A borrower is a natural or legal person who has undertaken to repay another person (the lender) a financial loan according to agreed terms, including agreed remuneration (interest). The word ‘borrower’ is often perceived negatively by the public, but if the borrower repays his or her financial obligations properly and on time, there is no reason to do so. When a debtor stops paying his/her obligations, he/she becomes a defaulter.
Before granting a loan, banks are interested in your payment history and any outstanding debts. Domestic banks can consult several registers, namely the Non-Bank Register of Client Information (NRKI), the Bank Register of Client Information (BRKI), the SOLUS register and the Central Register of Executions.
Positive entry in the register
The registers are used by banks and non-banking companies to establish creditworthiness and determine the credibility of a prospective borrower. The mere entry in the register is not automatically bad – it is necessary to distinguish between positive and negative entries. A positive record is indicative of the credit seeker’s good credit standing. On the basis of a positive record, the bank may, for example, offer the loan applicant a better interest rate.