to this with reminders, attempts of execution and the negative message to the private credit, which represents a popular means of pressure in this context. However, a bank only looks at this negative private credit information and denies any funding. Another unpleasant aspect of private credit data collection is the determination of the private credit score of consumers, which is calculated even without negative entry solely from the gearing of a person without regard to their income. This is financially very questionable, but private credit method. If citizens have taken some loans too much, their private credit score drops below 90 points, they receive no funding from German financial institutions. All those affected can then only take out a loan abroad.

Is it risky for Germans to take out loans abroad?

Many of our clients often ask us to recommend a foreign loan from our point of view. There is a certain risk if you want to take out a loan abroad and get it to the wrong provider. Most of these loans arrange for financial intermediaries. This not only has something to do with this market, but also quite practical reasons from the consumer’s point of view. Of course, as a German borrower, you could ask any European bank in the EU for a loan and would probably get it with a good credit rating – the European freedom of trade makes that possible. However, in the case of debt-free finance, you would like to borrow abroad to avoid the private credit query from the bank concerned. Now many foreign financial institutions have no business relations with German private credit, but some still have – the knowledge of that is what our financial advisors from financial experts have in common.

In addition, many foreign banks operate a business with clients from other countries, but for some, this process would be unusual and would be sluggish. Not every small camisavings bank or yasavings bank awards such loans to Germany, which also requires a certain amount of experience and expertise. Again, it is the financial intermediaries who know exactly with which partners German consumers can borrow abroad. These financial intermediaries are now more or less fair. In some cases, pre-cost or ancillary business (useless insurance or equity investments) are offered, some agents even send paid representatives in the house of the customer. Such machinations have given the industry a bad reputation, especially because paying pre-cost money does not increase the chances of a loan – on the contrary.

The black sheep of the industry exploit here a loophole, which refers to the “services of a higher kind”, where pre-cost may be required and must not be reimbursed in case of failure – only the consumer therefore does not have to pay. However, if he pays voluntarily, the money has disappeared in most cases, yet those affected could not borrow from abroad. Rely on our free advice and non-binding online loan comparison instead of falling into the hands of a Swiss lending bank. However, if you believe that your own search is more successful, we advise you to keep your fingers off with any kind of initial cost! For years we have been fighting against these tricksters of foreign loans and we ask you to prevent them yourself.

How can you seriously find a good loan abroad?

At financial experts, customers receive a free, credit-based interest rate offer. The applicant can think about this in peace and then decide that there are no costs incurred. On request, the private credit is not queried and the borrowing is not reported to the private credit, in order to protect the score for future financing. A distinction should be made between credit loans for consumer loans for free use, which can come to a relatively small extent from abroad (up to 5,000 euros) and the foreign currency loans for real estate financing, which are secured by a land register debt. Also, until a few years ago, some German and many more Austrian borrowers took out a loan from Switzerland or very much from Japan, because the interest rate differentials between these currencies and the euro were enormous.

This has changed, of course, the European interest rates are 0.05%, the German property interest rates have reached its lowest level since the end of the Second World War. Foreign currency loans are still offered, but the low interest income also faces risks: these loans have variable interest rates, so they can always be more expensive (but also cheaper). In addition, you carry a price risk between the euro and the other currency, if they take a loan abroad in this way.