Categories
Uncategorized

Find a loan for debt rescheduling – save debt and save interest?

If you want to take out a loan for the debt restructuring, you have several options. It could not only replace an installment or overdraft facility, but also combine several loans into a single loan. Before starting debt restructuring, there are a few important things to consider. What matters most is the amount of the debit interest and the prepayment penalty, which may have to be paid to the old lender. Debt restructuring is only worthwhile if the interest savings from the new loan are higher than the prepayment penalty. Otherwise it might be better to continue to pay off the previous loan and, if necessary, to make use of the right to make additional special repayments. Of course, this presupposes that the bank or the private lender agrees to a special repayment.

Debt rescheduling

Debt rescheduling

Many employees, civil servants or pensioners have a overdraft facility in their checking account. If they meet the requirements, the self-employed and freelancers can also receive an overdraft facility on their business account. However, it is called current account credit. The amount of the overdraft facility or current account credit depends on the amount of the monthly income. If they fluctuate, the average amount is used to calculate the personal overdraft limit. If the account holder has negative Credit Bureau entries, the bank cannot grant him overdraft facilities in most cases. An exception would only exist if the existing Credit Bureau entries are only marginal and the cause for this can be quickly eliminated.

The overdraft facility has a number of advantages. It can be used at any time through cash payments or use of ATMs and can be paid back to the bank just as flexibly. The account holder does not have to commit to paying a certain minimum amount each month. Nevertheless, it can make sense to redeem an overdraft facility and take out a loan for the debt rescheduling in this connection. In certain circumstances, this approach is even recommended by the house bank. This could especially be the case if the overdraft facility is constantly pushed to the limit and there is no realistic possibility of repaying it in the short, medium or long term.

A loan for debt restructuring is an installment loan with a fixed term and a uniform monthly rate. In this way, the account balance is gradually brought back to zero or positive. However, the customer often has to reckon with the fact that the overdraft facility is no longer available until the debt has been repaid in full for the debt rescheduling.

Debt installment loan

Debt installment loan

The interest on an installment loan fluctuates considerably in some cases. For this reason, it is worthwhile to carry out a comparison not only before a planned borrowing, but also at a later date. Ideally, a credit calculator on the Internet should be used for this. Otherwise, the customer can hardly understand how high the current interest rates are and whether an installment loan is a cheap offer.

Anyone who concludes that their old installment loan is too expensive should seriously consider rescheduling. This approach is particularly worthwhile in times of low interest rates. Once a suitable loan has been found that is optimally tailored to personal needs, the application process can be carried out very quickly.

Similar to any other loan, the creditworthiness is also checked here. If it is a German lender, he will obtain Credit Bureau information and check the customer’s income. With a foreign loan, it is sufficient if the income is paid regularly and is sufficiently high. In this case, Credit Bureau information is not required. As soon as the loan application is approved, the money is paid out very quickly. The loan can now be used for the intended purpose, which in the specific case means that the old loan will be replaced and the monthly repayment installments will have to be paid to the new lender in the future. In this context, it may be worthwhile to increase the total loan amount in order to gain additional financial scope. If the monthly installments are to be reduced, the first thing to consider is savings in interest rates. Under certain circumstances, however, it would also be possible to extend the term.

Combine multiple loans

Combine multiple loans

Anyone who has an overdraft facility and / or a credit card and has also taken out an installment loan can easily lose track of their financial obligations. In this situation, it would not only be highly recommended to reschedule one or more loans, but also to think about a summary of all liabilities.

The most important prerequisite for being able to take out a loan for debt restructuring is general creditworthiness. If all existing loans are serviced regularly and the monthly installments are paid regularly, there should be no major problems. It only becomes difficult if the borrower has failed to meet its obligations in the past and the Credit Bureau information shows serious negative entries such as canceled loans, an affidavit or ongoing personal bankruptcy.

Here, the defaulting debtor often has no other option than to look for suitable alternatives. If he has completely lost track of his financial obligations and the expenditure regularly exceeds the income, then there is overindebtedness. In this case, it would be imperative to negotiate with the private or public law creditors and to look for a solution together. A visit to a state-recognized debt counseling center and the use of expert advice can be a valuable help here.

Categories
Uncategorized

Can banks grant loans to everyone?

Many people interested in credit do not meet the requirements for lending. The default risk of the credit institutions increases with the legally required garnishment exemption limit or the credit check of the potential borrower already fails due to negative Credit Bureau information. However, the possibilities of borrowing are not limited to the national banking system; in particular, it is private or cross-border lending, which is often a viable alternative even in difficult financial situations. The possibilities for taking out a loan are diverse and available on an international as well as private level, so that basically everyone can receive at least a small loan. Professional and experienced private credit institutions have longstanding business relationships with international banks and investors.

Groups of people at risk or not creditworthy

Groups of people at risk or not creditworthy

The self-employed, low-wage earners, unemployed or people with negative Credit Bureau information are among the groups that are usually denied credit. If the income is just above the garnishment exemption limit, the credit institutions can hardly compensate for a loan default with an income garnishment. Business start-ups, small businesses or the self-employed usually fail due to the lack of collateral and insufficient assets in the credit check of the credit institutions. Temporarily unemployed people or people without an income are generally not creditworthy, even if there is a short-term prospect of starting work. A large number of loan offers are available to get you started in the online business or to transport interviews, which can also help with a lack of income or a fundamentally poor financial situation.

The debt trap snaps shut

 

The problem of non-creditworthy groups of people arises from the ever-narrowing financial freedom, which overpriced loans, such as overdrafts or overdrafts, quickly lead to large sums that are no longer manageable. In order to escape the debt trap, private credit providers provide loans for efficient debt rescheduling, with which borrowers can also be offered tailor-made solutions. The financial bottleneck can be bridged with an optimized term and repayment rate adapted to the budget.

Loans in the German banking system

Loans in the German banking system

Regular lending is aimed at regular recipients of income. Pensions, wages and salaries, but also the Credit Bureau request are used by the credit institutions for the credit check. With a positive credit rating, a loan can often be granted. The most common forms of credit include:
– the current account credit
– the installment loan
– the mortgage loan
– the guarantee loan.

The current account credit

The bank overdraft facility is also usually referred to as overdraft facility automatically when a current account is opened by the bank. The bank can, however, withdraw the overdraft limit at any time and without further notice. The current account credit usually has particularly high interest rates, which make it difficult or even impossible for the account holders to repay them. The way out of the overdraft credit trap is usually a debt rescheduling of the overdraft, which is converted into an installment loan.

The installment loan

The installment loan

The loan amount of the installment loan is repaid in agreed repayment installments over the loan term in mostly monthly installments. The installment loan is not tied to a purpose. The granting, payment, but also increasing of the installment loan are usually simple and easy. The installment loan is particularly suitable for repayment of overdrafts because the repayment rate can be agreed in accordance with the monthly budget if interest rates are relatively low.

The mortgage loan

A mortgage loan can be issued at particularly favorable loan terms against the transfer of real estate collateral to the lender. As a rule, repayment is made in the same way as for installment loans – in monthly installments. In contrast to other types of credit, the mortgage loan is associated with relatively high additional costs, which are incurred for notarization, agreements as well as the registration and later settlement of the mortgage in the land register.

guaranteed credit

guaranteed credit

Even people who have little or no income or who have a negative Credit Bureau can possibly get a guarantee loan. In the event of a positive credit check, the guarantor must be able to service the loan on its own and in full. He also undertakes to be liable for the repayment of the loan with all of his assets, even if the borrower now has his own income. If the loan is no longer serviced even if the borrower is in sufficient financial position, the guarantor is fully liable without the borrower having to be held accountable or obliged to repay the loan.

Loans outside the banking system

Credit intermediaries and foreign banks also grant loans to groups of people who have little income or whose credit history contains negative Credit Bureau entries. The loan can usually be applied for and taken out online. In many cases, private and specialized credit agencies take care of the processing until the loan is concluded between the parties involved. In addition, the issuing and repayment modalities are handled by the private credit agency. Loan application and lending are easy and convenient. Filling out online forms from the respective providers and the transparent comparison of the conditions enable an objective comparison to be made quickly. Neither private loans without Credit Bureau nor loans from foreign banks that do not cooperate with Credit Bureau create an entry with Credit Bureau. The main products in lending include private loans and foreign loans.

Private loans

Private loans

Private individuals act as lenders to invest in other alternatives in addition to traditional forms of investment such as securities or gold. The loan is brokered through companies to protect the identity and privacy of borrowers and lenders. Favorable conditions and simple processing characterize the private loans.

Foreign loans

In addition to foreign personal loans, well-known banks of other nationalities are usually involved in the area of ​​cross-border lending. With less restrictive legal restrictions, these banks can also provide loans to the unemployed, low-wage earners and the self-employed on good terms.

Components of loan agreements

The mostly extensive contract for credit includes numerous provisions, such as the general terms and conditions of the lender, as well as the agreed loan terms and the repayment terms of the loan contract. But the loan agreement should also provide clarity on special events, such as the payment of special repayments or the arrears of monthly installments. The agreements in the loan agreement include:
– the desired loan amount
– the desired monthly rate
– the loan term in months
– the APR
– any special repayments
– Default interest on arrears.

The loan agreement in detail

The loan agreement in detail

The desired loan amount must make the borrower’s financial emergency much easier. The loan is repaid in monthly installments, which the borrower can pay in the long term. Over the term of the loan, the monthly installments deduct the amount of the loan or the accrued interest. In order to determine a loan offer that is as favorable as possible, in addition to the interest conditions, the monthly charges and the convenient and permanently settable installment amount must also be taken into account.

The fees also include the institute’s estimated costs for the special repayments. If early loan repayments are made, this may be subject to additional fees. Interest also accrues in the event of late payment. The default interest must be clearly quantified in the percentage amount in the loan contract. The key factor in the loan terms is determined by the annual percentage rate. The annual percentage rate is composed of the nominal interest rate for the loan plus any regular costs incurred to process the loan. This makes the offers of the credit providers comparable for those interested in credit.

Professional execution of the contract

If a loan contract is concluded with a private loan provider, processing via the Internet is usually provided. The credit inquiries can be filled in directly on the providers’ website, whereby a loan approval is often made within a few working days. In many cases, documents and documents still have to be exchanged by post in order to also provide the contract with original signatures. The speedy handling of communication and customer inquiries as well as a friendly and competent customer service are part of the customer support, especially for private loan providers, in order to improve the transparency and convenience of loan processing for the customer. The online loan service is particularly fast and discreet in the processing of private loan contracts. Even after the conclusion, account management is available on the Internet as well as advice on questions relating to the contract.