Anyone who wants to take out a loan or a loan from a bank is usually asked what collateral or collateral he can provide. These are made available to the bank and influence the lending rate decisively. Particularly suitable are real estate or the assignment of property rights.
Real estate as collateral
The most stable assets are usually real estate. Often, the loans are used to finance the construction or purchase of real estate. As the real estate can not be deposited with the bank as collateral, the real property is encumbered with rights for the lender. For example, the bank will receive a prerogative in case of a possible auction of a property in order to hedge the repayment of the loan granted.
The most common security rights here are the mortgage and the mortgage. In the case of a mortgage, a loan is secured by the registration of a mortgage in the land register linked to the land. This mortgage remains registered even if the property is already fully paid off. The removal of the mortgage must be requested separately.
The advantage of these land rights is that they can be used over and over again, even if the loan has already been repaid. This means that if a mortgage of € 20,000 is registered and remains, it can be used again and again as collateral. Since real estate is very stable in value, banks gladly accept these as loan collateral. However, deductions are made. That is, the depreciation of a house or apartment is considered by the banks and calculated at about 1% of the value per year.
Property rights as collateral
A frequent loan security in the search for credit is the assignment or pledging of property rights. For example, the rights to life and pension insurance fall under property rights. On the other hand, the term is often used in connection with securities, ie shares.
Particularly noteworthy here is the assignment of surrender values of life insurance. These surrender values are available to the lender after the assignment. The repurchase values have the advantage that they increase steadily with regular premium payments and thus become more valuable.
But other securities or savings deposits can serve as collateral. This is usually done by pledging them to the lender. The sole lender has the sole right of exploitation. If savings deposits or fixed income bonds are stable in value, equities may vary in their value.
Guarantee as collateral
If real estate and property rights are insufficient to secure a loan, the guarantee by a third party is another option. There are different types of guarantee.
- Either the guarantor completely takes over the responsibility, so in case of insolvency of the borrower alone has to pay the outstanding installments.
- Another option is the so-called partial guarantee. Here, the guarantor is liable only for a predetermined portion of the borrowed credit.
Gold as collateral
Precious metals as a security for loans are rather unusual nowadays, since the storage and valuation of the physically existing valuables is too costly. Possible is a so-called goldymight, in which gold, silver and Co. are pledged as collateral. The mortgage lending value is a maximum of 80 percent of the actual value. It should be noted that, especially for coins, the collector value is often higher, so that a sale can be worthwhile than the loan.