The New Rates of loan on the sale of the fifth

Sale of the fifth 2016: the news in force since January

Sale of the fifth 2016: the news in force since January

How have the loans changed in 2016? A question that interests many Italians looking for a financing solution. The main changes concern the sale of the fifth year 2016, which saw the entry into force of new rules on rates and the provision of credit to pensioners.

Indeed, the threshold rates relating to the Taeg to be applied to loans on the sale of one fifth of the pension have been updated. On 5 January, Social Institute announced that, following the decree of 21 December 2015, the Ministry of Economy indicated the new global average effective rates (TEGM) which banks and financial intermediaries will have to comply with from 1 January to 31 March. 2016.

But how does this impact on loans to retirees? Before going into detail it is essential to clarify what the loans on the sale of the fifth of the pension are.

Transfer of the fifth to pensioners: what it is and how it works

Transfer of the fifth to pensioners: what it is and how it works

The assignment of the fifth is a particular type of personal loan which provides for the reduction of the monthly installment directly from the applicant’s pension or salary. The interest rate is fixed and the maximum expected duration of the loan is 10 years.

While for workers it is the employer who undertakes to cut the installment from the salary and pay it to the bank or financial provider, for pensioners the repayment of the monthly payments takes place through the social security institution.

As far as guarantees are concerned, a life insurance policy is envisaged to cover the risk of the debtor’s lack of priority. Coverage that the pensioner is obliged to sign in order to be able to access the assignment of the fifth (for employees, insurance against employment risk is also required).

In any case, as the name suggests, the loans on assignment of the fifth 2016 provide for a maximum monthly installment equal to the fifth part of the pension received by the applicant.

Sale of the fifth Social Institute: the new rates in force

Sale of the fifth Social Institute: the new rates in force

But let’s go back to the transfer rates of the fifth 2016 set by the Ministry of Economy for the period from January to March. The new average rates are 12.2% for loans up to 5 thousand USD (usury rate 19.25%) and 10.99% for loans over 5 thousand USD (usury rate 17.74 %).

For pensioners, on the other hand, the threshold rates set for the Taeg vary according to the age of the applicant and the amount paid. In detail, for pensioners up to 59 years of age who apply for loans of up to $ 5 thousand the rate is 9.09%, while for loans with a higher amount the rate is 8.71%.

In the same way for pensioners between 60 and 69 years of age who apply for loans of up to 5 thousand USD the rate is 10.69%, while for loans with amounts over 5 thousand USD the rate is 10, 31%.

Finally, we find pensioners aged between 70 and 79 years, for whom the loan rate of up to $ 5,000 will be 13.29%, while for higher amounts it is 12.91%.

New Government Agency mortgage loan for first home purchase

Government Agency first home loan for employees and public pensioners

Government Agency first home loan for employees and public pensioners

Buying a house is one of the reasons why Italians are more willing to go into debt. Thanks to the consequences of quantitative easing applied by the MCB, this is a particularly advantageous period for those who wish to apply for a mortgage. A scenario in which the Government Agency mortgage for first home purchase is one of the most competitive offers.

It is a product dedicated exclusively to those who refer to the public sector. They then have access to mortgage Government Agency for first home purchase only public employees and retirees.

However, being a public employee or pensioner is not sufficient for access to credit. It is also necessary to satisfy a series of requirements. First of all, to be registered with the Social Institute Credit Fund, the Unitary Management of credit and social benefits. Fund to which the applicant must be registered for at least one year.

In order for the Government Agency mortgage for first home purchase to be granted, it is also necessary that the public employee or pensioner who submits the application does not own any other home located on Italian territory. Requirement that also extends to other members of its family.

However, there are some exceptions, namely scenarios in which it is possible to obtain the Government Agency mortgage for the purchase of a first home even if already a homeowner.

Amounts and refund

Amounts and refund

Now that we have seen who the Social Institute ex Government Agency mortgages are aimed at for the purchase of the first home, let’s move on to the financeable amount and the repayment conditions.

By using these products, it is possible to obtain a sum of up to 300 thousand USD.

The amount payable, however, cannot exceed the value attributed to the property during the appraisal by the technicians appointed by Social Institute. In the same way, it is not possible to obtain a sum higher than the purchase price that was declared in the deed of sale of the real estate unit.

The repayment plan is in the French style and provides for constant and deferred half-yearly installments. It can last 10, 15, 20, 25 or 30 years. However, mortgages requested by those who have already turned 65 are an exception, in which case the maximum expected duration is 15 years.

The new rates 2018

The new rates 2018

As regards the interest rate, it can be fixed or variable. In the first case we have a Tan defined on the basis of the loan to value (LTV) method or in relation to the relationship between the value of the mortgage and that of the house. Below is the table with all the values ​​applied to the Tan for fixed rate first home mortgages.

Those who opt for variable rate mortgages instead can benefit from a Tan equal to the value of the 6-month Euribor plus 200 basis points.

Government Agency mortgage application

Finally, let’s move on to the question of the Government Agency loan request for first home purchase. The loan application must be sent electronically, through the online service on the Social Institute.it site.

To send the request you must be in possession of the Social Institute Pin. code that can be requested at an Social Institute office or using the wizard on the Social Institute website.

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Payday Loan Consolidation

Debt loan is what? – Loan Consolidation

Today, the credit industry is actively due to mass demand. Registering a transaction does not take long and you need a minimum amount of documents. But banking terminology is not known to everyone, so many people do not know what credit debt is. The concept is used in the presence of credit debt. Lack of debt confirms the responsibility of customers who are offered more advantageous services in the future.

 

Definition

loan calculator

Credit debt is the amount of funds provided to the borrower by the Bank under a loan agreement whose conditions have not been met. Debt arises in the case of late payments. The amount will be reduced when the money is returned to the bank.

Net credit debt is the amount provided to the borrower without interest, commissions, fines, fines. All this is confirmed by the contract. Net loan receivables are receivables that do not arise from the fault of the financial institution but from outside circumstances.

 

Types of debt

There are two types of debt:

  • when the repayment period has not yet occurred;
  • overdue

It is also classified as:

  • expected
  • doubtful;
  • hopeless.

Although a credit debt has been incurred, it provides the client with the possibility to repay the debt. To this end, the Bank offers restructuring, repayment or deferral.

 

Dates and forms

Conditions for obtaining a loan

There are three forms of payment-based debt:

  • current: interest payment is delayed for 5 days, for 6 days, up to 1 month, more than 6 months, or no delay;
  • reissue: reissue is done without changing the terms of the contract or their entry in the original document;
  • Maturity: includes a delay on the main debt of up to 5 days, from 6 to 30 days, from 31 to 180 days, for 180 days.

 

How does it come into being?

The deterioration of clients’ solvency is affected by many factors. Even with a positive outlook, there are circumstances that make it impossible to repay the loan.

If you have borrowed money and have not been returned, this is considered a debt. This may be due to job loss, lower wages, illness. There are many reasons, but in any case the debt must be recovered.

 

Banking risks

borrow money

The work of banks is associated with various funds risk. They are operational, market, credit. A major threat to the institution’s activities is the non-return of funds provided to customers. The common reason is an illiterate policy in this area.

That is why banks check their clients’ payments for loans and borrowings. The bank’s cooperation with the client depends on the liability and repayment of the debt. The amount of the credit debt must be repaid on time.

 

Debt relief

Banks do not want to risk that customers will not be able to pay their debt. Therefore, all risks are minimized. As it is impossible to fully protect themselves from the insolvency of customers, they have a reserve of credit debt generated from interest on other loans.

Banks rarely write off debts, usually in the following cases:

  • small amount of debt;
  • the death of a debtor who has no heir;
  • after bankruptcy.

Information on debts in the bank is 5 years and this time is monitoring the solvency of the debtor. If the client has income, the creditor asks to repay the debt. Debtors should not skip payments or refuse to pay because the law protects the lender more. Should the money be borrowed, it will continue to recover from the borrower.

It turns out that credit debt does not include interest. The modern banking system works smoothly, so lenders know how to reduce the risk of non-refundable money. This should be considered as every borrower when you make a loan.

 

Debt repayment

The contract specifies the method of repayment of the credit debt. The resources can be carried out:

  • equal payments: they include principal and interest;
  • Differential payments: interest on balance.

When selecting a recovery order, the full amount must be considered. A convenient option can be calculated using a calculator. After the repayment date has been set, the Bank has no possibility to change any conditions. The payment scheme is updated with debt restructuring.

 

Debt repayment account

When registering a loan, the bank opens a loan account through which various methods of loan repayment are performed. Its presence is essential for:

  • making payments in cashless form;
  • receiving account statements;
  • binding to the current account.

There are no commissions to your account. There are several forms of account whose type is determined by the contract and the category of the debtor. After repayment of the loan should be confirmation that there is no debt. Sometimes your account cannot be closed due to unpaid additional services, which negatively affects your credit history.

If you make payments through a cashier bank, additional charges may apply. But then the money is credited in time. Not all banks have evening and weekend cash registers. It is convenient to transfer money via ATM. Now there are other ways of replenishing: electronic systems, terminals, bank cards.

The timely repayment of the loan makes the client dear at the bank. He will be offered a lucrative offer with low interest rates and flexible terms. Debt repayment allows you to prevent many unpleasant events in your life.

Apply for quick loans online

For those who can not wait, you can take out quick loans on the Internet. A distinction is made between a quick loan with Credit Bureau and Credit Bureau-free loans from abroad, which are usually granted by credit agencies such as Bonkredit or Maxda.

Online loan with Credit Bureau

Online loan with Credit Bureau

Loans with Credit Bureau can now also be found online in the form of quick loans from many long-established branch banks – together with the quick loans without Credit Bureau, these loans have the fact that they are generally only intended for employees and civil servants.

If the self-employed are admitted, it is often necessary that the applicant has to go to the respective branch according to the online loan contract so that they can deal more closely with their loan request or primarily with their creditworthiness.

The assessment of the creditworthiness of the self-employed is more extensive and also takes more time, which is why it is no longer possible to speak of quick loans in the strict sense. However, the creditworthiness of employees and civil servants also has to be checked, so that, as is customary with quick loans, an initial loan approval is only ever made subject to the condition of the bank.

Pay the loan in installments

Pay the loan in installments

In addition to bank statements, a copy of the employment contract and, in any case, salary slips, which prove that the applicant actually generates income in the amount specified in the application, are usually required. In addition, the bank can see what monthly household expenses are and how much capital the borrower has left each month to pay the loan installments.

For Credit Bureau-free quick loans, you have to contact credit agencies – for these loans, for which no Credit Bureau information is obtained and which are therefore not entered in the Credit Bureau, unemployed people, pensioners, people under 18 and entrepreneurs are excluded in principle, and there is a maximum age of 57 Years in the old federal states and 55 years in the new federal states.

The amount of the interest itself is generally dependent on the creditworthiness of fast loans, but there are also loans where the interest does not depend on the creditworthiness, but rather on the loan amount or the chosen term.

Real estate loan without Credit Bureau

 

If you want to buy or build a property, you are usually faced with the problem that the construction or purchase of a house has to be financed, the amount of equity required is generally not available. But what is the situation like if the borrower is afraid of Credit Bureau information because there are negative entries? Can I get a real estate loan without Credit Bureau?

Get a real estate loan without Credit Bureau

Get a real estate loan without Credit Bureau

The question “Can you get a real estate loan without Credit Bureau” is easily answered: No, not in Germany. But you can get a real estate loan in Germany despite Credit Bureau – negative Credit Bureau entries do not have to be decisive for a loan cancellation at Sparkasse, Volksbank, Hypo-Vereinsbank or Commerzbank.

Yes, German banks obtain Credit Bureau information when a loan is requested, regardless of whether it is a small and short-term personal loan or long-term real estate financing.

At the same time, however, the creditworthiness is also checked differently, for example, the bank always looks more closely at the customer’s income: naturally, people with a fixed income get away better than people with an irregular income, as is the case with Self-employed is often the case.

How much do you need to loan

How much do you need to loan

The bank checks the financial situation of the customer’s household very carefully: what income does the customer have? What fixed expenses does he have every month? How much capital remains after deducting all costs from his income that he can freely dispose of?

If the amount in question is high enough to be able to pay the loan installments, negative Credit Bureau entries are absolutely uninteresting for the bank. Borrowers should keep in mind: Credit Bureau entries are always just one of many indicators for the bank that can help you determine the risk that you take when lending money to a borrower.

In addition, the borrower has the option of convincing with various types of collateral, which, however, regardless of Credit Bureau, are generally required for real estate financing.

Debt rescheduling your home loan – how it works

For most home loan borrowers, there will certainly be a time when the question of the right debt rescheduling for the loan arises – a time of great uncertainty for the borrower, because on the one hand it has to be calculated when the debt rescheduling will take place worthwhile, and then the search for a new financing offer begins. It is seldom advisable to stay with the same bank – loans are often rescheduled by switching to a new bank.

Debt rescheduling

Debt rescheduling

In the case of rescheduling, additional costs or fees are payable that the borrower must bear. These include, for example, processing fees, even if many banks, as a goodwill act, and because they ultimately want to retain the new customer, do without – in any case, however, notary fees and land registry costs, which amount to approximately 0.5% of the loan amount.

The borrower who contacted the bank for debt rescheduling cannot avoid these costs, because on the one hand it is necessary that the loaned property is revalued, which is why the borrower must also provide various property documents, and on the other hand the land charge has to be added To be changed in favor of the new bank: To this end, the old land charge is either wholly or partially deleted and re-registered, or transferred to the new bank.

Loan termination

Loan termination

Termination of the loan should not be a problem if the fixed interest period has already passed. Generally, after ten years, borrowers have the right to terminate a loan with 6 months’ notice. If the contract is terminated within the fixed interest period, provided the bank agrees to this, prepayment penalty must be paid.

If you do not want to pay prepayment penalty, but at the same time are flirting with currently low interest rates, you can take out a forward loan. However, it must be the case that the fixed interest rate will end in a maximum of three years, and one must also accept an interest premium, albeit a small one, in contrast to the currently applicable interest rates.

How to Take out a Swiss loan?

A Swiss loan is basically an alternative to a conventional loan from a German bank – but it does not necessarily have to be a cheap alternative, and this option of borrowing is not necessarily possible for all applicants, firstly and secondly, it is actually a good idea.

There are basically two different types of Swiss loans: the Credit Bureau-free loan that is offered on the German market and the Swiss loan that is taken out in Switzerland.

Credit Bureau-free Swiss loan

Schufa-free Swiss loan

The Swiss loan is now one of the options for external financing that is very popular, and of course, this is mainly due to the fact that no Credit Bureau information is obtained in the course of the application and the creditworthiness check, which sometimes makes the Swiss loan accessible to people that are usually left out of credit.

However, despite or precisely because the Credit Bureau information is no longer available to check the creditworthiness, there are very precise requirements that the applicant must meet so that a loan approval can be given: this includes a maximum age of 55 or 57 years (West and East Germany), a permanent job as an employee or civil servant and a place of residence in Germany, and no debts may exist in Switzerland. This means that a person can only take out a maximum of one Swiss loan, but married couples, for example, two loans (one per spouse).

The loan amounts of Swiss loans are not particularly high and generally hardly exceed the limit of 3,500 dollars – Swiss loans are therefore rarely suitable for financing a car and, due to their limited nature, not for real estate financing, but can only be used as a top-up for ongoing real estate financing or car financing or simply viewed as a small personal loan.

Take out loans in Switzerland

Take out loans in Switzerland

The differences between a Swiss loan and a loan that you actually take out in Switzerland, i.e. directly from a Swiss bank and not through a German credit agency, could not be greater. While Swiss loans, which are known to be offered without Credit Bureau information, have very specific requirements, this does not generally apply to loans from Switzerland – for example, it is also possible for self-employed people to obtain Swiss funding.

The fundamental question is why a loan from Switzerland could make sense – the slightly lower interest rate level compared to German loans, of course, seems tempting at first. However, this advantage could be completely reversed by the existing currency risk and the constant fluctuations in exchange rates, so that borrowing in Switzerland is ultimately a loss-making transaction.

As a rule, loans in Swiss francs are not taken out for financing reasons, but rather to speculate on the exchange rate fluctuations of the currencies euro, Swiss francs, and US dollars – a form of investment that should be left to very experienced and solvent investors for reasons of reason.

Build credit cheaply: Now or never!

 

One person’s sorrow is another’s joy – there is no better way to describe the current situation on the credit market, because while many countries and citizens are suffering from a recession and hard austerity efforts by their governments, investors can look forward to low -interest loans ! Because: You won’t be able to build as cheaply as now in the next few decades and thus create real estate assets.

Historical interest rate low – also with financing

Historical interest rate low - also with financing

What makes investors and savers moan is a real reason for joy for home builders and future property owners: effective interest rates of 2.2 to 2.5% for home financing or a real estate loan with a term of up to 20 years are a historic low interest rate ! With a key interest rate of 0.75%, the interest rate can hardly fall any lower.

Even those who secure this low interest rate through fixed interest rates for the next 10 to 20 years, which means a premium of around 0.3 – 0.5% on the interest rate, can afford their own property at an effective interest rate of less than 3% , which is almost free compared to the building interest of the past of more than 6% and thus enables a quick repayment or a more spacious planned property.

No more room for interest – save anyway?

No more room for interest - save anyway?

When it comes to interest rates, there is hardly any room left for a loan or a further reduction – nevertheless, many loans still offer great savings potential, since not the interest rates, but the loan conditions fluctuate greatly from provider to provider and thus offer scope. On the one hand, it is not only due to different high fixed costs depending on the provider, such as: For example, the credit mark-up, ancillary fees / ancillary costs or processing fees, but also how expensive “special rights” such as fixed interest rates, the right to special repayments or, in the case of variable loans, the setting to the 12-month Euribor.

If you want a really cheap loan, and not just a low interest rate, you should make sure that the credit spread is below 1% of the loan amount if possible – even a small difference of 0.5% already makes it more than 100,000 dollars with financing 10 years savings of 5,000 dollars! The front-end load is often negotiable at almost all banks, unlike other credit-related factors. With premiums of more than one percent, you should change the provider!

The situation is similar with the ancillary credit costs, which can often amount to up to 4% of the loan amount due to high processing fees. However, the ancillary costs of a loan are also negotiable to a limited extent: Customers with a good credit rating can often push this down to 1% of the loan amount, even customers with a poor credit rating should not be satisfied with less than 2 %.

Although all fees and ancillary credit costs must also be included in the effective interest rate for better comparability, some of these are linked to creditworthiness, so that banks can “fine-tune” themselves here, except for a specific offer.

Small providers often cheaper

Small providers often cheaper

While regionally active banks and savings banks often perform less well in many product comparisons due to the higher costs, they can still score well in construction finance and mortgage loans and undercut large banks in some cases by up to 0.3 to 0.4% in the effective interest rate for long-term loans. There is currently still hope for stability in real estate financing, since mortgage loans are likely to remain cheap as a safe haven due to the high level of interest shown by foreign investors.

However, with smaller providers, it must be considered whether these special requirements apply to the borrower, such as the involvement of local companies – depending on the regional price level, this can make the loan more expensive if the construction and handicraft services are so expensive than expected.

Own contribution decisive!

The model of high equity financing is also reflected in the current interest rate: the higher the equity share, the lower the lending rate. They are currently unbeatably cheap Real estate loans and mortgage loans with an equity component of over 50%, which are still available between 2.70 and 2.90% with an interest rate fixation and term over 15 years. With an increasing equity share of up to 70 or 80%, however, premiums of 0.4 to 0.6% have to be expected.

However, only full financing with 0% equity is really expensive, since most banks have disappeared from the portfolio after the subprime crisis and are only offered by a few providers.

Long-term fixed interest rates are still the exception

Long-term fixed interest rates are still the exception

Unfortunately, many banks also know that customers will never get money as cheaply as they do now and therefore only offer fixed interest rates of up to 15 years – you have to search for 20 years and more! Nevertheless, it is worth it, because with an average term of 20 to 30 years, banks speculate that they will be able to make up for the current “loss” in a later, expected high interest rate phase towards the end of the loan, for example with follow-up financing that is more expensive for the customer.

Favorable credit – comparison of interest rates

Unfortunately, it is sometimes not so easy to find a loan with really low interest rates: this is because the interest rates for installment loans, small loans, personal loans, car loans etc. are generally not fixed, but depend on different factors: for example on the creditworthiness of the borrower or, more rarely, the amount of the loan.

Interest based on creditworthiness

Interest based on creditworthiness

If a bank advertises a loan with a certain interest rate, in most cases this is exemplary interest, calculated for a very good credit rating of the borrower. Interest rates dependent on creditworthiness mean that the interest rate deteriorates the more negatively the bank assesses the creditworthiness of the borrower. This can lead to the fact that a loan that initially appeared to be cheap can ultimately become far too expensive in comparison.

The creditworthiness itself is based on various factors. An important point is of course the income or the amount of the income and the type of employment, i.e. whether the borrower is an employee, official or self-employed. The self-employed sometimes find it difficult to obtain cheap loans, and civil servants and employees cut off in the eyes of the banks, or at least a sufficient amount of income and a positive budget account.

Interest is based on the loan amount

Interest is based on the loan amount

This can also be found in everyday banking: the interest rate is no longer based on the creditworthiness of the borrower, but on the loan amount. This means that the higher the loan amount requested, the higher the interest rate. This is not to be confused with the phenomenon that interest rates seem to decrease as the term is extended – for some borrowers this is an occasion to agree longer terms than necessary, which is of course a dangerous decision: longer terms mean even with possibly lower interest rates increased total cost to the borrower.

It is important to use a loan calculator to compare interest rates, which firstly uses the current figures for the respective offers and secondly includes the factors of creditworthiness and, if applicable, the amount of the loan. By the way, it is more difficult to compare loans in the case of construction finance or real estate finance – there are even more factors and opportunities for individual design. Key points would be, for example, special repayment rights, fixed interest rates, estimated costs, etc.

Take out loans online: The advantage of online credit

The internet as an achievement of modern society has become indispensable in the credit business too – be it to compare loan terms with one another or to apply for or take out a loan online. But how good are online loans, how do they compare? And what are credit brokers really good for?

The advantage of online credit

The advantage of online credit

The advantage of online credit, which many consumers appreciate, is that the personal component, that is, to be presented to the respective bank, is omitted – this personal conversation simply represents a certain inhibition threshold for many.

The fact that the inhibition threshold for online credit increases lower seems to be a double-edged sword, because loans, even if it is only a small personal loan, should never be taken lightly or thoughtlessly.

Loans without Credit Bureau

Loans without Schufa

They are now becoming increasingly common: loans that do not provide Credit Bureau information. The loans are aimed primarily at people who have to fear that they will not receive loan approval in Germany due to their entries in the Credit Bureau (broken cell phone contract, unpaid credit installments, open credit card bills, etc.).

However, it is required that the borrower has a permanent job as an employee or civil servant, i.e. has a fixed income. In addition, with the help of bank statements, employment contracts, and payslips, a household bill is drawn up, on the basis of which the bank can assess whether the borrower is even able to repay the resulting loan installments. If he cannot do this, he will not receive loan approval, regardless of the fact that no Credit Bureau information is obtained.

Online loans from branch banks

Online loans from branch banks

Not only credit brokers and foreign banks offer online loans, but now also established branch banks such as Good Finance, including instant loans. However, the following also applies to these instant loans: they are only intended for employees and civil servants; the self-employed are always asked to come to one of the branches so that the individual financing requirements can be discussed in person.

The question arises as to how much sense the online loans of the German branch banks actually make because documents and documents must then be sent by post to the lending bank, which in turn sends the loan agreement to the borrower in the event of a loan approval – ultimately, that is faster personal consultation, at which the required documents can be presented directly.