24 hour credit: the quick credit – we clarify!
Due to the great competition on the market and the integration of the Internet, as far as lending is concerned, 24 hours of credit have become established on the market. The peculiarity of these loans is that the applicant can usually expect the application to be processed more quickly than with a classic loan and, as a result, the loan amount to be paid out. Financial institutions are endeavoring not only to undercut each other with regard to the conditions for loans, but also with the processing of the loans more speed is required than ever before. Direct banks have a special influence on the emergence of 24-hour loans, as they only process their transactions over the Internet and thus also avoid postal routes or the direct route to a bank branch for borrowing as a time-consuming contact option for borrowing.
Awarded over the Internet
The 24-hour loan is mostly granted via the Internet, since both the administrative effort and the processing times are very low. This means that not only a quick, but often also a particularly cost-effective loan can be achieved because the banks often pass on the savings in the administrative area to the customers.
As the name of the loan indicates, the loan should be paid out within 24 hours. However, it is important for applicants to know that the 24-hour credit does not necessarily have to be particularly good or particularly inexpensive. The 24 hour loan is often offered as a so-called Credit Bureau-free loan. In this case, the credit transaction is processed without the involvement of Credit Bureau. This means that the loan is processed by a foreign financial institution without checking the applicant’s Credit Bureau and without an entry in the applicant’s Credit Bureau. For a consumer who has a problematic Credit Bureau, this can be a solution to obtain a sum of money as a loan that would not be achievable under normal circumstances at established German banks.
For the lenders, this non-Credit Bureau-free processing results in an increased risk with regard to the repayment of the loan and therefore the lenders often have the risk to be hedged with higher interest rates compared to the classic loan. This means that with the 24 hour credit-free loan, you should also expect higher interest rates than other consumer loans.
Costs for a 24 hour credit
In addition, there may also be fees or commissions for the processing, because the loan is taken out via the Internet, at least free of charge, via credit intermediaries, who in turn are also interested in making a profit in the credit business. Since direct banks do not have cash on the Internet, one should also view the statement of the disbursement relatively, because the loan amount must reach the applicant’s checking account within 24 hours from the application, which can prove to be difficult to implement in practice.
It usually takes more than 24 hours for the borrower to really have the loan amount if the application was processed via the Internet and thus a direct bank. It may therefore make sense to check with the house bank whether it is possible to take out a loan that can be disbursed at short notice, because here too it is possible to receive the loan amount within 24 hours, but also to obtain favorable interest rates and how Waive commissions and agency fees as ancillary costs.
In particular, the loans at branch banks with branches are often not given as a so-called 24-hour credit. Nevertheless, it may well be that a classic installment loan is paid out faster than a 24-hour loan from a direct bank. If there are sufficient cash holdings at the branch bank, the loan amount can be transferred to the applicant’s account immediately after the loan has been accepted, which means that the money required can also be covered at very short notice. A comparison or an inquiry is always worthwhile if you do not need the 24 hour credit as a Credit Bureau-free credit.
Processing the 24 hour loan
The application procedures are fairly uniform and the same application formalities such as an income check, a place of residence check, etc. are almost always required. If the application for the 24-hour loan is made via the Internet, the applicant must fill out a corresponding application form for the loan application. Proof such as copies of ID and proof of income for borrowing must also be attached to the application.
It is also almost always important for borrowing that an employment contract is presented, which in turn proves that you have been with the employer for a longer period of time and are no longer in the trial period. These documents for the application are transmitted via the Internet or by fax. If the loan is not Credit Bureau-free, the bank is also given a signature to obtain information from the Credit Bureau. This approval does not apply to Credit Bureau-free loans.
If the loan is applied for at the house bank, then an application form and the submission of the necessary proof of income are also required. Here, too, the information is obtained from Credit Bureau by signature.
The advantages of a 24 hour credit
An important advantage of a 24 hour loan is the quick availability of the loan amount. The contract is concluded at short notice and the money is already available in a relatively short period of time. Since an immediate decision is made on request, the applicant quickly knows about his credit status. The decision to grant a loan is usually made within about an hour, which ultimately gave the loan its name. However, you should be patient for more than 24 hours when crediting the loan amount, because it can take two to three working days for the loan amount to be credited to the checking account.
The disadvantages of a 24 hour credit
A major disadvantage of the 24 hour credit often results from the fact that they are often occupied with relatively high interest rates. This is particularly the case if the 24 hour credit is granted as a loan without Credit Bureau. A cost comparison before signing a loan agreement is therefore essential. There may also be a cost trap in the additional fees and commissions incurred, especially for online loans.
If the 24 hour credit is not required as a Credit Bureau-free credit, it can always be very useful to request a loan from a bank or your own bank, since processing is very quick here, but the conditions are more favorable than those offered by providers 24 hours credit without Credit Bureau in the product portfolio.
Risks to avoid
Especially when it comes to Credit Bureau-free credit over the Internet, there are risks for applicants. The first contact is not made with the bank that lends, but instead through a credit intermediary. Credit intermediaries work with many banks and know the conditions that banks require for the loans.
Most credit brokers on the Internet do serious work, but not all. It may well be that a credit broker agrees to grant the 24-hour loan at short notice. At the same time, however, a request for payment of a commission is given to the applicant, without whose payment the processing of the loan application cannot take place, according to the agent. In this case, it is worth withdrawing from the application immediately and also not making any commission payments.
Reputable intermediaries receive their commissions from the banks that grant the loans. The cost of this will be charged to the applicant in connection with the loan. If a commission is requested to pay before the credit transaction is processed, the applicant can be sure that the fraud is being committed. After the payment of the supposed agency commission, the broker will not make any further contact and a credit transaction will not usually take place with such a settlement.