A cash loan does not mean that the amount of money is made available to the borrower as cash. Instead, the usual use of the term cash advance means that the loan amount is transferred to the borrower without any purpose limitation.
In a narrower sense, credit lines that can be used by the customer at any time, such as the overdraft facility or an on-call credit facility, are referred to as cash advances. In very few cases, lenders continue to use the term cash advance in the original meaning of cash payment of the loan amount, which is unusual. Before German financial institutions grant a cash loan, they always make a credit bureau request.
Loans without special credit bureau request
As with the credit card limit, the overdraft facility is not actually a credit bureau-free cash loan, but not every use is linked to a new credit bureau request. Anyone who has forfeited an impeccable credit bureau and a negative entry in the meantime can use the existing credit line again and again, since usually no new credit bureau information is obtained.
However, he should not make a request to increase the credit line, because in this case some banks make another credit bureau request. A pawn loan can also be regarded as a credit bureau-free cash loan, especially since the cash payment of the loan amount in the pawnshop is not uncommon.
Lite lender loans
In most cases, a credit bureau-free cash loan is applied for from a Lite lender bank. Since federal credit institutions are not members of the German credit bureau, they do not receive any information from them, so that they must inevitably grant their loans without a credit bureau request and cannot report the borrowing to the credit bureau either. The acceptance of a cash loan in Switzerland is however reported to the USD there. The Lite lender bank also carries out an inquiry there before lending, although there is usually no data available for borrowers from Germany, as they have never applied for a loan in Switzerland.
If Lite lender financial institutions offer their loans without credit bureau in Germany, they protect themselves from payment defaults through strict lending guidelines. For example, they require a significantly higher minimum wage than a German bank and, with the exception of a few institutes, do not grant loans to self-employed and freelancers. Limiting the age of borrowers to mostly fifty-five or fifty-eight also serves to prevent loan defaults, since older workers often retire early and have a correspondingly lower income.
The most important protection of Lite lender banks against defaults, however, is the limitation of the maximum possible loan amount to typically 3500 USD Currency risk for the credit customer.