Borrowing without proof of salary is almost impossible both in Germany and abroad and is generally only feasible if the borrower has sufficient collateral.
This is also the reason why self-employed people find it so difficult to get a loan because they usually cannot prove a regular income. Borrowing without proof of salary is only possible in exceptional cases if the borrower has sufficient collateral, such as a life insurance policy or real estate assets, or if he can provide a guarantor who will pay the debtor’s debt should the borrower default.
When is borrowing possible without proof of salary?
Anyone wishing to receive a loan without proof of salary needs, as with any other loan, excellent creditworthiness and proof that their financial situation is stable. For example, people who have such a large fortune that they do not have to go to work or people who are retired can apply for a loan without proof of salary. For example, a borrower may have invested all of their assets and the liquidation would currently bring financial disadvantages, in which case borrowing without proof of salary is recommended.
The bank will in any case require collateral in the event that the borrower can no longer meet his credit obligations. For pensioners this can consist in the assignment of their assignable pension rights, in the case of people living on their assets, in the assignment of assets.
As a rule, however, it can be assumed that banks are not prepared to take any risks and in any case require collateral, be it for a loan with proof of salary or for borrowing without proof of salary.
How are loans granted without proof of salary?
The loan that is granted when borrowing without proof of salary is usually in the form of a credit line that is provided to the borrower. It is contractually stipulated in which form the repayment is to be made, which can be done either in monthly installments or at the end of the term of the loan.
So if you are considering applying for a loan without proof of your salary, you must be aware that the bar that is used for lending is much higher than for people who show a regular salary can and that he must have sufficient collateral.