Author Archives: Dwight Wilson

Good Credit History Saves Your Car

A snapshot of your credit history can cost as much as a new car or home repair. According to estimates from the Good Finance Institute of Personal Finance, the mortgage interest paid by a person with a poor personal credit rating over the entire period may be as high as $ 40,000. higher than those that have maintained good credit history.

According to Odeta Bložienė, Head of the Good Finance Institute of Personal Finance, although credit history provides tangible financial benefits and is at least as important as customer income in assessing creditworthiness, Lithuanians still do not attach sufficient importance to it. The statistics also show that last year the number of persons who overdue their debts increased every year in all municipalities, leaving no one with a lower than average salary. In addition, in some municipalities, the average overdue debt is close to 50 thousand.

It is often mistaken

It is often mistaken

To think that credit history only concerns those who already have a loan. In fact, it is most relevant only to those who intend to borrow. Credit history demonstrates the ability of a person to manage their money, their cash flow, meet their obligations or pay for services on time, and is therefore one of the most important criteria when deciding whether to grant a credit. Meanwhile, a bad credit history increases the risk that the borrower will not repay the loan under the terms and conditions, which is likely to affect higher interest rates, shorter loan repayment periods or a negative creditor response, ”commented Bložienė.

Anatoly Kisiel, a lawyer with the Good Finance credit bureau, notes that for residents, credit history is often associated with credit installments. “People forget that credit history even covers covered debt for electricity, telecommunications, internet, cable and many other services. The consequences are caused even by seemingly small debts, and sometimes a couple of years ago. For example, in some cases, a bad credit history may result in the loss of the ability to enter into a communications service contract, rewrite an Internet contract on your behalf, or purchase a television by leasing, ”says Kisiel.

Credit history can become one of the most important factors

Credit history can become one of the most important factors

Determining the interest rate on a home loan. Good Finance’s Institute of Personal Finance estimates that 200,000 people will be unemployed. The interest paid by a person who has taken a home loan for thirty years over the loan period may vary by as much as $ 30 or $ 40, depending on whether their credit history is good or bad. litas. More or less the cost of a new car or home repair. In addition, credit history is also significant when borrowing smaller amounts, such as buying a car. A person who has a good credit history for $ 25,000 $ 5,000 less interest than a person with a bad personal credit rating.

Meanwhile, young people should not only care about their credit history, not only about the possibility of borrowing a home or car in the future but also about continuing their studies. The State Studies Foundation refuses to grant a government-sponsored student loan if the liabilities were not properly discharged. However, according to Good Finance, more than 10% are currently in business. students are not properly fulfilling their financial obligations.

Credit history should not be ignored

Credit history should not be ignored

Even with financial obligations. ‘Where the borrower decides to transfer the loan to another financial institution for better conditions, or upon request to change certain conditions as a payment method or period, the individual’s financial situation and solvency shall be reassessed. At the same time, credit history data is updated, so if a person’s credit rating deteriorates, the loan terms will change accordingly, ”explained the head of the Institute of Personal Finance.

“It is clear that a good credit history opens up more opportunities and lowers borrowing. So how do you have one? First of all, I would advise you to look at it and review your credit history report at least once a year. Debts sometimes arise through yawning. And, as the bank’s analysis has shown, the interest paid for this inattention could be $ 40,000. It is also important not to over-commit and over-commit, and under no circumstances to cover one loan over another. In the event of difficulties in settling, one should not panic, but rather cooperate with creditors and establish a mutually beneficial settlement schedule, ”explains Mr Kisiel.

Bad credit payday loans -Get up to $1000 with an online payday loan for bad credit

This year, the family will spend an average of USD 720 on Christmas. However, not every family has gathered the middle for this purpose. Where is the best borrowing for the holidays?

We have a fairly large selection. We can choose a payday loan, bank or loan from family or friends. It depends only on us what we decide. I do not hide that in my opinion, the best choice is a fast online loan. There is a huge selection of payday loans on the market and everyone can find the right offer. Especially since the loan company can repay the loan at any time during the contract, without incurring any additional costs.

Get up to $1000 with an online payday loan for bad credit

Why can an online loan be better than a bank loan?

Availability has been one of the reasons for years: online payday loans for bad credit from GreenStart are quick and convenient. We don’t have to go to the branch of the loan company, we don’t have to queue for hours at the bank. Online loans are safe. And definitely cheaper. We can reach for them anywhere, anytime. All you need is a computer, tablet or phone and Internet access.

What to consider when choosing a loan company?

Credible loan companies can be found on the list of the Association of Loan Institutions. We can also check reviews on the Internet, although remember that often comments leave unfair competition. A lot about the company will tell us the certificates it has. The Reliable Company Certificate or Loan Institution of the Year are important awards – not all companies receive them. Let’s check if the company uses website security certificates: whether our data is protected by an SSL certificate. When choosing a company, let’s pay attention to how much time the company operates on the market. The most reliable companies have been on the market for several to several years. Let me remind you that from January 2018 each loan company will be registered by the Financial Supervision Authority. In addition, on May 25, 2018, the new ordinance will apply. GDPR, i.e. a regulation on the protection of personal data that will increase the security of customer data.

Should people be afraid of payday loans? What do you pay for with such a loan?

The first loan for free is granted without any commission and interest is not subject to repayment of interest only if it is repaid on time. On the other hand, subsequent loans are payable, although they should not exceed the maximum amount of non-interest loan costs in accordance with the Consumer Credit Act of March 11, 2016. For example, with a loan of USD 1,000 The cost of the loan for USD 12 months will be a maximum of USD 550 (i.e. 55% of the loan amount per year). So even cheaper than at the bank. It is also worth noting that, unlike a credit card, a free loan is not burdened with any fees or commissions.

Do you think there is a risk with the payday loans that you will have to pay back the amount borrowed several times after Christmas?

Do you think there is a risk with the payday loans that you will have to pay back the amount borrowed several times after Christmas?

Patches of “expensive” and “with hidden costs” have been glued to quick online loans. But will we get a loan on better terms? Not necessarily. I will give an example of the proven domain, which has been on the market for over three years and offers the first loan up to USD 3,000 for USD 0, i.e. the client borrows 3000 USD and gives the same amount on time. It’s hard to find a better offer on the market.

How do the verification of the client and his income with online loans look like?

A reliable loan company will never get you to borrow more than you need. She is interested in minimizing the phenomenon of redirection. The cash limit that a customer can borrow is set mainly on the basis of credit history, meticulous analysis of consumer data and history of earlier repayments of liabilities. The companies use Big Data to verify customers: financial scoring, use BIK and BIGs. They process a lot of different customer information to see if they can pay back the debt.

Debt loans! When is debt restructuring useful?

Lately you have heard more and more that you should reschedule your loans, but does that really make sense? Of course, there is also the question of what exactly debt rescheduling is and how it can help.

One can easily explain the debt rescheduling. The lender is simply changed and money can be saved. The interest rate level of the loan is therefore kept as low as possible. Debt restructuring can be very useful, especially for bank customers, because interest rates are extremely high. In this case, debt rescheduling is a good option and reduces costs.

 

When is debt restructuring useful?

debt restructuring

Debt rescheduling is the replacement of the current loan with a new loan. At first that sounds pretty complicated, but it is actually very simple. This measure will pay off especially for borrowers if the new interest rate is significantly lower than the previous interest rate.

The greater the difference between the old and new loan, the greater the savings on debt restructuring. As a rule of thumb, you can remember: the greater the remaining debt and term of the loan, the more worthwhile it is to reschedule the old loan to a new provider. Debt rescheduling can also be useful if you have multiple small loans and want to combine them into one large loan. In the same way, rescheduling is advantageous if your own overdraft facility is used permanently, but the overdraft facility interest is higher than the interest on the installment loan.

 

Debt Loans – A Small Example

Debt Loans - A Small Example

The debt rescheduling will definitely pay off. Here is a small example. If a consumer took out a loan of $ 10,000 with an effective annual interest rate of 9.0 percent and a term of 60 months in 2012, you can carry out a debt rescheduling. With new financing, a residual debt of 5.5 percent and savings of up to 238 dollars are possible. Interest savings are even greater if the loan has a larger amount. So if you took out a loan of 20,000 dollars two years ago, the current interest rate will be replaced by an effective interest rate of 5.5 percent. Thus, the interest payments are reduced by an impressive 496 dollars.

 

How does debt rescheduling work?

debt loan

If you already have a loan, you should check the current interest rate. It is equally important whether the interest rate is variable or fixed. In general, variable interest rates adjust independently in the event of changes. This is not the case with a fixed interest rate. Borrowers with fixed-rate agreements should therefore contact their house bank and negotiate with it. In some cases you can achieve better conditions without having to repay loans.

You must also keep an eye on the deadline for rescheduling. In principle, current loans can be canceled at any time after a three-month notice period. However, the earliest date is six months after the loan has been paid out. When changing to a new bank, the new bank usually takes out the termination of the old loan. If this is not the case, you have to take over the termination yourself. Simply inform in advance whether the new bank would carry out the termination.

 

When is debt restructuring not a solution?

debt loan

Of course, rescheduling can help in many areas, but this is not always a good option. If you are already completely overwhelmed with the current loan or the respective loan has even been canceled or due, then rescheduling does not make much sense anymore, Also, rescheduling will not help you if you already have a negative Schufa entry. Often, you will then no longer be granted any loans and therefore you will not be able to use the services.

Buy a car and resort to a financial yes or no? – Request a loan

When it is time to change cars and once the model, power and other features have been decided, the next step is to choose the payment method. Currently, in Spain you can do it in 3 different ways: paying the full amount in hand or requesting a loan, either to the financial one of the dealership where you buy the car or to a bank.

Find a lender to finance your new car

Find a lender to finance your new car

Since the majority of people who buy a car cannot pay cash, since it involves disbursing a large amount of money at once, the most chosen method is financing. However, this raises the dilemma of doing so with the bank or with the concessionaire’s own finances.

Both options will make it easier for you to access a car with a price, that if you had to make the payment in hand, it would be quite difficult. Therefore, before choosing one or the other it is best to know the pros and cons of each one, make numbers and once you have everything clear, tell you which one offers you the best conditions.

Variables that influence the final price

car loan

As in any other loan, whatever type, you have to know that there are a number of variables that directly affect the total that you will have to pay back and that you have to take into account whenever you seek the financing of a third party to acquire a good.

Once you have them clear, there is no more to make accounts so that you have no doubts about how they will affect the total amount owed.

What is a Nominal Interest Rate (TIN)?

car loan

TIN: The Nominal Interest Rate (TIN) reflects the cost of financing, that is, what the bank charges for performing the operation and lending the money.

What is aAnnual Equivalent Rate (APR)?

What is aAnnual Equivalent Rate (APR)?

APR: Annual Equivalent Rate (APR) in addition to the cost of financing, it also has other expenses, such as:

  • Commissions: Commissions are included in the APR. These are the expenses that come from the opening, cancellation or study prior to the granting of the loan.
  • Related products: In some cases, it is mandatory to hire other products for the bank or financial institution to grant the loan. An example of these products is the default insurance.
  • Return term: The return period is also very important, since the shorter the return time, the less interest it will charge.

Home loan comparison – loan for apartment.

If you are thinking of buying or building a property, you are also thinking about financing. This is usually done through a real estate loan, also known as a home or house loan. This form of credit is designed for a long term and usually also results in a hedge through an entry in the land register. But what actually happens when the property has already been paid for and there are major renovations?

These can also be very expensive and often cannot be realized without a loan. However, this is not a real estate loan, but a residential loan. This special form of credit has been devised precisely for these cases. The conditions differ from those of the house loan and a land register entry is also not provided here.

Loan amount and term are significantly shorter

Loan amount and term are significantly shorter

A home loan is intended to help property owners to carry out necessary work on their own house. In contrast to a real estate loan, the interest rates are somewhat higher here, but there are no other costs. Since no entry in the land register is required, the fees due for this are also not payable.

Furthermore, it is not necessary to deal with the matter through a notary. These costs, which are not insignificant, are therefore saved with a home loan. However, there are a few things to consider when applying for a home loan. The approval is thus based on a number of conditions that are not all that different from those of other loans.

The borrower must first be of legal age and have a sufficient regular income. In addition, it is imperative that the borrower have a permanent residence in Germany. If you want to take advantage of the special benefits of a home loan, you must also prove that you own a property for which the loan is ultimately to be used.

Find the right decision with a comparison

Find the right decision with a comparison

There are various options for homeowners when looking for the right home loan. In this regard, he can simply go to his house bank and get intensive advice on this topic. However, this advice is then only focused on the bank’s product and the borrower lacks the comparative offers.

However, there is the possibility to compare residential loans from different providers on the Internet. For this purpose, different comparison portals are available to the homeowner. Here the different conditions of the individual providers are compared and you get an overview of the housing loans from different providers.

First of all, attention should be paid to where the decisive differences can be found. It may well be that the borrower does not have to specify a purpose if he has proven his property ownership. The home loan could also be used for other things that are not related to the property.

Compare, decide and conclude a contract

Compare, decide and conclude a contract

A few principles should also be observed when using comparison portals on the Internet. So it is imperative that you always use several comparison portals so that you get a really meaningful result. Since there is no portal that really compares all providers with one another, no portal alone can provide an overview.

As a rule, the biggest competitors on these portals avoid each other in order not to do badly in a comparison. So it is inevitable to compare the results of several comparison portals. With the offers, you should also pay attention to whether the residential loan is equipped with additional services. This can be not only special repayments but also a break in installments.

With such little extras, the housing loan can be provided with flexible planning. This naturally gives the borrowers a lot of leeway, which enables them to react accordingly in special situations. For this reason too, a home loan is a clever alternative for homeowners that should not go unused.

Loan broker – how can he help you?

The advantages of using loan brokers when looking for financing are many and very helpful. If you are looking for financing for yourself or your current or future company, you may notice that many benefits are associated with the help of a loan broker company. By having a broker on your side, you can increase your chances of finding the best terms and rates, put into professional hands general transaction management and use the skills that these brokers acquired many years ago.

 

Best conditions and prices

loan broker

The chances are that you only know a few banks that you want to go for for a private or business loan. Most of them are local and are in your area. The problem is how do you know that you are getting the best deal that you can get. Or if your local bank refuses to finance it, what options do you have after this event? By using the borrower’s brokerage or quick online loan services offered at superkasa.pl you will have the chance to present a financing application to a wide range of lenders and this will present you with the best possible offers. If you are refused financing from your local bank, the loan broker can often find quite a few alternative types of lenders who will consider financing the loan.

 

General contract management

money loan

Not only is the matter that loan brokers can help everyone find financing that needs to be matched to themselves or their company, but they can also help everyone find a way to manage their contracts most effectively. This means that you don’t have to make or download so many phone calls, and the documents prepared by professionals will be 100% reliable and checked. By hiring help, you can focus on the things you do everyday to earn, and loan brokers can focus on managing the deal they are looking for.

 

Use the experience and objectivity of the loan broker!

Use the experience and objectivity of the loan broker!

Although this may be the first time you took part – when it comes to personal financing or business financing, financial intermediaries will have experience in many other transactions, which can be very, very helpful for you in this context. This means that they can help you determine what options are best for you and answer any questions you may have. The more experience a loan broker has, the more likely he is to find a financial situation and a loan option that may be best for you. The broker can also offer objectivity in the whole case, because agents are always third parties in the concluded transactions.

Brokers – regardless of whether you are dealing with business or personal loans can help. They are irreplaceable support in many different types of loans. Regardless of whether you want to expand your current company or buy a new one, or help yourself in a home urgent financial situation – you can be more confident in this process with the help of a broker.

Loan or payday loan – when to choose a bank loan and when to get a quick loan?

Credit? Payday loans? Which of these options is better? It depends on the situation we are in and our specific needs and expectations.

Ease of receiving money

Ease of receiving money

Unlike loan companies, banks are public trust institutions and their operation is strictly regulated by banking law. Hence, they cannot grant loans to people who may have a problem with repayment. First they need to verify and assess the customer’s creditworthiness. Therefore, granting a loan takes more time than taking a payday loan.

Repayment Time

Repayment Time

One of the basic differences between a loan and payday loan is the repayment time. As for the payday loan, the name itself clearly tells us that it is a short-term financial commitment. Most often, the full amount should be repaid within 30 days of receiving the money. In some cases it is 60 days, but this is the maximum period.

Credit is a long-term commitment – it can be taken not only for many months, but even for years. The repayment is divided into installments, in contrast to the payday loan, the amount of which must be paid in full at once. This means that credit can be a better option for those who are afraid that they might have problems paying back payday loans. Repayment more stretched in time and spread over installments can certainly be an easier and safer option for many.

Small Amount

Amount of Amount

How much can you borrow? Taking a payday loan, we can usually borrow a relatively small amount, usually in the range of 3000-7000 USD. That’s what such loans are based on – we borrow small amounts for a short period of time. The loan gives much more possibilities in this respect. It can be granted for up to USD 200,000.

Therefore, if we need a larger amount, payday pay will not be a good solution. Credit is a better option if you are planning a large investment.

Expense

Expense

In the case of loans and credits, we must not only repay the entire amount granted to us, but also make additional payments. Banks and loan companies want to earn money. Everything that we will have to pay except the loan or credit amount itself, and therefore interest and commissions, among others, are the costs. Due to the short repayment time, they are higher in the case of payday loans.

However, the differences in costs are not as great as they used to be. Payday loans are lower than just a few years ago. This is because of the new regulations governing the rules for granting loans. Certain limits have been imposed on interest and commissions, so loan companies cannot screw prices unlimitedly at their own discretion. This means that payday loans and loans are now more similar in price.

In addition, payday loans can be profitable in one respect. Some lenders offer the first loan for free. This means that if we take a payday loan from a borrower for the first time, we will only have to pay back the amount borrowed, with no additional fees. Of course, taking more payday loans from the same borrower, we will have to bear some costs.

How do you get a mortgage at low income?

For many people, owning a flat or house is an unfulfilled dream, sometimes the mortgage option becomes unreachable because of too low income. What to do to get a mortgage earning little?

How much do you have to earn to get a mortgage?

How much do you have to earn to get a mortgage?

The sums of our monthly salary directly affect creditworthiness in the eyes of the financial institution. The bank offer of housing loans does not impose the requirement of multiple earnings, a lot depends on what real estate we want to buy, in which region of Poland, the location of the house or flat is also important.

If we are trying to finance real estate in large agglomerations, in the city center we have to earn much more than when we want to buy our future nest in small towns. Currently, with a net income of USD 2,000 a month, we can count on a USD 160,000 mortgage, earning around USD 4,000 net we will receive about USD 300,000 .

The amount of mortgage that we can receive depends largely on our income. However, the bank always takes into account the whole of our situation, even at minimal rates we can apply for a mortgage.

What can you do to improve your credit standing?

What can you do to improve your credit standing?

When we earn little and want to increase the chance of dream four corners, we need to improve our credit standing. For the bank, a stable financial situation of the future borrower is important, the basis of income is of great importance. It’s good to think about it and try to negotiate with the employer a form of employment in the form of an employment contract, preferably for an indefinite period, low wages will compensate for regular and regular income.

Before applying for a mortgage, it is also worth taking up additional work to support your home budget. When applying for a loan for an apartment, you should opt out of credit cards and limits granted on your personal account. Earning little you also have to minimize expenses, because the bank always checks what amounts we spend on monthly maintenance.

How to get a mortgage earning little?

How to get a mortgage earning little?

Having a loan against real estate in perspective, it is good to pay off all debts so far and settle financial obligations. A positive credit history is always a big advantage in the eyes of the bank.

A good solution is to take out a mortgage with a high creditworthiness, it’s good to look for a trusted person who will agree to vouch for the commitment. You can also consider a loan for a house or flat with a co-borrower, it is good if you have high creditworthiness, in which case it significantly increases our chances for the necessary funds.

It is also worth starting negotiations with the bank and applying for a maximum loan period, which may be 35 years, which will reduce the amount of monthly mortgage installments.

How much credit do I get?

Nowadays, most major purchases are financed by a loan. How much credit the individual gets depends on various criteria. First and foremost, it’s about what the loan should be used for. We a normal consumer loan apply different criteria than for the car purchase or possibly real estate financing.

Banks or savings banks must ensure that the borrower is able to repay loan installments and interest over the entire term. The higher the credit, the higher the security requirement.

Which factors influence the loan amount and who gets a loan?

Which factors influence the loan amount and who gets a loan?

The banks always check in individual cases how much a borrower is able to raise for the installments. The income must be in a healthy relationship to the expenditure and the capital still available. Before applying for a loan, everyone can use a household account to determine in advance how much capital will remain from their salary after deducting all expenses. There must still be enough scope here for the desired credit rate.

Those who have an income below the statutory garnishment limit have little chance of getting a loan at all. The amount of income is in any case decisive for the decision on the amount of the loan to be granted. Those who have items that can be attached in an emergency improve the chances and the amount of their credit line. This is the case for real estate loans right from the start, because here the bank has the real estate as security. The same applies to car loans.

The preferred group of banks when it comes to lending is workers, white-collar workers and civil servants. Since these generally have a secure income, there is a low risk of payment. The situation is somewhat different for those who can not prove a permanent employment relationship.

These are self-employed, housewives, freelancers, trainees, students, unemployed or Good Lender recipients. This group finds it particularly difficult to prove creditworthiness at banks. In general, only other collateral helps, such as assets, real estate or a surety.

Examples of the different types of loans

Examples of the different types of loans

For a consumer credit that is freely available, the banks require a regular income and a credit check from Credit bureau, where they have no other security. However, a second borrower significantly increases the chances of getting a loan. This also has a major impact on the amount of the loan.

The car loan is a dedicated loan and therefore provides greater security for the banks. That is why people also get a car loan who might not get a consumer loan. Here the bank still has the vehicle as security. The car only becomes the property of the buyer when the loan has been repaid in full. This is how long the bank keeps the vehicle registration.

The situation is similar with real estate loans. Here, too, the bank has the property as collateral, but this is about slightly higher amounts and therefore similar standards are used as for consumer credit. Here, too, the question arises: “How much credit do I get with my salary?” The question cannot be answered in general.

This can only happen after the documents have been checked. This includes proof of income, Credit bureau information and the financing requirements for the property. The willingness to take out a mortgage or mortgage also helps to increase the loan amount. But be careful not to overestimate it, because real estate loans generally have a long term and there must be enough left to live on.

Consumer credit | Where to borrow

A new kitchen, a new bedroom or a new car: Although all these things are necessary, they can sometimes cost a lot of money. Money that many consumers simply cannot save, which is why they finance these things and much more through a consumer loan, also known as a consumer loan.

Where do you get a consumer loan

Where do you get a consumer loan

There are different ways for consumers to get such a loan. The option with the least effort is the conclusion of financing directly from the dealer. The latter does not finance the amount himself, but usually works with a bank, which then makes the loan amount available. The consumer only has to prove his liquidity; further activities on his part are not required.

Note:
This is different with a house bank loan. Here the consumer has to ask for a loan in advance of his financing and can only make his purchase when the loan is approved. This can cost valuable time, so that quite a few consumers take out loan financing directly from the dealer. And this in the knowledge that such a loan is often more expensive than with the house bank, but certainly more expensive than with direct providers on the Internet.

How does the application for consumer credit work?

How does the application for consumer credit work?

Whatever the decision of the consumer for their consumer credit looks like, the procedure from the application to the payment of money is essentially always the same. Because the banks do not give their money without appropriate security. And this credit protection for consumer loans looks so that the borrowers are liable for the loan with their available net income.

It is not so important for securing the loan whether there are one or two borrowers, as is the case with spouses. This is only a question of liability in the event that the loan installments are not paid or are not paid regularly.

Note:
The bank can then use an enforceable title, for example, to seize the wages to get the outstanding money. At the same time, however, the loan is also canceled, so that the borrower is also immediately required to pay a cash amount.

What role does income play?

Much more important in connection with the granting of a consumer loan is the amount of the net income to be achieved on the part of the borrowers. All income that is available every month is taken into account here. In addition to income from work, for example, income from renting and leasing or capital income.

The positions that reduce income are counted against this. This primarily includes existing loan liabilities, for which monthly installments are also payable. Maintenance obligations are also deducted from income because they reduce income accordingly.

Lending to consumers and consumption

Lending to consumers and consumption

If the income is sufficient after deducting all liabilities, there is usually nothing to prevent lending. With a consumer loan, however, care should be taken to find a healthy middle ground between the term and the rate. Because it makes little sense, for example, to pay off the new bedroom longer than it might even be in the bedroom.

A consumer loan is a bank loan used to finance consumer goods or services that consumers use. There are a multitude of options for consumers to finance an acquisition if the amount required in the form of the saved funds is not sufficient. One of them is consumer credit.

credit occasion

credit occasion

With other loans there is always a clear indication. An investment loan is about cash flow. In the case of real estate financing, the focus is on increasing the value and saving on the usage fee. With a consumer loan, on the other hand, there is no clear indication from which the repayability of the loan can be hung. It is often repaid from the borrower’s future income after the loan agreement has been concluded.

The consumer goods financed with the help of a consumer loan are often used for private use or consumption. A distinction must be made here between consumer goods (fuels, luxury foods, food) and consumer goods (motor vehicles, household items, jewelry, etc.). If consumer goods are purchased with a consumer loan, this can take the form of an initial purchase or a replacement purchase.

Info:
For banks, the maturities of consumer loans are often based on the useful life of the financed assets. As a rule, they do not exceed 5 years. The loans are often granted by the banks without earmarking because it is not useful for the bank to know what the borrower is using the money for.

The credit terms

The credit terms

In the case of a consumer loan, the credit institutions are generally required to use equity between 10% and 25% of the purchase price under their credit conditions. In the case of consumer loans, full financing by the credit institutions is only possible in exceptional cases. The borrower’s equity capital then significantly reduces the credit risk for the credit institutions. The borrower, on the other hand, also limits his financial risk somewhat because he does not have to pay the full amount of the objects to be financed.

Consumer credit is secured by the credit institutions, particularly with longer terms. The purchased consumer goods are used as collateral for the loan. This is done in the form of transfer by way of security (mainly for household items) or by way of security of vehicles or primary schools. The credit institution also usually requires access to the payroll.

Note:
The necessary loan documents are usually the purchase contracts for the purchased items as well as proof of income by the borrower. Such a consumer loan is often granted very strictly for a specific purpose. The repayment is usually made in the form of an installment loan or in the form of a maturity. In rare cases, an annuity loan is also an option.

The loan amount

The loan amount

The loan amount varies depending on the bank. It usually starts at 500 USD and goes up to sums of 50,000 USD, which have a term of 12 to 84 months. There are also exceptions where amounts up to $ 75,000 and a term of up to 120 months are possible. In this context, it is also important for the lender that the borrower is able to easily handle the monthly installments.

A household bill to be carried out by the borrower is often very useful. This is the best way to determine the monthly repayment rate or option.