Anyone who needs a loan has to meet some requirements. One of them is the certificate of earnings. This document enables the bank to identify monthly income, marital status, tax bracket and years of service. If a certificate of earnings cannot be presented, the banks usually reject a loan. However, there can be a loan without a certificate of earnings.
The loan without a certificate of earnings
If the loan seeker took out a loan from a bank some time ago and paid it off, he will probably still know what conditions must be met for a loan without a certificate of earnings. In addition to the comparison of expenditure and income (budget), which is usually drawn up together with the bank advisor, these facts also had to be proven. The monthly income from employment that is subject to social security contributions can best be proven with proof of income / certificate of earnings.
The certificate of earnings contains data such as the monthly income from work, and the duration of the employment relationship can be checked. Each certificate of earnings includes the employee’s entry date. If the entry date shows an employment period of less than six months, the loan seeker could still be in the trial period, although there is no certainty that the employment relationship will continue later.
The same applies to temporary jobs, the dates are noted in the certificate of earnings. Any garnishment of wages is also shown. Under these aspects, there will only be a credit without a certificate of earnings through a solvent guarantor or other credit protection. It should be mentioned that employees who take out a loan and can submit an employment contract from which long-term employment can be derived do not need a certificate of earnings.
There are also exceptions for loan seekers who cannot provide a certificate of earnings. For self-employed people and freelancers it is the income tax return that is valid as a certificate of earnings. But the pensioner does not have to produce a certificate of earnings either. He can’t do that either, since he has his pension notification as a replacement. In contrast to a notification that a Social Welfare recipient has, the income from the pension notification is recognized. A certificate of earnings may also be waived if there are other sources of income.
This can be rental income or rent from leases, it is important that they are paid again and again. It can also be every three months or it can take place every six months. You have to show a certain amount, then there is also a loan without a certificate of earnings. A certificate of earnings can also provide information as to whether a loan seeker has provided truthful information, for example when making an online loan application.
The regulated and verifiable income is the basic requirement for a loan. If no certificate of earnings can be presented, other collateral must be available to guarantee repayment of the loan. This can be real estate, such as a house or a condominium or similar. which can be deposited as security. If the loan seeker has a life insurance policy, this can also be taken out to secure the loan. A loan without a certificate of earnings can also be approved by a solvent guarantor.
The guarantee secures the loan security, since the guarantor must continue to pay the loan if the borrower defaults. However, this version of credit protection is not as easy as it sounds. A guarantee can have far-reaching consequences. If a guarantor gives a guarantee and is not in a particularly rosy economic situation, he can get himself into financial difficulties if the borrower defaults. The guarantee is entered in the surety of the surety.
If he needs a loan himself, the guarantee can reduce his creditworthiness and he needs a guarantee himself. Therefore, the guarantor must have an unlimited credit rating. A positive Credit Bureau is assumed, as well as the regular income earned, which covers his financial obligations and, if applicable, those of the borrower. The bank will scrutinize this. If the guarantor meets all the requirements, a loan can be approved without a certificate of earnings.
As an alternative to a loan without a certificate of earnings, a loan from a car bank is an option. In this case, however, there will be no cash, but if the loan seeker wants to buy a car, he can finance it through a car bank. Especially if the car buyer has been with the car dealer for many years, a certificate of earnings is usually dispensed with. There is no need to provide proof of income as the car serves as security. The vehicle registration document must also be deposited with the bank.