If you try to take out a loan without a regular income, you will quickly reach your limits: The classic commercial banks in Austria do not provide financing if no regular receipt of money is proven. The banks are thus complying with the rules for responsible lending, which is primarily intended to protect consumers. Nevertheless, you can find a very appealing advertisement on the Internet about “Loans without income”, which suggests the opposite. If you follow this advertisement, granting loans without income is not a problem if you turn to the right lenders. But what do you have to think about it and what do you need to know before applying for such a loan?
For what reasons is there no income?
Before you start looking at the exact terms for financing without income, you should ask yourself why this loan is necessary. The main thing is to consider why there is no income – and what the borrower offers as an alternative. Does an unemployed person have to apply for a loan that receives state support during the period of unemployment and that expects to conclude a fixed employment contract shortly? Is the borrower a pensioner with an adequate pension? Is it a student with a temporary job? Does a recipient of social benefits make a loan application? Or does a housewife want to apply for a loan without her own income? The reasons why the borrower cannot provide proof of income are quite interesting. If there is another source of income, for example because the applicant receives maintenance payments, because he receives a pension, because he receives state benefits, or because he works as a temporary worker, this can make it easier to lend. First of all, a distinction must be made as to whether other income is available as an alternative to regular income or whether the borrower has no income.
Why is a loan without income necessary?
Regardless of whether there is an income replacement or not, every borrower without their own income should ask themselves whether financing is absolutely necessary in a financially difficult time. Of course, there may be situations in which you cannot do without credit. If there is no regular income, it will be very difficult to get a loan. You also have to consider that every loan entails an additional payment obligation. The money has to be paid back to the lender, and the obligation to repay it usually takes several months or even years. If the financial situation is already tense due to the lack of income, you should seriously consider whether a loan is absolutely necessary. In this situation, every borrower is required to look very carefully at their financial situation and consider whether financing is required. Only if there is no solution other than financing, should this additional financial obligation be seen as a way out and start looking for a loan without proof of income.
Who grants a loan without proof of income?
In principle, three lenders are eligible for a loan without income: the commercial banks in Austria, a bank abroad or a private lender. But what do you as a borrower need to know about these lenders?
No credit approval from Austrian banks
The first point of reference is that commercial banks in Austria generally do not grant loans without proof of income. This is mainly due to the fact that they are obliged to provide serious advice and responsible lending. Those who do not receive their own income cannot pay back financing – this is the understandable announcement. If the bank advisor nevertheless grants a loan to a borrower with no income, he risks that this loan can no longer be repaid quickly. The applicant remains guilty of the loan installments, the loan becomes distressed – and the borrower gets into massive financial difficulties and, in the worst case, overindebtedness. Against this background, banks in Austria also refrain from lending without proof of income to protect consumers. It does not matter whether it is a branch or a direct bank.
Banks abroad as an alternative
One often hears that banks abroad should be an option when looking for a loan with no income. Again and again, lenders in Switzerland or Liechtenstein are mentioned as a proposal. However, this option is only a recommended choice in certain circumstances. Banks in Switzerland generally do not require an extract from the KSV when lending. On the other hand, a regular income and solid financial and asset relationships can be demonstrated. So if you have a KSV entry and have a regular income, you can often apply for a loan from a Swiss bank. If you do not receive a regular income, it often looks very different. A bank in Switzerland will then also ask the question of the financial means from which the loan should be repaid. It is therefore very unlikely that funding will be approved unless the borrower shows no income. If this loan is approved by a bank abroad, you should take a very close look at the interest so as not to get to an overpriced provider.
Private lenders are an option
Loans from a private lender can be a sensible option. There are some internet platforms in Germany as well as in Austria that mediate borrowers to private investors. These investors are looking for an interesting investment with an attractive interest rate. In this context, lending to a borrower without proof of income can be an option. However, one should take a very close look at the interest rates and other conditions for such financing. If the interest is largely in line with the market and the lender demands acceptable collateral, you can take out a loan from a private individual. It is then important for the borrower that he can reliably pay the agreed loan installment over a longer period so that there are no difficulties with the lender.
What about advertising on the Internet?
Anyone who enters the search term “credit without proof of income” into the popular search engines on the Internet receives a great deal of information. The advertising is usually very attractive. She often suggests that taking out a loan without proof of income shouldn’t be a problem. At first glance, it is very difficult to identify which sites are legitimate and what can be said about the providers. This applies all the more if you are dealing with the subject for the first time and have no experience with such offers. Therefore, great caution is required before making a loan request and entering into a contract through such websites.
In the best case scenario, the first step is to research online for customer experiences with the preferred provider. An inquiry to consumer protection may also bring clarity. It’s worth spending a little time researching and testing the provider. Unfortunately, there are still black sheep on the market who want to benefit from a borrower’s financial plight. This often results in high interest rates, hidden costs and unfair credit conditions. This is what makes a borrower without income even more difficult. Therefore, every consumer should find out about the lender of their loan without proof of income and look for an alternative when in doubt about the seriousness.
Loans without income are possible, but are rarely recommended
When it comes to financing without proof of income, the reason for the lack of proof plays a role. If the borrower has no income, he should check very carefully whether financing is absolutely necessary at this point in time. You should also consider the money from which the loan installment is paid if there is no regular receipt of money. If there are alternatives such as a pension, maintenance or other income, a loan without income can be possible. As a rule, the donor will not be an Austrian bank. A bank abroad will also be careful when lending without income. Financing from private donors can be an option. Before deciding on a loan, you should check the conditions in detail. Interest, additional costs and collateral are important. If you have doubts about the reliability of a provider, you should definitely choose an alternative.