Consumers have a good time looking for a loan today. Not only branch banks offer loans, but also the numerous online banks. Meanwhile, it has become clear that the offerings differ significantly. Sometimes the banks require the completion of a residual debt insurance. Without this there is no loan approval. However, those who study the offers carefully will also find a loan without residual debt insurance.
What is a residual debt insurance?
A residual debt insurance to protect the borrower and his family. It is possible to safeguard the death, a sickness and unemployment. The more hedged, the more expensive the residual debt insurance and therefore also the credit. The contribution for this insurance is added to the loan amount, which makes a loan more expensive. The conclusion of such insurance should therefore be well considered. If the bank insists, then you should look for another loan without debt insurance.
However, a residual debt insurance should not be vilified. There may be enough reasons for a degree. In the case of high loan amounts, it is in any case recommended that this loan be secured in any way. Particularly important is a hedge of a real estate loan. Here are completely different loan amounts estimated and it makes sense to hedge such a loan.
No compulsion to take out a residual debt insurance
The bank can not force a customer to take out a residual debt insurance. If the customer refuses, it may happen that the bank refuses to lend. Fortunately, there are plenty of banks that offer a loan without residual debt insurance. These can be found on the comparison calculator that exists on the Internet. Banks always want collateral. But they can also be brought in a different form. Luxury cars, real estate or life insurance that would cover the loan are popular collateral. With such options, the banks do not require any residual debt insurance at all.
The advantages and disadvantages of the residual debt insurance
– Securing the loan amount in case of accident, illness, death or unemployment
– The insured have a worldwide protection
– No health check is required. For older people, the premium increases
– The loan amount is increased by the conclusion of a residual debt insurance
– Not worth it for small loans
– The borrowers have no means of comparison, as the banks already cooperate with insurance companies
However, the advantages and disadvantages should not obscure the fact that such insurance can certainly be appropriate. If the borrower wants that, she will jump in if she is unemployed. Thus, it secures the existence of the borrower. The best example is real estate loans. The term is at least ten years. During this time, the borrower can become unemployed and get along with less money. If he has now completed a loan without residual debt insurance, he looks in the tube. If the installments for the real estate loan are no longer paid, the house will be auctioned as a consequence. The borrower and his family then have to look for a new place to stay.
If the bank grants the loan without residual debt insurance, then it is up to the borrower to decide whether or not to conclude one. It is not worth it for mini loans or small loans. If the loan amount is high, then it makes sense. It is then a calculation example, whether a risk life insurance would be cheaper.