Dear steemit community

For some time now, banks have had to pay more attention than before to the personal creditworthiness of the customer when granting loans. An EU directive in particular has contributed to this, as it states that the lender should attach more importance to whether the creditworthiness of the loan seeker is able to pay the agreed loan installments. Since not all people who want to take out a loan have excellent credit ratings, equity and loan collateral are becoming more important. If equity is primarily important in the context of real estate financing, loan collateral can generally be used to increase the chance of a loan.

what collateral might also be of interest to you if you want to increase your chances of a positive credit decision.

Equity as indirect loan security for construction financing
Equity is not an official loan security, but can still be viewed indirectly as a security aspect. This plays a role almost exclusively in the private customer sector when it comes to real estate financing. And personal creditworthiness of the customer and not just to regard the mortgage as security, the equity can contribute to the lender making a positive credit decision. In the case of installment loans, on the other hand, the equity is not important, but with these types of loans it is particularly important that you can also provide collateral from a certain loan amount in order to increase the chance of a loan.

Current loan collateral at a glance
If you are of the opinion that your credit rating may not be quite sufficient for the bank to respond positively to your loan request, there may be a chance that you can provide one or the other security. Of course, credit institutions grant installment loans more easily if it is at least not entirely a blank loan, but part of the loan amount is secured by a loan security.

In the overview, it is in particular the following loan collateral on the market that is currently being used:

• Land charge/mortgage (only rarely)
• Assignment of security
• Assignment of claims
• Pledge of assets
• Pledge of securities
• Residual credit insurance
• Guarantee

Some of this loan security can be used universally, such as the assignment of claims or the pledging of credit. Other securities, on the other hand, are relatively specifically earmarked for the financing, such as the land charge or the security transfer.

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