Rating and Credit Approval Process
To minimize the effect of a loan default, CreditGate24 utilizes risk-pooling by way of a solidarity arrangement. This method allows investors to achieve maximum possible risk diversification, without having to invest in numerous of credit projects. Despite the security measures we employ, a default is still possible and recovering your investment may prove to be unsuccessful. If a borrower defaults on a loan, the loss will be allocated proportionally to all investors in the same rating grade. This means that each individual investor is minimally affected by a loan default, and the expected return can be best possible secured. Nonetheless, CreditGate24 recommends that investors invest in various credit projects because while one automatically participates in the solidarity arrangement by virtue of being an investor, it can take a couple of weeks to receive the solidarity surcharge. This is why CreditGate24 presents both a base return and an additional return; the additional return refers to the expected deduction in the event of a loan default. In general, for rating levels of AAA (SME and Private), the expected loss by collateral is close to 0%. Nevertheless, CreditGate24 cannot guarantee returns or prevent any loan defaults. However, CreditGate24 makes every effort to make our users’ experience a positive one.
In case of death, the residual debt balance (up to CHF 100'000) is ensured by Generali for all rating categories and will not be transferred to the heirs.
Besides utilizing data from internal and external suppliers for credit standings, CreditGate24 uses information of enforcement, Big Data Analytics, social media, research, and specific clarifications regarding the borrowers.