Loans are difficult to obtain in Germany with a negative Credit Bureau, even if soft negative features, contrary to the assumption of many consumers, do not in all cases exclude borrowing. An alternative to tough negotiations with a German financial institution about lending despite a negative entry at Credit Bureau is to apply for a Credit Bureau-free loan from Switzerland.
Swiss banks cannot obtain Credit Bureau information
Swiss loans can be applied for despite a negative Credit Bureau because a bank based in Switzerland has no access to the data of the German Credit Bureau. These are only available to members of the Credit Bureau, which do not include federal financial institutions. The ZEK is an institution comparable to the German Credit Bureau, but has no data on credit applicants living in Germany before they have taken out a loan in Switzerland for the first time.
Since the Swiss banks have no information about the payment behavior of their German customers, they mainly grant loans up to a maximum amount of 3500 dollars. Few banks have increased the maximum loan amount for Swiss Credit Bureau-free loans to $ 5000. Furthermore, despite negative Credit Bureau entries, the offer for Swiss loans is mainly aimed at employees and civil servants, while only a few federal financial institutions also grant freelancers or self-employed people a loan free of Credit Bureau.
For most Swiss banks, there is an additional age limit of fifty-five or fifty-eight years when borrowing. Borrowing in Switzerland will not emerge from future Credit Bureau information, but it will be reported to ZEK. The simultaneous take-up of several Credit Bureau-free loans from different Swiss banks, considered by some German customers, is not possible due to this notification.
No exchange rate risk
Despite negative Credit Bureau, German bank customers are transferred Swiss loans to the specified bank account in the local currency, so that there is no currency risk. The borrower also does not incur any additional bank charges since the Swiss banks maintain accounts in Germany for the loan repayment.
Credit Bureau-free loans from credit institutions in Switzerland are almost only applied for by people with negative entries in the German Credit Bureau, while the additional benefit of a Credit Bureau entry of the loan that is not made is rarely perceived by credit customers with a good credit rating. Since the affected consumers in Germany can hardly take out a loan, they accept somewhat higher interest rates for Credit Bureau-free loans.
These reflect the increased default risk of the bank due to the lack of creditworthiness information, but they must also not be too high. Since many banks offer Swiss loans in Germany despite a negative Credit Bureau, borrowers conduct a price comparison before concluding the contract by checking the offers of various banks from Switzerland.