A blank credit is a form of borrowing money without collateral. A collateral is a collateral that you provide to the lender in the unlikely event that you cannot repay the loan. The best-known example of this is a mortgage loan, where you specify the house as collateral. If you cannot repay the mortgage, the bank can sell the house in order to get the loan repaid. With a blank credit you do not have to provide security when you take out a loan.
Blank credit or borrowing with collateral
A consumer credit is often a blank credit. Think of a personal loan or revolving credit, but also be in the red on your checking account. Because you do not provide the bank with security in the form of collateral, you pay more interest than when you take out a loan with collateral.
You cannot always choose for yourself whether you take out a blank credit or a loan with collateral. In principle, a personal loan or revolving credit is always a blank credit and a mortgage a loan with collateral. If you want something different than the regular offer, ask different banks what the options are.
The advantage of borrowing with collateral is that you have to pay less interest, but on the other hand you can lose the collateral if you cannot repay the loan. For example, the bank may seize your home if you do not pay the mortgage on time.
Take out a blank credit
If you want to apply for a loan, you will often have to deal with a blank loan. Whichever loan form you choose. So if you want to take out a loan, it is best to start by choosing the desired loan type for your loan target. If you know which loan you want, you can compare the loans.
Compare loans not only on the interest that you have to pay, but also on other conditions that apply to the loan. Whether the loan is a blank credit or not is one of the conditions that are important to your choice. But the repayment period is also important, as is what happens with the debts in the event of death.
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