Challenges of taking a loan with sickness benefits
If you want to take out a loan with sickness benefit, it will be a challenge. For each loan, the borrower is checked to see if he has a good credit rating so that he can be sure that the loan will be repaid. So a credit bureau information is obtained and there must be proof of income. So the last payrolls are important and an employment relationship, which is indefinite.
Who receives sickness benefit, has been ill for a long time. The amount of sickness benefit always depends on whether the borrower is legally or privately insured. Many do not know how long they will still be ill, so that information about recovery can not be given. In the worst case, temporary or permanent disability may occur, with incomes still shrinking.
What must be respected?
Since the income is very low in the period where sickness benefit is being paid, there must be collateral for the bank to grant a loan in this situation. The applicant can receive a loan with sick pay if he has a guarantor. Without this it will be difficult to obtain a loan with sickness benefit from the bank. The guarantor must have a fixed income and, moreover, have no credit bureau entries. If the guarantor is creditworthy in the eyes of the bank, the loan should be given with sick pay. If you can not provide a guarantor, you can ask the bank if there can be other collateral for the loan with sick pay. For other collateral, banks prefer insurance policies that have been in place for several years. This creates a high buyback value. The repurchase value should always be as high as the loan amount that is taken up.
Which alternatives can be used?
Credit standards that banks have to meet must be met. Since regional banks often do not lend money in this situation, alternatives must be found. An attempt to find a provider on the Internet is always worthwhile. It is not uncommon for private individuals to grant a loan with sickness benefit, which does not have the same strict guidelines as banks. In addition, an attempt can also be made in the private sphere to search for a person who would be willing to lend money. There would be no interest. Here, however, the borrower should make sure that also for the borrowed money a contract is set up.