The search for an online loan with instant confirmation without Credit bureau leads on the Internet to various pages of credit intermediaries. Although Credit bureau-free loans are also advertised there, it is recommended – despite the different wishes of the customer – ordinary loans with a Credit bureau clause.
There is a good reason for the mediators to give this advice: For the majority of customers, instant loans, despite negative Credit bureau characteristics, are considerably cheaper than the internet loans with Credit bureau.
Banks are required to check credit
The experience of the banking crisis from 2007 teaches that frivolous lending not only destabilize the banking system, but also drive consumers into ruin. The fast money from the Internet or from the bank branch promoted the dissolute lifestyle, and in the end stood the insolvency of the borrowers.
To a small extent, losses are factored in – in large numbers, however, they bring even large banks to the brink of collapse, which can then only be averted with state aid.
The policy in the European Union drew the consequence and obligates the banks to a credit check on contract conclusion and during the entire duration of the loans. Comparable laws and regulations exist in many other countries outside the EU.
Label fraud with Credit bureau-free loans
For the German banks and savings banks Credit bureau carries out the required credit check. It calculates the bank score, a measure of the statistical probability of a default. An online loan with instant confirmation without Credit bureau therefore can not exist from a domestic financial institution. That leaves foreign banks and private investors, who reach credit users. The attribute “without Credit bureau” suggests that there was no credit check here. Of course, it’s nothing like it.
Firstly, not only, as mentioned, European banks but also credit institutions in many countries around the world are required by law to audit their clients’ solvency. Second, no one, whether an institutional investor or a private investor, will lend money to money without first having a picture of the risk of default.
In summary, this means that refusing the Credit bureau clause severely restricts the circle of potential lenders without avoiding a credit check. That does not make sense.
Credit bureau information creates trust
By agreeing to the Credit bureau query, you signal to the lender that you have nothing to hide. Of course there is a risk that the loan application could be rejected. But without Credit bureau the rejection is safe, and you can talk about known negative entries. As a rule, Credit bureau’s interest rates are cheaper than without Credit bureau – not only because of greater competition from suppliers, but also because the lender does not have to assume the worst with comprehensive information provided by his client.