Credit cost trap – Prevent hidden costs in the loan

Consumers usually take out loans when major purchases are made. This is understandable, because who has enough money to finance a new car or even a house at once? However, due to carelessness, many consumers fall into a credit cost trap. You can find out how to avoid this and identify hidden costs in the loan in the following article.

 

The trick with the variable interest rates

interest rates

This is probably the biggest credit cost trap that countless consumers fall for. If you search for cheap loans on a comparison portal, you will inevitably come across offers that promise effective annual interest rates of less than 1 percent. Comparison portals arrange the offers according to the amount of interest, so that the relevant loans land at the top. They are happy about the apparently cheap loan and make the loan application. Only then will you notice the cost trap for the loan because the interest is no longer so cheap. Instead of less than 1 percent, the bank suddenly demands 7, 8 or even 10 percent. This is completely legal because the interest rate on these loans depends on the customer’s credit rating. The promised low interest rate is only received by selected customers with a very good credit rating, such as civil servants. Most consumers have to pay significantly higher interest rates. As a small print note, under the offer in the loan comparison, you will find the sentence: “Two-thirds of all customers pay XY percent interest.” This is the realistic value that you should assume when comparing loans.

 

How can variable interest rates be avoided as hidden costs in the loan?

Instead of formally applying for a loan, you’d better make a condition request to the bank. That means you ask what the interest would be if you applied for a loan. This is how you get this info without the loan application being registered in your Schufa.

Alternatively, you can also opt for a loan with a fixed interest rate that is independent of creditworthiness. However, this is only offered by a few banks. Incidentally, the interest on a loan averages just under 5 percent. Most consumers would drive better with a fixed rate. There are also no hidden costs for the loan.

 

The term as a cost trap for a loan

loan trap

The usual terms for a private installment loan are between 12 and 84 months. Only a few banks offer longer terms, for example up to 120 months or even 180 months. Due to a lack of experience, many consumers opt for a long term because this reduces the monthly rate. Without knowing it, they fall into a credit cost trap. A longer term increases the cost of the loan because you have to pay interest over a longer period of time. The credit comparison offers show you the total cost of the loan at the bottom. With a large loan amount and a long term, that’s quickly a few hundred euros more. Nevertheless, with a high loan amount, it may make sense to accept a long term in order to get the monthly installments as far as possible. This is often very individual, depending on the life situation.

 

How can you prevent the term as hidden costs in the loan?

How can you prevent the term as hidden costs in the loan?

Choose the term so that you can pay the installments without effort. It is essential to avoid delaying repayment unnecessarily. Instead, do everything in your power to pay off the loan as soon as possible.

Almost everyone who has a checking account is given a overdraft facility by their bank. It is not uncommon for the bank to appear to be generous and to grant an overdraft facility in the amount of two or three months’ earnings. The cost trap for the loan snaps at the latest when a quarter is over and interest is due. As a rule, the overdraft facility is the most expensive loan. Even now, in times of low interest rates, the bank often charges 11-12 percent or even higher interest rates on the overdraft facility.

 

How can you avoid expensive overdraft interest?

How can you avoid expensive overdraft interest?

If possible, try to get by without an overdraft facility. If you have already used up your overdraft facility a lot, talk to the bank and ask them to gradually reduce it until you reach an amount you can live with. Alternatively, you can reschedule the overdraft facility.

This is a particularly insidious cost trap for a loan because it only comes into effect long after the loan agreement has been signed. The prepayment penalty is a penalty fee that you have to pay if you redeem (pay off) the loan early, for example through a debt rescheduling. The bank justifies this with lost profit. Depending on the bank, 1 – 3 percent of the outstanding loan amount is calculated as prepayment penalty.

 

How can the prepayment penalty be avoided?

How can the prepayment penalty be avoided?

There is basically nothing you can do about it. If there is a corresponding clause in the loan agreement, you will have to pay the fee for a debt rescheduling. Calculate the costs and add them to the debt restructuring costs. So before signing the contract, make sure that your loan contract does not include prepayment penalty!

Borrow USD 10000 Online: Applying for a Big Loan

A loan of $ 10,000 may sound like a large sum, but it is cheap to get from many different loan services. The long maturity of the flexible loan allows for very low-interest rates, which do not increase the cost of the loan.

Previously, a $ 10,000 loan online succeeded solely with consumer credit, but now several flexible credit services have raised the credit line to $ 10,000. This means that the customer has the option of raising a flexible loan in several installments, or even up to ten tons at a time.

All $ 10,000 leverage is always a loan without collateral. This offers every applicant the opportunity to apply for a large loan on their own, without the need to pledge their property as collateral or ask their family or relatives to secure the loan. Hence, large loans can also be borrowed immediately.

A big loan can succeed without loans from traditional banks. You can easily retrieve it from your home sofa using your computer or mobile phone. It might not be easier to borrow USD 10,000.

Applying for a Big Loan

Applying for a Big Loan

It is not advisable to go for large loans without investigating the situation. There are many options on the market and many different loan products to take a big loan over a long period of time. By researching and comparing a loan (find out more here), you will usually find the best possible way to keep costs down and payback painlessly.

The loan begins with the planning, followed by a preliminary comparison of the lenders, completion of the loan applications and final comparison of the loan offers. This may sound complicated, but it is nothing more than a ten-minute project that can save you hundreds of dollars in long-term loans.

Good Finance design

bank

Everything starts with determining the need for a loan, so in its simplicity, the question is: how much money do you want to take. If the amount is not fully known but is likely to be close to USD 10,000, then multiple credit institutions will be able to provide this amount of upgraded flexible loans.

Consumer credit also gives you the opportunity to take out a 10000 loan, it offers long repayment times, which keeps the interest generated by the lever low. In comparison, it is worth paying attention to the other costs of a loan, especially if you are borrowing over a long period of time.

The most important thing when choosing a loan product is knowing that it will definitely fit your needs well. A loan that is not fully suited to what you need can pay a lot of extra in costs and interest. The loan carries a monthly interest rate as well as an annual interest rate, which generates additional expenses on the loan amount.

So it is useless to apply for a loan that you do not need, paying for it is completely unnecessary.

Good preparation before borrowing will help you identify potential pitfalls and make the right choices for your personal finances. The applicant must always repay the credit in full, so your own finances should be considered when making repayment plans.

loan Services

money

There are several lenders in the loan market that offer opportunities for borrowing up to ten tons. There may be major differences in terms and conditions of a loan, even though the costs and interest rates of a loan are almost identical at a glance.

Credit services have also been able to impose conditions requiring, for example, an applicant over the age of 18, precise requirements regarding income limits, and possibly additional costs for additional services such as postponement, gratuitous or grace-free months.

Comparison of Leverage Services is Easy with a Loan Search: You enter the amount of loan you want and you immediately see a list of lenders offering the loan option you want. With one click, you can easily find detailed information and professional reviews from Vip Issuers.

Once the appropriate loan locations are selected, a free loan application will be submitted. Sending a loan application is not binding, but is a request for a credit institution to assess your creditworthiness and send a personal loan offer.

Loan offers for $ 10000 visible

After the lodge service has processed the application and made a credit assessment of the applicant, a personal loan offer will be sent. The loan offer contains all the necessary information regarding Good Finance:

  • The exact time of payment for the credit and the size of the monthly installments
  • The monthly interest rate on the credit and the effective annual interest rate
  • All prices for different services like loan creation, account management fees
  • Information on the ability to postpone the due date or request a gratuitous and deferred month

This information makes it easy to sort all your credit institutions, and then find the best loan for your needs. Remember that asking for loan offers is free and in no way obliges you to borrow money from the service. You can request as many credit decisions and offers as you like, and then choose the best option.

Once you have found the best loan, go to the loan bank to sign the loan offer. Authentication is done using online banking codes or a mobile certificate used in combination with a personal phone number.

Once the loan offer is signed, the bank will process the application and transfer the money to the applicant’s account. With a flexible loan, the applicant has access to their own credit account, which can be used to withdraw money into their own account. 

Financial products without Credit Checker – possibilities and limits

Due to the increasing number of people with negative Credit Checker entries and the associated difficulties in applying for “regular” financial products – this includes, for example, loans, checking accounts, cell phone contracts or credit cards – there are now more and more relevant “replacement products” without Credit Checker information.

In accordance with the laws of the market economy, strong demand usually goes hand in hand with a corresponding offer; this is no different from Credit Checker-free financial products. But in many cases, promises and reality are far apart and the interested party should carefully weigh the advantages and disadvantages of the various offers BEFORE submitting the application.

Problems with the Credit Checker as a starting point

Problems with the Credit Checker as a starting point

The protection association for general credit protection, as the Credit Checker is called by its full name, advises practically every German bank, but also other companies whose business model has to do with financing.

For example, when opening a current account and when taking out an installment loan, but also when concluding a cell phone contract or with zero percent financing in the department store, the customer almost always has to give his consent to the transfer of the data to Credit Checker. This means that it knows at all times how many checking accounts, mobile phone contracts and loans a potential customer has.

The initial situation always looks the same: there is a negative entry in the Credit Checker, which was reported by a member company of the protection association for general credit protection due to an unpaid invoice, termination of the current account, problems with the repayment of an installment loan.

Although the entry will be deleted – if at the earliest when the case of sin has been settled – it will usually take years until the affected person is restricted in his or her economic freedom of movement. With an existing negative entry, it is difficult to impossible to apply for a loan or credit card, to open a current account or to get a full cell phone contract.

Looking for a loan without or rather despite Credit Checker?

Looking for a loan without or rather despite Credit Checker?

The reporting on the subject of credit without Credit Checker is characterized by a lot of ignorance, poorly researched half-truths, and numerous, less serious false reports. Even if you should have already “enjoyed” other information, one thing should be said very clearly at this point: The loan without a Credit Checker actually exists.

Even if the applicant has already been rejected several times by the house bank (and other credit banks), there is still a very good chance of getting a loan free of Credit Checker. An existing entry does not in principle stand in the way of granting a loan – the decisive factor is the overall creditworthiness.

A distinction is made between the classic loan from Switzerland at 3,500 dollars (no previous Credit Checker query and no subsequent Credit Checker entry) and the loan despite existing Credit Checker entries at German private banks. You have good chances if a regular income can be proven and there is also the possibility to assign the attachable part of this income to the lender as security.

The lender then has a manageable risk. The income should have been paid for at least three months, the longer the job, the easier it is to get a loan. If there is no working income, the starting position looks much worse. A possible way out is to provide a guarantee from a third party with a good credit rating or a valuable property on which a mortgage in the amount of the loan amount can be ordered.

Financing a car or leasing better?

Financing a car or leasing better?

On the whole, the prices were predetermined, the possibility of financing a car without Credit Checker information was out of the question.

A lot has changed in this area today: within the EU, trade within Europe is largely free and prices have started to move. New car prices differ by up to 30% and when it comes to financing, there is a choice between leasing, loans and long-term rentals with considerable price, condition and performance differences.

A car loan is a usual form of financing a new or used car purchase. Car loans are offered both directly from the car dealership and through the house bank or another bank. It is difficult to grant such a loan and thus the entire purchase of a car if there is a negative Credit Checker entry, but there are still options here.

An interesting alternative, on the other hand, is car loans with a Credit Checker-free form. In principle, this is the loan already mentioned despite a negative Credit Checker with a German private bank. This is fundamental to be regarded as unused, which is why this financing option is also suitable for the purchase of a new or used car.

Despite the attractive offer to pay for the car purchase with such a loan without a Credit Checker, one should exercise caution as a prospect. The banks behind such offers check the applicant’s creditworthiness at least in the form in which the applicant must have a correspondingly high and regular income.

It should be emphasized again that a loan without a Credit Checker from a credit intermediary such as Maxda is not a special car loan. Ultimately, Credit Checker-free financing offers are not earmarked, which is why they can be used for any kind of purchase. In this context, only real car loans from banks can be classified as really earmarked, but – at least in Germany – they cannot be obtained without Credit Checker information.

 

I am in a file of delinquents for a debt that is not mine. What can I do?

The owner of the data can exercise his right to cancel or rectify his personal data by writing to the person in charge of the file of the entity in question.

To be enrolled in a registry of delinquents, it is not necessary that they have claimed the debt judicially, without prejudice to the delay in payment and previous efforts by the creditor to be able to collect what is owed. Of course, the entity managing the file must notify you that it has been included in it, in order for you to be aware of the fact and may request cancellation.

I have been included in a delinquent file for a debt that is not mine?

I have been included in a delinquent file for a debt that is not mine?

Know that you can exercise your right to cancel or rectify your personal data by writing to the person in charge of the file of the entity in question.

The exercise of the right of cancellation or rectification is very personal, which means that the owner of the data must personally go to said entity, unless expressly and in writing by the owner of the data and photocopy of the two DNI (of the owner of the data and your representative) using any means that allows you to prove the sending and collection of your request, for the exercise of your rights, accompanying a copy of your ID The presentation of the identity document can be substituted by the use of the electronic identification signature

What if they don’t answer me? Can I claim the Data Protection Agency?

If you do not receive a reply within 10 business days or if it is unsatisfactory, you can file a complaint with the Spanish Data Protection Agency, accompanying the supporting documentation requesting the cancellation of data before the entity in question.

Attention The cancellation of data

bank

Should not be confused with the request to unsubscribe from a contracted service or with the return of copies of documents or contracts, which is not a matter of data protection.

Consequently, the owner of the data should contact the company or responsible body requesting the right to cancel

Remember that you have the right to be informed of its inclusion in the file and that your data is canceled in the indicated terms. If the person responsible for the file did not comply with the regulations at these points and you suffered any damage as a result of being your data in it, claim compensation for the damages suffered.

Consumer loans – Find the best lender

Most people think that the Fine Bank only works in agriculture. However, this is not the case. This financial institution, which is fully controlled by the government of the Russian Federation, has a number of programs designed for ordinary people. A good example of such products are consumer loans from the Fine Bank.

This organization is starting to grant such loans to people over the age of 18, which is surprising in itself as a very small number of banks agree to work with borrowers under the age of 21. To obtain a loan, the customer must be registered near a bank branch that has more than 1,600 in the country and have at least six months of professional experience at the main office. In order to determine the creditworthiness of the borrower, the income level must also be confirmed. Personal income is sufficient to design the program in most cases, and there is no need to attract co-borrowers.

 

Required paper for registration

consumer loan

Rosselkhozbank consumer credit is issued upon presentation of the following documents:

  • current passport of the Russian Federation;
  • Military map. This document must be submitted before the age of 27.
  • Income certificate in form 2-NDFL;
  • completed application form

For more information, it is recommended to visit the official website presented by the Fine Bank on the Internet. The consumer credit calculator, located on its pages, will help the borrower calculate a convenient payment schedule and the amount of the loan that does not exceed their monthly income. You can also find an online application form here and, after completing it, send an email to the head of the credit department.

 

Types of programs provided

Types of programs provided

Fine Bank consumer credit can be divided into two broad categories:

  1. Goal – Arranged loans to achieve a specific goal that is explicitly prescribed in the contract. In the event of such a loan, the customer can rely on milder conditions that the Fine Bank can provide. Consumer loans, the interest rate of which may not exceed 17%, can be spent on the purchase of equipment or a vehicle, repairs, real estate, education, the purchase of medicines, etc.
  2. Unbound – Loans where the bank has provided the requested amount and is not interested in its future. The interest rate on such a loan must not be less than 18%.

Rosselkhozbank consumer loans can receive up to 5 years. The maximum amount that can be taken is 10 million dollars, but to get more than 300 thousand, the organization will require a guarantee of at least one individual and more than 1 million dollars. – Real estate mortgage property.

Loan application is usually considered in a week’s bank. A financial institution does not charge a commission for providing a loan, which is a big plus when choosing a lender.

Installment loan online, for whom?

An online loan is a solution for people who need a higher sum due to urgent expenses, but their financial situation does not allow them to pay their liabilities at one time. With this option, they can spread the return of cash over a couple or even several dozen months, thanks to which they are easier to cope even with the return of a high commitment. Installment loans were still a domain of banks a few years ago, but with the development of loan companies they also appeared in their offer. Today, most lenders, in addition to traditional payday loans, also offer installment loans online. What are their pros and cons? – you’ll find out in a moment.

Who can get a installment loan?

Who can get a installment loan?

In fact, any adult person with citizenship can apply for this type of commitment. Lenders do not place high demands on their clients because it is one of the safest types of loans. Due to the fact that the repayment is spread over time, the installment to be paid each month, even with large sums, is not huge. Therefore, a non-bank loan via the Internet is suitable even for people with a very difficult financial situation, because even they are able to pay back large amounts on time.
These types of loans are especially for people who have a random accident, such as a broken washing machine, a car breakdown or forced renovation. In this case, you immediately need a large sum of money, which not everyone has. Installment loans allow you to receive the cash you need and also to repay it peacefully.

Advantages and disadvantages of installment loans

Advantages and disadvantages of installment loans

The biggest advantage of installment loans is that repayment is spread over a longer period of time, which makes it easier to pay back the debt on time. However, this also involves a higher total cost of loan than payday loans for 15 or 30 days. And all this because of the interest, which by definition depends not only on the amount of the liability, but also on its length. Despite the fact that the annual interest rate is lower for installment loans than payday loans, in the final settlement the total cost is higher because the liability is spread over a longer period of time. The indisputable advantage of installment loans is the fact that it is not difficult to get them and you can apply for much higher amounts than for payday loans. Sometimes, when a really big cash injection is needed,

What repayment period should you choose with an installment loan?

What repayment period should you choose with an installment loan?

As was explained in the previous paragraph, the longer the period, the greater the total cost of the liability, so it makes no sense without the need to extend repayment over time. However, on the other hand, it is worth taking care of your financial security and you cannot commit to repaying the loan too quickly, because it may result in defaulting, which in turn will involve additional fees. That is why it is worth spending a moment before sending the form on the home budget analysis to best match possible loan installments to your options.

Installment loan – what should you pay attention to?

Installment loan - what should you pay attention to?

As with any other commitment, you should carefully review the terms and conditions of the installment loan in your company. Often, portals attract customers with a low interest rate or zero commission, but most such offers have a catch. If the interest rate is unbelievably low, it means that the commission will probably be excessive. Therefore, in order to avoid unpleasant surprises, it is worth very carefully, line by line, to trace both the data on the lender’s website and the contract he offers.

 

Collective microcredit: discover this type of social investment

Collective microcredit is the meeting of crowdfunding with microcredit. It fits into the crowdlending logic as an innovative tool for low-income people to finance their projects. On the one hand, is someone who needs a loan and on the other is one or more people, willing to finance the project.

Good Finance is the first collective microcredit platform in Brazil. You can become a social investor (Hero Good Finance) with values ​​starting at R $ 25.

Crowdfunding

bank

The English term, literally means: crowd funding. It is a valuable tool to leverage a project and has existed in Brazil since 2011. The proposal is to use the internet to disseminate the details of the development of a project and to raise the necessary capital to carry it out. On the other hand, Internet users access the content and decide whether they want to help make it viable, contributing money. There are four types of crowdfunding:

  1. Collective donation financing – In this modality, the only reward is knowing that it has contributed to a greater good.
  2. Reward crowdfunding – Supporters receive products or services developed by people who have decided to help.
  3. Equity crowdfunding – The supporter, also called an investor, receives a percentage of the company that is asking for financing.
  4. Collective loan – Supporter is also seen as an investor because he receives financial income (interest) on his loan.

Microcredit and social impact

Microcredit and social impact

Microcredit was invented in the 1980s as a credit modality aimed at low-income people and earned a Nobel Peace Prize for its creator, Muhammad Yunus. Practiced with low interest rates, the idea of ​​microcredit is that, by making credit accessible and fair to everyone, we will build a better world, without poverty in the future.

To give you an idea, 120 million people live on less than the minimum wage in Brazil. However, together they handled around R $ 800 billion in 2010. More than 60% of the Brazilian population is in the CDE classes and 40% of these citizens do not have a bank account, according to a study by the CDE Plan in partnership with FGV. 80 million people are excluded from the financial system and from all the opportunities that this system brings, but microcredit has the potential to reverse this scenario.

This is the target audience for microcredit. Giving access to capital for those at the base of the pyramid is an open door to social impact. When directed at entrepreneurs, microcredit further increases its potential for impact. To embrace this cause means supporting access to financial services, the generation of decent jobs, entrepreneurship and so on.

Find out more about what Good Finance did in 2017 and what are the expectations for 2018.

The problem to be solved

Motivated by a mixture of opportunity and need, almost a quarter of the Brazilian population, which is at the base of the pyramid, undertakes. There are more than 25 million micro entrepreneurs spread across the peripheries and slums of large and small cities that face a daily battle to maintain and grow their own businesses.

Traditionally, when a micro-entrepreneur needs a loan to invest in his business, he goes to the bank and ends up facing a discriminatory environment, high interest rates (4% per month on average), and a complicated bureaucracy that prevents him from evolving.

The solution: collective microcredit

Brazil is full of microentrepreneurs who want to invest in their businesses, but are unable to obtain financing in the traditional way. The solution is to decentralize capital. This is possible through a collective microcredit platform. Now we don’t have to go to the bank to ask for a loan anymore, we can do it through Good Finance. Entrepreneurs can raise up to R $ 15,000 to invest in their business and on the other hand, social investors can start with values ​​starting at R $ 25.

How does Good Finance work?

The mission is to provide access to fair microcredit for low-income entrepreneurs. But there is a curatorship before, not all entrepreneurs can be financed by the network. First, the entrepreneur must be appointed by a strategic partner who works with entrepreneurial training.

Then he must answer a financial profile questionnaire and send documents that prove the financial health of the business. Once approved, start your campaign.

What are the benefits for the entrepreneur?

What are the benefits for the entrepreneur?

– A fair way to get credit: without discrimination, cheap and without bureaucracy.
– Loans up to R $ 3,000 have no interest.
– Loans from R $ 3,001 to R $ 9,000 with interest of 6% per year.
– Loans from R $ 9,001 to R $ 15,000 with interest of up to 12% per year.
– Financing can be paid up to 24x and has a grace period of 1 month.
– An administrative fee is charged to Good Finance of up to 10% of the total amount collected in all campaigns.

What are the benefits for the investor?

– Make a social impact investment, which will support the development of microentrepreneurs and the improvement of their quality of life.
– Receive the money back with income above savings.
– Receive reports on the evolution of the entrepreneurs and the impact generated by the financing.
– All this without leaving home.