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Foreign credit: watch out for these expensive pitfalls!

“Cheap loan from abroad even without Credit Bureau!” – Such offers can always be found on the Internet. That sounds very tempting to some, because with a bad Credit Bureau you don’t have to knock at most German banks. But what is really behind such offers? What are the special costs and risks associated with a foreign loan? And what are the alternatives to foreign loans?

Beware of high agency fees

Beware of high agency fees

Loans from abroad are often offered by dubious online financial intermediaries who charge a whopping fee of several hundred USD in advance for organizational matters, expense reimbursement and advice – regardless of whether the loan agreement with the actual lender is actually concluded. Blue-eyed customers often get rid of their good money in this way, and in the worst case do not get any credit at all. Hence the tip: Never pay any fees to a credit intermediary before the agreed loan has actually been credited to your account in full.

Foreign credit really without Credit Bureau?

Foreign credit really without Credit Bureau?

Be honest: Would you lend money to someone whose trustworthiness you cannot assess at all? Rather not, is it? Even if foreign banks do not always work directly with the German Credit Bureau, they naturally check the creditworthiness of each customer before granting a loan. They can easily access data from Europe-wide networked credit bureaus. The result: Even with foreign banks, you will only get a loan if you have not yet been noticed as a delinquent payer and your income is sufficient to reliably service the credit rates.

Foreign banks often charge excessive interest rates

Foreign banks often charge excessive interest rates

If an international loan is offered to you despite moderate creditworthiness, you have to expect high effective interest rates of often 10% or more, because the provider can pay the increased risk of loan default well – so well that you can easily get into financial distress when repaying . You take an additional cost risk if the loan is not in USD but in a foreign currency such as. B. Swiss franc or US dollar is granted. The reason: If the exchange rate of the foreign currency rises during the repayment phase, the costs for the loan installments rise – calculated in USD.

Better keep the Credit Bureau score clean

Better keep the Credit Bureau score clean

Better improve your Credit Bureau score than getting involved in a dubious and often overpriced foreign loan. You should follow the following rules:

  • Always pay bills on time
  • Pay off current installment loans on time
  • Make up for an overdrafted checking account promptly and completely
  • Cancel unnecessary bank accounts and credit cards
  • Avoid frequent switching of accounts, cell phone contracts, etc.

Another tip: When you obtain loan offers, make sure that your request is not treated as a “loan request”, but as a credit-neutral “condition request”.

Good Finance helps you further

Good Finance helps you further

Do you need money for an urgent purchase or do you want to reschedule expensive old loans cheaply? Be careful not to get involved in dubious loan offers. Particular caution is advised when it comes to supposedly Credit Bureau-free foreign loans. The interest on this is often inflated and there is often no money abroad without proof of creditworthiness.

Good Finance will be happy to help you personally. Our experts work for you and check which loan offers are available to you free of charge. You can either use our Good Finance online calculator or call us at any time, we will be happy to help you!

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