Credit for trainees – correctly assessing opportunities and risks.

As an Litebank you usually have one problem: far too little money. With an average training allowance of 700 USD gross, as a trainee you don’t really have much financial resources to make big leaps. Should a car or the first home furnishings be made, the question arises: How should I pay for this?

In this article you will learn what 3 options you have to take out a loan as an Litebank. It doesn’t always have to be at a bank.

Banking guidelines make it difficult for the trainee to get a loan

Banking guidelines make it difficult for the trainee to get a loan

If you are thinking about taking out an Litebank loan, you have to keep in mind that banks only grant loans if certain conditions are met . There are banking guidelines that every credit institution adheres to when it comes to lending, but there are certain things in the loan application process that are negotiable if not all of the requirements can be met.

According to banking guidelines, loans can only be granted if there is no risk of over-indebtedness with the borrowing. If you have a good relationship with your house bank or an advocate, the bank may grant you a small loan.

Problem: too little income & too little security

As a trainee, you don’t have a lot of monthly income. Depending on the professional sector, the trainee salary is often below the Hartz 4 sentence or maybe slightly higher. From the bank’s point of view, you are an absolute risk customer in this case despite regular income. However, the amount of this loan is calculated based on your financial options and the bank will probably calculate this differently than you. Therefore, you should not be surprised if the bank only wants to grant you a loan of $ 1,000 .

For example, a trainee who receives monthly remuneration of just $ 400 cannot expect a loan of $ 3,000 because the bank would make itself punishable under the banking guidelines for lending.

For a trainee in the first year of apprenticeship and a trainee salary of 600 USD, it may be much more difficult to get a loan than for a trainee in the third year of apprenticeship with a trainee salary of 800 USD and a confirmation from the employer that after the training you are in a permanent employment relationship is taken over.

Co-applicants and guarantors significantly increase the chances of getting a loan

Co-applicants and guarantors significantly increase the chances of getting a loan

If you are an apprentice and, for example, you can convince your parents to guarantee you, you have a relatively good chance of getting a loan. The same applies if you bring a co-applicant with a good credit rating. Some banks require trainees to have a minimum salary of 1000 USD or, if there is a co-applicant, a minimum common income of 1000 USD. At other banks, a minimum income of 500 USD per month is enough to get a small loan.

Training is equivalent to a temporary job and you must be able to have the loan paid back in full by the end of the training and if you have a low trainee salary you will therefore fail with your loan application.

The bank thinks one step further: what will you do when your training is over? Will your previous employer take you on an employment relationship or will you find a job elsewhere? If you are not taken on and cannot find another job, then you are unemployed at first and can no longer service the loan. If you bring a guarantor or a creditworthy co-applicant with you, he bears the full risk for the loan.

There is a risk of trouble here

If you can win the parents, grandparents or siblings as co-applicants or guarantors, the chance of getting a loan increases enormously. The reason is that the bank’s credit default risk is spread over several shoulders. But be careful, if the borrower actually bursts the loan, then big trouble is inevitable. That should be clear before the conclusion.

Money from private credit marketplaces

Money from private credit marketplaces

Does the house bank not give you a loan? Are you afraid to bring a co-applicant or guarantor on board? An alternative to bank credit is a loan from private individuals that is processed through so-called credit marketplaces. The ideal case is as follows: On these platforms, you set up your project and then you get individual loan tranches from very different people who can finance your project in total. You can find out exactly how this works and what traps there are in the above article.

Education loan No. 173 from the Creambank

Education loan No. 173 from the Creambank

Good Lender also offers students and trainees the option of a loan. Generally at very low interest rates. Collateral is not required. It all sounds very good, but this offer is not available at the beginning of the training but only towards the end of the training or study. You can find further information specifically on Good Lender credit here.

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