Getting a loan without collateral in Latvia with a bad credit history is not easy, but it is possible. Debtor registers maintained by private companies, incl. Creditreform includes data on borrowers who have defaulted on non-bank lenders or merchants on time. All small lenders who give unsecured loans assess customer information and look at their solvency before granting a loan.
Negative credit history loans
It should be understood that negative credit history loans may be granted even if the debtor has only unpaid debts to credit institutions. Commercial banks have their own special credit register and banks do not share this information with other service users. This means that non-bank lenders do not have access to data that is visible to credit institutions. Only insurers and lenders owned by banks can get this news without any problems. For example, the incredit group is owned by Rietumu Bank and has access to the Bank of Latvia’s credit register. This means that fast loans with bad credit history or consumer loans to such customers will not be available without credit.
Almost 100% of life loans on the Internet are available to people with 1) official income, 2) their bank account, 3) mobile phone and are not blacklisted. Loans to debtors may be granted in situations where the irregularity has been remedied, ie the arrears have been paid.
No non-bank creditor demands that no other loan be taken out
Its because the number of such people is not too high. The most important thing is to be able to see that payments are made on time. You may need to apply for a loan at several companies to test your borrowing ability, as no one can guarantee that what you choose for your first money will really lend. Problematic clients do not want to cooperate, but those who are willing do not always want to post it publicly. In Latvia, all consumer loans that have to be covered by monthly payments are also available to loyal customers. Prove that you are trustworthy is the key when it comes to borrowing.
Why borrowing without a bank tends to be more expensive?
You may not even know that unlike credit institutions, non-bank lenders issue loans from personal funds. By contrast, commercial banks can lend 10, 20 and even 30 euros for every euro they receive in their deposits. This is possible because the state provides this opportunity. As a result, banks can be seen as virtual money printing machines because the money they lend to them is not at all. Quick loans, for a period of 12 months or short term, are issued in the form of fully normal loans using only own funds. If the customer defaults and the money cannot be recovered, the creditor loses his own funds. We can understand that the risks of banks and private lenders are completely different, so fast credit companies often have higher interest rates than credit institutions.
The likelihood of loans to jobless debtors or collateralized loan history is virtually nil. When you sign up for a loan that requires a real estate or mortgage, your chances are higher than zero, but still low. Lending money to a non-income customer is a disproportionate risk of not recovering money, as Latvian law does not allow it. If the customer states in the questionnaire that there is no income and the solvency is not checked, this may later be used as a basis for deviating from the terms of the contract. Thus, although the pledge may be forfeited to recover the debt, it would not be lawful and such a decision could subsequently be challenged. Credit lenders should also remember that pledging is not the lenders’ core business and is only a last resort in order to recover the money lent. Even if the collateral assessment confirms that the collateral held by the client is more valuable than the amount of the loan, the loan may be refused.
Each of us has our own special circumstances and only by applying for a loan can we personally ascertain compliance with company requirements. There are many creditors, but the criteria for assessing creditworthiness and credit risk are never fully disclosed, so the outcome cannot be predicted in advance.
How do I get on the blacklist of debtors? How long is the data stored?
Enrolling a debtor in bad credit history databases is quite easy. There is a delay in paying off your debts or bills and you will receive a warning (not always) by email and / or over the phone. When this is not enough, a letter is sent to the customer’s known place of residence (contact address). Debtors who continue to ignore their obligations are taken to debt collectors and later to court. All of this is in the middle of calculating fines, which for fast loans cannot exceed 100% of the loan amount, including commissions. In the final analysis, the court recognizes the creditor’s rights and transfers the debt to bailiffs, who have the right to describe the movable property, real estate, and block the debtor’s bank account. In addition, the customer is entered in debtors’ registers, which will make it significantly more difficult for them to borrow money or receive postpaid services.
Information on the fact of credit defaults
It is kept in the Bank of Latvia credit register and also in the black lists of private companies (creditreform, uab gelvora, paus consultant) for 3 years after the violation was eliminated. Such an approach helps to protect other merchants from cooperating with dishonest customers, but at the same time makes life difficult for the borrower. In the past, it was possible to remain in debt with one bank or a non-bank company, cross the street and borrow from one another without problems. This is no longer possible at this time as the data is checked electronically and only takes a few minutes. Despite the above, there are still quite a few people who need credit loans with a negative, damaged, or bad credit history. As we found out, some of these clients are indeed eligible for the loan and some could, but certainly not all. You can only find the answer to your eligibility by applying for a loan online. If you plan to borrow, act with integrity, evaluate your credit standing and repayment ability, borrow responsibly.