Taking out loan despite having existing debts
Existing debts are not a compelling reason not to borrow more, but they make it more difficult. The credit information contains data about any irregularities in financial matters, but also information about loans that are already in progress. The credit information does not include data on the current use of granted credit lines. Borrowing from a bank offers an alternative to domestic loans if the debt already exists.
The bank is not aware of the existing debts
Since financial institutions process loans without credit, it is easy to take out a loan despite debts from the country. The banks assess the creditworthiness of their customers primarily on the basis of their fixed income from their main job and generally assume that the lending is higher than the seizure allowance. In general, banks do not take additional income and child benefit into account when determining income.
The federal credit institution makes a routine request to the USD, but the corresponding information only contains data from credit agreements concluded in the country and is irrelevant for applicants. The loan in spite of debts from the country is not processed as a foreign currency loan, but in euros and therefore does not lead to any exchange rate risk.
Check the ability to pay back yourself
As the bank does not obtain credit information, it cannot check whether the applicant has to service further loan contracts despite a debt from the country. Therefore, there is no need to fear loan rejections due to the fact that the total monthly payments are too high in connection with the existing liabilities. However, the borrower must check for himself whether he can repay the previous loans and the installments for the new loan as agreed, despite his debts from the country.
Incorrect servicing of a federal loan, as a result of the data collected by the USD, means that subsequent loan applications made in the country are rejected. In addition, if the installment is not paid on time, in addition to the risk of higher interest on arrears, there is a high probability that the federal lender will request a garnishment of wages.