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Too cheap home loans under pressure

The flexible way in which the lender grants cheap home loans to customers has long been a thorn in the eyes of the NBB. It is not the first time that the central lender has blamed lenders. For example, they decided last year that the lender should set aside more capital for risky mortgages, such as a high-quota mortgage (the ratio between the loan amount and the current market value of the home).

Higher interest

Higher interest

Some lender increases the price tag of the home loan if the borrower does not meet certain conditions. A comparison of different rate sheets shows that the lender increases the rate by ten basis points with a loan higher than 80 percent of the market value.

We see one of the most striking increases. The large lender increases the rate by 1 percentage point if someone borrows more than 90 percent of the estimated value of the home. “Despite the restrictive measures taken by the NBB in May 2018 in view of the increasing indebtedness of households, the majority of lender indicated that they would not tighten their credit terms in the short term,” the NBB reports.

The number of risky loans is increasing

money,dollar

They see an increase in risky loans. Recent figures show that 35 to 40 percent of home loans are issued over more than 90 percent of home value. Almost half of the home loans are granted to people who borrow more than 80 percent of the value of the property.

According to the NBB, this is the result of fierce competition in the mortgage market. For a lender, the home loan is the means par excellence for keeping a customer in the long term. Once someone has taken out a mortgage loan, selling by-products is easier.

Vulnerability 

The thorough price battle is not without risks. The high quota is, after all, accompanied by more vulnerability. The lender is in danger of getting burdened with losses if a property is forced to be sold by the borrower that the borrower does not meet his financial obligations.

At the moment it is still a warning from the NBB. “If necessary, we will indeed have to look at measures,” it sounds.

The NBB can in any case count on the support of the politicians. Alexander De Croo, resigning Minister of Finance has already indicated that he has no problems with it if the NBB wants to take extra measures. Febelfin, the Belgian federation of the financial sector, also indicates that it is prepared to agree to additional measures.

Own input

Own input

The most surprising support comes from the financial sector itself. For example, Johan Thijs, CEO at KBC in 2017, argued for a limitation of the credit to 80 percent of the purchase price. “In the past, buyers were able to put a fairly high input on the table. Now borrowers are finding it increasingly difficult to cough up their own contribution due to high house prices, “said the CEO.

To date, it is unclear what measures the NBB is willing to take if the lender continues to take large risks when granting a mortgage loan.

Low-interest rates persist

In any case, we should not be afraid of a sudden rise in interest rates. From the minutes of the January interest rate meeting recently released by the European lender, we can see that the chances are very small that they will raise interest rates shortly after this summer. Several experts have already indicated in the past that a first interest rate increase will only be before 2019 or 2020.

The ECB has already stopped its buy-back program in December, but Mario Draghi, the chairman of the lender, recently said that “his toolbox is still full of instruments.” by that statement.

In any case, the average interest rate for a housing loan remains particularly favorable at the moment. Anyone who today takes out a 25-year housing loan with a quota below 80 percent pays a fixed interest rate of 2.02 percent on average. 

Car loan rate calculator – safely calculate the rate

Car loan installment calculator – the benefit

Car loan installment calculator - the benefit

Very few consumers can or want to pay for a new or used car in cash. If the reserves are well invested, car financing can be a better alternative for buying a car. The current low interest rate supports car financing. The customer can choose between a dealer-independent bank or dealer financing.

The dealer often offers a favorable interest rate, but the cash payer discount allows the customer to negotiate the list price of the car, but the bank’s loan is still cheaper. The car loan installment calculator supports which financing is ultimately chosen.

The car loan installment calculator also shows the customer a list of top providers that offer cheap loans. It is advisable to use the car loan installment calculator before signing a contract. For this purpose, the purchase price of the car to be financed should be determined.

Balloon financing or three-way financing

Balloon financing or three-way financing

Basically, these two types of funding are similar. A deposit is paid for three-way financing. The credit flow in three-way financing is similar to leasing. In addition to the down payment, car buyers finance an agreed part of the purchase price each month. After the end of the term, the car can be returned or the final installment financed. A fixed interest rate is agreed for balloon financing.

A down payment can also be made here and a final installment is also due for this financing. This can also be financed with a follow-up loan. This is not used by car buyers, as the conditions are often not related to the residual value of the car.

Advantages and disadvantages of these financing models

Advantages and disadvantages of these financing models

With three-way financing, the car value is partly financed through installment payments. The down payment and the final payment thus reduce the total purchase price of the car.

The down payment can be chosen freely, it does not necessarily have to be high. Most of the time, this financing is provided by the dealer, who wants to use it to sell the less popular models. Any damage to the car can also increase the final rate. It is important to pay attention to the right conditions when concluding the contract. The car loan installment calculator helps. If you want to keep your car after the loan period, it is more advantageous to take out balloon financing.

There are many providers for this financing model. The low rates are an advantage, and the down payment remains manageable. The high closing rate can be seen as a disadvantage. It should correspond to the residual value of the car.

Instructions for the car loan installment calculator

Car loan installment calculators are free and non-binding in most cases. Not only can the rate amount be determined, but also the provider can be determined. It is advisable to find out the purchase price of the car in advance. Any cash payer discounts on bank financing should have been given to the dealer.

This is the exact purchase amount and the loan amount. Car buyers should set a limit on how high the purchase price of the car can be. This purchase price is then entered in the car loan installment calculator. In addition, the desired term and the annual percentage rate that the dealer offers. Any down payments can also be entered in the installment calculator. The down payment amount in USD, but it can also be entered as a percentage of the total price.

The installment calculator will then calculate the necessary loan amount. If you expand the information by entering the postcode of your place of residence, you can also find out about regional offers.

The car loan installment calculator as the basis for the right car loan

The car loan installment calculator as the basis for the right car loan

In addition to the above information, credit-related interest offers can be included. Once all the information has been completed, the installment calculator will compare various vehicle loans and display them on the basis of a list, namely according to the interest rate.

Top providers can also be found who offer the cheapest loan. The car loan installment calculator should be an important tool when buying a car.

What about the credit rating?

What about the credit rating?

No matter what type of financing the car buyer chooses, his creditworthiness or creditworthiness must be right. A loan is generally only approved if the customer can meet the necessary requirements, which guarantee that the loan will also be repaid. The lender will check the customer’s financial position.

In principle, the credit bureau is queried for every loan application. This information shows the lender how it is with the payment behavior of the customer. In addition, the income is checked. It must be so high that it shows an attachable share. The income must not be pledged. If there are negative entries in the credit bureau, a loan rejection can occur. Lenders then often require additional loan collateral.

This can be the delivery of the vehicle letter. That can be a solvent guarantor. When borrowers use the car loan installment calculator, the interest rate shown does not show the personal interest rate.

This only comes into effect when the borrower receives his loan offer.

The requirements for a car loan

The requirements for a car loan

First, the borrower must be of legal age. Many borrowers also set an age limit. Borrowers over the age of 70 often no longer receive a loan. The permanent place of residence must be in Germany. Income is checked using pay slips from the past few months, often also bank statements from the same period.

The employment relationship should have been for at least half a year and should not be temporary or include a trial period. Borrowers should know that the better the credit rating, the cheaper the interest rate will be.

The bad credit bureau and its consequences

The bad credit bureau and its consequences

If you have negative entries in your credit bureau, you will certainly have difficulties with lending. Car buyers who have a bad credit bureau may have a better chance of getting a car loan if they take it from the car dealer.

Especially if the car buyer is a good customer and has always paid his installments on time. Then the dealer could overlook a bad credit bureau. Even if a down payment can be made.

The most important needs of the credit market.

In the domestic economy, the gap between financially excluded people and very rich entities that easily receive long-term loans is widening. The credit market is regulated intensively, especially in Poland. In the article you will learn the most important needs of the credit sector and understand better how it works.

Retail banks are naturally the most important lenders

Retail banks are naturally the most important lenders

in Poland. In comparison with their counterparts in other developed countries, banks in Poland do not grant very risky investment loans, or even short-term (cash) loans. There is a lot of regulation in the country. For confirmation, it is enough to reach for banking law or the guidelines of the Polish Financial Supervision Authority and the Best Bank.

Regulations bring many positive properties, but also threaten the further development of the credit market. Why? Thanks to regulations, Poland has largely avoided the economic crisis. There was no pressure to pay off derivatives in the country. Other banks in the world have invested in derivatives, which are extremely risky in the long run.

Regulations in Poland protect the market, but at the same time prevent people with real needs from paying short-term loans. In the national economy, most people earn less than two thousand USD a month. There are many households that are completely excluded from financial terms without access to a fair loan at a retail bank.

Of course, you don’t have to go to a retail bank only. In the industry you will also meet social loans or a developed Cream Bank sector based on private capital. Unfortunately, trust in Cream Banks is limited, and loans have many usury properties. The most important need of the credit market is simply to focus more on the individual situation of the borrower.

Very often, the register of the Credit Information Bureau and the Economic Information Bureau do not present the actual repayment properties. Considering individual customer features, smaller and personalized loans, a solid debt collection system and penalties for late repayment of even small loans are actually a must.

The credit market also needs to clear the Cream Bank regulations.

The credit market also needs to clear the parabank regulations.

Usual loans as well as unreliable advertising mislead many customers. Dishonest Cream Banks focus on extremely high commissions, additional fees for examining the application, and also force a desperate client to agree to securing small cash loans with family property, mainly real estate. Usual practices on the credit market are unfortunately a way to reduce lending.

A good change in the credit industry is the development of so-called community loans from many individual investors. An important element of protecting the interests of borrowers is also a list of warnings published by the Polish Financial Supervision Authority. Each client of a financial institution is able to recognize the credibility of the lender.

When it comes to top-down tax cuts and help for the poorest households, it’s actually the foundation for reducing family tragedies associated with signing loan loans. Courts should also easily cancel similar contracts after detecting illegal entries. As you can see, the credit market has not only advantages, but also several disadvantages or problems to solve.

Useful information on cheap consumer loans

Since there is a large selection of consumer loans at several different loan companies today, it can be difficult to determine which bank to choose to get the most profitable consumer loan. There are many different loans with different conditions, and not every consumer loan is just right for you. But there is a solution to this – namely independent websites where you can compare consumer loans, and thus find the consumer loan that best suits your financial situation.

 

Advantage of the websites that compare consumer loans and credit cards

CREDIT CARDS

Is that they are independent and thus objective. Therefore, as a consumer you have the assurance that no banks or loan companies are favored over other companies. In order to find the best and most profitable consumer loan for your personal situation, there are some things you should be aware of. Perhaps the most important factor is the interest rate on the loan, which determines how expensive or cheap the loan will be. The interest rate on consumer loans is based on your private finances, therefore it can vary widely from person to person.

In addition comes the nominal interest rate, which should not exceed 20% to be a consumer loan belonging to the category of cheap consumer loans. In addition to interest expenses, there are set-up fees and invoice fees, which are important elements of consumer loans, which you should check before signing the loan agreement.

Remember, it is always worthwhile to spend a little extra time reviewing the various loan offers and finding out what interest rates, fees and any benefits or disadvantages the various finance companies offer. Don’t settle for the first and best offer, as you will be able to save large sums on finding the best and thus most profitable loan offer. This way you can save up to several thousand dollars a year.

 

Do you know

consumer loans

The airline Norwegian has its own bank – Cream Bank – which is only a few years old, but has nevertheless grown to become one of the largest and most popular online banks in the Norwegian market. At Cream Bank you can get consumer loans without collateral at a very favorable price as well as a quick processing time of your loan application.

 

What does the cheapest consumer loan mean?

consumer loan mean?

A cheap consumer loan is briefly explained a loan with great flexibility and much freedom, as well as low interest rates. Flexibility means that the bank offers payment deferral, reduction of invoice fees and / or the freedom to choose how much you want to repay each month. This kind of flexibility is very attractive to many, if they do not know what expenses await them, or if they have low or irregular income. Therefore, one can say that a bank that offers these goods as well as high flexibility is the best option when it comes to loan companies, and will be most profitable for you as a borrower to choose to take out a loan at a bank that offers this.

Credit during parental leave

There are various reasons why families in particular need a loan. A family always costs a lot of money, bills have to be paid and if an important repair is due or a school trip, then the money can become scarce. In such a case, a loan can be applied for during parental leave.

Requirements for a loan during parental leave

Requirements for a loan during parental leave

Families have to meet different requirements at the bank in order to apply for a loan during parental leave. These conditions must be met in the same way as for a disposition or installment loan. A spouse must have a fixed and permanent employment contract. It would be ideal if both are in an employment relationship, because then the chances of getting a loan are twice as high.

In practice, however, it often looks different, so that only one partner works and the other takes care of the children. So there is often a salary and parental allowance.

Parental allowance and child benefit do not count towards income, which many think. Child benefit is urgently needed every month and all important bills such as rent and electricity have to be paid from the income. Often there is not much left, so it can be difficult to get a loan during parental leave.

Conditions of the loan

Conditions of the loan

If the income is high enough and there are no negative entries in the Credit Bureau, a loan is quickly granted during parental leave. The borrower does not have to specify what the money is used for. A budget is drawn up to see how much is left at the end of the month. A rate can then be agreed with this sum.

Can promotional loans be used?

Can promotional loans be used?

Families with children can take advantage of various government grants, including a loan. Lender is the right point of contact for this, which can determine the financial requirements and then make a proposal for a loan. The loan is specifically designed for families, so interest rates are often very low and the term can be adjusted. Here, however, at least one member must have a fixed income.

Sources of income accepted by loan companies – family benefits, pensions, pensions

Most lenders, regardless of whether it is about getting a loan online or traditionally require the same documents to approve the loan. Make sure you take care of these documents before meeting the lender to speed up the tracking of the loan application. Here is a general list of possible sources of income that are accepted by loan companies, so some of the documents may not apply to you. The selected lender will definitely confirm the documents you need.

 

Sources of funding

loan

What will be the best depends on the required capital and the time when it is needed. A bank loan is the amount of funds borrowed for a specified period in the agreed repayment schedule. The repayment amount will depend on the size and duration of the loan and interest.

Many people use bank loans as part of their financial structure. In fact, bank loans are more accessible to well-off people, but as it turns out – not only an employment contract is the only source of income accepted by loan companies. They can also include:

  • family benefits (such as a 500+ program or other benefit)
  • pensions
  • survivor

There are also many other additional financing documents. For example, it could even be documentation of an existing loan, including the start date of the loan, the loan period. The last six months’ benefits regarding income statements are also good proof.

 

The borrower’s credibility

borrow money

Lenders look at how our creditworthiness lies – based on simple things – clear documents. We should also remember about a good credit history, because in the eyes of the insurer, exceeding the credit limit is a cardinal sin. It is better to have two accounts at the half-limit level than one used per max. The length of your credit history also matters. It should be remembered that at an early age you can start working to obtain maximum creditworthiness by opening a visa account and faithfully paying off the balance each month. You can never borrow money, but if you do – you can consider a car loan. A two-year payment record of this type will significantly increase your position among potential lenders.

It is also preferred to use different types of loans, such as mortgages, credit cards, car loans and personal credit lines. A diverse mix is ​​characteristic of someone with a long credit history.

Proof of income

Note the two key words ‘proof’ and ‘income’. Your hard work is starting to pay off right now. Even at a time when contracts and freelancing are widely accepted, regular employees with regular payments have an advantage over someone who is self-employed with financial instability – although, of course, entrepreneurs who submit relevant documents can also apply for a loan.

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