When banks grant loans, they naturally want to ensure that the borrower is able to repay the loan within the period agreed in writing without any problems.
Therefore, the banks always assess the creditworthiness of the customer and then decide on this basis whether the loan can be granted or not. But not only the general acceptance or rejection is based on the creditworthiness of the customer, but this is also decisive for whether the loan can be issued blank or only against collateral.
A special feature of the bank loan is that the bank grants a loan
In connection with a loan, blank means that the loan is granted without the bank taking collateral at the same time. Such loans are therefore referred to as blank loans and even appear relatively frequently in practice.
A special feature of the bank loan is that the bank grants a loan, but in return does not want to have any collateral such as a guarantee or a pledge. However, you can only get a blank loan if you have a very good credit rating as a loan seeker.
Good credit is particularly important if the customer has a good income and there are no negative facts in the Credit bureau. Nevertheless, it is by no means the case that, with good credit, each loan amount is automatically granted as a blank loan.
Real estate loan is a very atypical blank loan
Because relatively large loan amounts, for example, 200,000 USD in the course of real estate financing, are virtually never granted without the banks accepting sufficient security, as in this case a mortgage. So while the real estate loan is a very atypical blank loan, the disposition loan is on the other hand in credit, which is almost always given as a blank loan.
Because with the overdraft facility, the bank grants the credit limit in the checking account exclusively on the basis of existing income. While the overdraft facility is the classic blank credit, the often-used installment loan depends on various factors, whether the loan is granted as a blank credit or as a secured loan.
The most important factor here is certainly how the bank assesses the customer’s creditworthiness. The better this is, the more likely it is that the bank will be able to do without collateral.
However, it also depends on the amount of the loan. With a loan amount of, for example, 40,000 USD, the bank will certainly not want to rely solely on the creditworthiness of the customer and will completely forego collateral, so that with such loan amounts the granting of the loan as a bank loan is rather unlikely.