Getting a loan from a Cream ban as a freelancer is not always easy. The reasons for this are that as a freelancer you rarely have a regular income and are therefore considered a risk group for the bank. As a freelancer, you are also more dependent on the economic fluctuations of the market. An economic low affects the financial situation of a freelancer very quickly and can lead to the fact that he can no longer pay the installments for a loan regularly or not at all. Some banks do not want to take this risk, which is why they do not pay out loans to freelancers. However, there are ways to get a freelance loan.
Loan for freelancers
Cream banks require proof of regular income. Anyone who can demonstrate a regular, high income as a freelancer for many years can even be lucky with a Cream bank, at least if they do not have Credit Bureau entries. However, if you cannot do this, you must be able to offer the bank collateral. Collateral means home ownership, a house or property, but also a building society contract or life insurance.
The respective collateral must have at least the value of the desired loan. Then the applicant can take out a mortgage on his security. This means that the applicant promises that the bank will be able to use the collateral, forcibly manage it or sell it, should the applicant no longer be able to pay the installments for their loan. The bank can then use the proceeds to cover the debts.
Should the bank receive more money from the sale of the collateral than the applicant owes, the rest of the money will of course go back to the applicant. By doing this, the bank secures itself from the deal so that it does not make a minus, even if the applicant is unable to repay the money. The bank can also seize this on a regular income, although this is difficult for a freelancer because he does not have a regular income. A loan for freelancers can therefore be obtained by providing security.
Another option is to name a guarantor of the bank. This guarantees the bank that, in the event that the applicant is no longer able to meet its obligations to the bank, it will be liable for the loan or the other installments and will pay these to the bank.
Loan for freelancers through a foreign bank
Some foreign banks advertise that they offer various loans, especially for the self-employed and freelancers. Here you should get comprehensive information about the current conditions and compare the offers of the various foreign banks. Interest rates vary between 5 and 16%, with a term of 12 to 120 months. Many foreign banks promise to process the loan application quickly, so that you can expect a response from the bank and the money within 24 hours. Before that, you can get an offer for a loan for freelancers without any obligation. However, you should pay attention to hidden costs, as a processing fee, a commission and insurance fees may also be added. So read the contract carefully.