In general, credit protection is used to minimize the risk of the lending company. Every creditor who does not want to bear a certain exposure risk has the opportunity to do so with credit protection. How does this happen? With the help of retention of title or del credere insurance, with the help of export credit insurance or even reinsurance. The uncertainty of the creditor (lender) is to be reduced to a minimum.
Securing a loan is necessary when the creditor recognizes a risk of not receiving his claim back and therefore requires a form of security from the debtor. The law specifies a few legal transactions as collateral from the nature of the legal transaction. It concludes: both the retention of title acc. Section 449 (1) BGB, the guarantee in accordance with § 765 Abs. 1 BGB, the mortgage acc. § 1113 BGB, as well as the lien according to. § 1204 BGB. In addition, loan collateral was developed over the course of time that (can) play a role in the drafting of the contract.
From a legal point of view, loan collateral is a right of lien on rights or on land, an assignment of claims, guarantees, joining a debt or even a transfer by way of security. The credit protection characterizes that the creditor is granted additional rights against the debtor in order to secure his claim. These are rights that are directed either against the debtor or against his assets; or the creditor can make use of third parties to assert his claim against the creditor.
Nowadays, most loan collateral comes from credit institutions. Credit institutions often only grant a certain loan with a corresponding credit protection, so they no longer rely solely on the repayment claim, but instead require a more in-depth, additional protection of their claim.
In Germany, there is no obligation for credit institutions to include credit collateral in the contract, or it is not determined when which collateral is to be provided, etc. appears too high. This is also the reason why the creditworthiness check decides on a case-by-case basis whether and which forms of credit security are accepted. The focus is on the usual bank collateral.
This term is not legally defined in the law, but the forms of security have the following common features: they may only be subject to a slight fluctuation in value during the term of the loan; it must be convertible into money quickly and without problems; it must not be contestable in an upcoming bankruptcy procedure. The following rights generally meet these criteria and should therefore be explained in more detail.
The liens on the register denote the liens with which it is possible to have them entered in a public register. These are used in particular for real estate loans, i.e. for long-term credit terms. These liens are then entered in the land register.
The guarantee is an everyday form of security that is designed to prevent the assets from being shifted at the expense of the respective creditor. The spouse guarantee, ie the guarantee of one spouse for the debts incurred by the other, is particularly common here; or also the guarantee of family members if there is insufficient creditworthiness, for example in the case of rental contracts to secure rental payments and / or security payments.
Here, the best known is the assignment of wages and salaries, which is contractually included in loan agreements with the help of the wage assignment clause. However, the assignment of wages is not insolvency-proof, so it is not a common form of credit security.