Everything you need to know about borrowing money
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There are numerous ways to borrow money - whether from banks, online or from a pawn shop. But before you decide on one of these options, it is important to know exactly what requirements must be met, what documents you need and what specific benefits and risks are associated with each option. This article gives you a comprehensive overview of borrowing money.
What requirements do I have to meet to borrow money?
Before you can take out a loan in Austria, there are some essential requirements that you must fulfill:
Age of majority: The minimum age to take out a loan in Austria is 18. This ensures that you are legally able to sign contracts and enter into financial obligations.
Credit rating: Your creditworthiness is a decisive factor in the granting of a loan. In Austria, your creditworthiness is checked by the Kreditschutzverband von 1870 (KSV). This rating provides information on how reliably you have fulfilled your financial obligations in the past. A high credit rating improves your chances of obtaining a loan on good terms. Pawn loans are excluded from this, as in this case you are liable with your collateral.
Proof of income: Regular income is essential to prove your ability to repay. This includes payslips, tax statements or other proof of income. Banks want to make sure that you have sufficient funds to repay the loan without getting into financial difficulties. With a pawn loan, you put up your collateral as security, so in most cases no proof of income is required.
Residence in Austria: Many lenders require that you have a permanent residence in Austria. This serves to ensure legal traceability in the event of payment problems.
Bank account in Austria: You will need an Austrian bank account to pay out the loan and repay the monthly installments. This facilitates payment transactions between you and the lender. With a pawn loan, you can borrow and repay your money without an account.
What documents do I need?
To successfully apply for a loan in Austria, you should be prepared to provide various documents:
Photo identification: Your passport or ID card is required to prove your identity. This is a basic requirement for all credit institutions and online platforms.
Proof of income: As a rule, providers other than pawnshops require salary slips for the last three months. These documents show the lender that you have a stable income that is sufficient to repay the loan.
Bank statements: Banks and lenders often require bank statements for the last three months. These give them an overview of your financial transactions, regular income and any expenses that could affect your ability to repay.
Employment contract: An open-ended employment contract is particularly advantageous as it offers the lender additional security. If you are self-employed, tax statements or other proof of income may be required as an alternative.
Proof of creditworthiness: Although many banks carry out a KSV check themselves, it can be useful to have current proof of creditworthiness or credit reports to hand in order to be able to prove your creditworthiness directly.
Is it possible to borrow money without a KSV query?
Yes, it is possible to borrow money in Austria without making an inquiry with the Kreditschutzverband von 1870 (KSV). These options are often referred to as "loan without KSV" and are particularly useful if your credit rating is not optimal. These are often special credit offers provided by alternative lenders or peer-to-peer platforms.
Another way to get money without a KSV check is via pawnshops. CASHY, one of the leading pawnshops in Austria, offers you the opportunity to deposit collateral such as jewelry, electronics or designer bags as collateral and receive money immediately. As the pawned item serves as collateral, no credit check is necessary. This is particularly advantageous if you need money quickly and don't want to risk any impact on your credit rating.
The main difference between a traditional loan and a pawn loan is that a pawnshop does not involve a long-term commitment. If you are unable to repay the loan, the deposited item is simply auctioned off without affecting your credit rating. This makes the pawn loan a flexible and uncomplicated alternative if you want to get money quickly and without a credit check. You also remain debt-free.
What are the advantages of borrowing money online?
Online money lending is becoming increasingly popular in Austria as it offers numerous advantages:
Convenience: One of the biggest advantages is convenience. You can complete the entire loan process from home without having to visit a bank branch in person. This saves time and is especially useful if you have a busy schedule.
Speed: Online lending platforms often offer faster processing and pay out. In many cases, the money will be in your account within 24 to 48 hours. This aspect is particularly important if you need funds quickly, whether for an unexpected bill or an urgent purchase.
Transparency: Many online platforms offer user-friendly loan calculators that allow you to see exactly what costs you will incur. You can run through different loan amounts and terms and immediately see how these affect the monthly installments and the total cost of the loan.
Comparison options: You can easily compare different loan offers on the Internet. Websites such as durchblicker.at or smava.at offer comprehensive comparison options so that you can find the best offer for your needs.
Flexibility: Many online lenders offer flexible repayment options that can be adapted to your personal financial situation. This means that you can often determine the term and the amount of the monthly installments yourself.
How can I borrow money online?
Borrowing money online is easy and can be done in just a few steps:
Compare the offers: Use comparison portals such as durchblicker.at or smava.atto find the best loan offers. These portals allow you to filter different loan options according to interest rates, terms and conditions so that you can choose the best offer for you.
Fill out the application: Once you've decided on a loan, fill out the online application on the lender's website. This process is usually intuitive and guides you step by step through all the required information.
Upload documents: After completing the application, you will be asked to digitally upload the necessary documents, such as proof of income and a photo ID. Many platforms offer a simple upload function for this, which can also be used from a smartphone.
Verify your identity: Identity verification is necessary to ensure that no fraudulent applications are made. Many lenders offer video identification for this purpose, which can be carried out from the comfort of your own home.
Check the loan offer: After your documents have been checked, you will receive a loan offer that contains all the important conditions such as interest rate, term and monthly installment. If you are happy with the offer, you confirm it and the money is transferred to your account.
Depending on the provider, this process can be completed within a few hours to five days, so you can have the money you need quickly.
How much money can I borrow?
The amount of credit you can borrow depends on various factors:
Creditworthiness: Your credit rating, which is assessed by KSV, plays a decisive role in determining the maximum loan amount. A good credit rating means that you can borrow higher loan amounts at more favorable conditions.
Income: Your monthly net income is another important factor. Banks and lenders make sure that the monthly installments are in a reasonable proportion to your income to ensure that you can repay the loan without any problems.
Type of loan: The type of loan also influences the possible loan amount. Mini loans, which are often used for smaller, short-term financing, generally range from 100 to 1,500 euros. Consumer loans, which are intended for larger purchases or investments, can range from 5,000 to 75,000 euros or more. With pawn loans, the possible loan amount depends on the partial value of your item.
Pawnshops vs. online loans: a detailed comparison
Criterion | Pawnshop (e.g. CASHY) | Online loan |
|---|---|---|
Credit check | No credit check by KSV | KSV query often required |
Security | Pledged object as collateral | No security, but creditworthiness is important |
Payout period | Immediate pay out upon deposit of the pledge | Usually 24-48 hours |
Interest | Higher interest rates possible depending on pledge value | Lower interest rates with a good credit rating |
Repayment modalities | Fixed deadlines with possibility of extension, otherwise auction of the pledge | Flexible repayment plans possible |
Maximum loan amount | Depending on the value of the pledged item | Depending on income and creditworthiness |
What advantages do pawn shops like CASHY offer?
Pawn shops like CASHY offer you a quick and easy way to borrow money without putting a strain on your credit rating. This option is particularly advantageous if you need money at short notice and have valuable items that you can deposit as collateral. Here are some of the key benefits:
No credit check: As the pledged item serves as collateral, no credit check by KSV is required. This is ideal if you have a low credit rating or would like to avoid such a check.
Immediate pay out: Once you've deposited your pawned item with CASHY, you'll receive the money immediately. This process usually only takes a few minutes, making it one of the fastest ways to get cash.
Flexible pawn items: With CASHY, you can deposit a variety of valuables as collateral, including jewelry, electronics, luxury watches or designer bags. The amount of the loan depends on the estimated value of the pledged item.
No risk to your credit rating: As there is no credit check, a pawn loan has no impact on your KSV rating. Even if you are unable to repay the loan, your credit rating remains unaffected as the pledged item is simply auctioned off. Any surplus will also be paid out to you minus fees.
Fixed repayment terms: The repayment terms are clearly defined. You know from the outset how long you have to repay the loan and what happens if you are unable to make the repayment. However, you can also use your online account to extend the loan or make a partial repayment at any time.
A pawn loan is an excellent option if you need money quickly and easily and are willing to put up collateral. Although the fees are higher due to the risk for the pawnshop, pawn loans are often a good alternative to a classic bank loan for short-term bridging.
Conclusion
Borrowing money is an important financial decision where you should carefully consider all available options. Whether you opt for a traditional bank loan, an online loan or a pawn loan from a provider such as CASHY depends on your individual needs and financial situation. You could also ask friends or relatives if anyone is willing to lend you money.
Online loans offer you the advantage of convenience, speed and flexibility, while pawn shops like CASHY offer you a quick and unbureaucratic way to get money without a credit check. It's important to check the terms carefully and make sure you can meet the repayment terms to avoid financial problems.