Category: Credit

To replace credit with another credit

by Carla Lyons

If you have different loans at different institutions, you should consider whether a complete debt restructuring to only one bank is an advantage.

Keep track with just one loan

In the course of life it can happen that you have to take out various loans and make purchases on installments. If the repayments are planned for the long term, you have to pay off several monthly repayments at some point. It can quickly happen that you lose track of things or fall behind with payments if your life situation changes.

A simple solution is then to reschedule all of your outstanding loans to just one bank, i.e. replace the previous loan with credit. This gives you a better overview of the total debts that you still have and is only owed to one creditor.

Save money with debt restructuring

A particularly favorable offer, especially with regard to interest or repayment terms, can make rescheduling meaningful. So much money can be saved by lower interest rates. But it is also advantageous to set the monthly installments, which are adjusted to new living conditions, for example by a longer repayment period and therefore lower monthly installments than before.

When you redeem a loan with a loan, it is usually the case that the individual monthly installment is lower than the sum of the installments for many different creditors.

Conditions for loans

If you are considering the option of redeeming a loan with credit, you should inform yourself well beforehand. There are many different credit institutions with different terms. Definitely compare interest rates, term, fees and flexibility. Think about the future and whether you can meet your commitments by the end of a loan agreement. 
Check whether you meet the requirements for debt restructuring.

With reputable credit institutions you always have to provide proof of your liquidity, usually a confirmation is required that you are in permanent employment. The amount of net wages and other financial obligations must also be taken into account, after all, a credit institution needs the certainty that it will get borrowed money back.

Don't go lightly on a loan with particularly low interest rates. The overall package is crucial. Inquire at several banks and get advice from a specialist. Compare in peace until you are sure that you have received the right offer.

Works credit: assess your borrowing capacity

by Carla Lyons

Transform the garage into a studio for the older child, redo the kitchen, add a bathroom for the children ... The evolution of the family or a new financial ease allow us to consider a work credit for the house. However, this loan works, like any credit, must be repaid. Hence the importance of assessing your borrowing capacity before borrowing $ 5,000.

Evaluate your borrowing capacity for a construction loan, why?

Evaluate your borrowing capacity for a construction loan, why? Requirements for a construction-to-permanent loan include a down payment of at least 20 percent of the estimated mortgage. While the home is being built, a homeowner only pays the interest on the outstanding balance. Private lenders may offer construction loans to qualified borrowers with a 5 to 10 percent down payment requirement. Government-backed loans are available with as little as zero down.  Construction loans are very short term, generally with a lifespan of one year or less.

Borrowing $ 1,000, or even going as far as borrowing $ 10,000, requires being able to assume the repayment of this loan every month. Especially that a work credit often turns out to be substantial. The lending institution will therefore help the borrower to assess its monthly repayment capacity based on its income and expenses. It is these monthly payments, as well as the desired loan duration, which will determine the amount of credit. The calculation of the borrowing capacity for this works credit is the starting point of the project.

How to calculate your borrowing capacity?

How to calculate your borrowing capacity?

Without being legally regulated, the limit on the debt ratio accepted by financial institutions is 33%. The debt ratio is calculated by making a ratio between the income of the borrower of the loan and the charges or other loans that he must assume. For a person who receives an income of $ 3,000 monthly and who repays a mortgage up to $ 650, the debt ratio is (650/3000) x 100 = 21.67%. He then has a borrowing capacity of 33 - 21.67 = 11.3% of his income, or $ 339. This amount is the key element in assessing the amount allocated to the work.

Also assess your borrowing capacity through a simulation for your cheap work credit.

Credit despite bad credit history or payment

by Carla Lyons
If the credit rating is poor, this makes it extremely difficult to borrow. Because then you can't just go there and take out any loan on excellent terms. Even if this is exactly what the advertising suggests. If you have a bad credit rating, you are not creditworthy and therefore very quickly stands in front of the closed doors of the banks. Because banks and savings banks only want solvent consumers as customers. No matter whether it is taking out a loan or opening an account. Now it happens again and again that despite bad creditworthiness, a loan is absolutely necessary. Perhaps this was supposed to eliminate the debts that led to the bad credit rating. Or it should be invested in the future, so that with a better income the bad credit rating can be a thing of the past at some point.

It will not be easy

It will not be easy However, since banks are not enthusiastic about lending a loan despite their poor credit rating, borrowers find it difficult to find good deals. There are various offers that advertise a loan despite poor creditworthiness. But usually you can assume that these are not serious and in the end only lead to the debt trap. Because mostly windy business people are behind it who only want to sell their insurance to the man or the woman and ultimately don't offer any loans at all. It is therefore advisable not to consider such offers in the first place and much rather to ensure that a second borrower accompanies the taking up of a loan despite poor creditworthiness. This can ensure that taking out the loan is still possible at a regular bank at worthwhile conditions.

Creditworthiness that the banks want

Creditworthiness that the banks want In the best case, the second borrower brings with it exactly the creditworthiness that the banks want for a loan. So you are always on the safe side and can choose the best loan from a pool of loan offers. Despite all of this, you should never forget that your credit rating is not good and that there are reasons for it. The loan should therefore only be taken out in spite of poor creditworthiness if it is really needed and if you can also afford the loan. Financing a relaxing holiday with a loan is not a good plan. Summarizing debts and eliminating them in this way is a very good plan. Because it helps to take a decent path again and to have a better life in the long term. And this should always be the goal if you want to take out a loan that shouldn't actually come about due to the poor credit rating.

Social micro-credit – where to obtain?

by Carla Lyons
Social microcredit, also called personal microcredit, is thought to improve the living conditions of individuals who cannot access the traditional bank loan. What principles is it based on? Who can claim it? Which address? Younited Credit, a pioneer in the online personal credit market in the country, tells you all about this device.

Social microcredit: decoding

Social microcredit: decoding Social microcredit is a form of personal loan. Partially guaranteed by the State and the lender, its interest rate is reduced. This credit is reserved for people excluded from the traditional banking circuit due to a fragile professional situation or modest income. Indeed, in the event of financial difficulties, a request for bank credit is very often the subject of a refusal. The absence of a guarantor is an additional reason for exclusion. Personal microcredit can for example concern:
  • people on fixed-term or temporary contracts;
  • people in seasonal or part-time employment;
  • unemployed people;
  • withdraw;
  • people receiving minimum social benefits;
  • people victims of a life accident (disaster, illness, etc.);
  • persons registered in the Personal Credit Repayment Incident File (FICP), who cannot take out a new bank loan;
  • persons registered with the FCC (Central Check File).
The repayment of such a loan can be made over a period of 6 months to 4 years, or even 5 years in certain situations. In all cases, the repayment capacity must be sufficient for the loan dossier to be accepted.

A microcredit, for what rate and for what maximum amount?

A microcredit, for what rate and for what maximum amount? Social microcredit is a small loan. The latter is adapted to the borrower's situation. It is generally between 300 and 5,000 $. However, in certain cases, the bank can grant a microcredit for a higher amount. As for the borrowing rate, it is most often of the order of 1.5 to 4%. Note: what other fees for a microcredit? Apart from the borrowing rate, personal microcredit comes with no fees. There are no administration fees, insurance costs or even compensation in the event of early repayment.

What project can I finance with social microcredit?

What project can I finance with social microcredit? Social microcredit cannot be used to finance any type of project. The objective of this system is to promote banking inclusion, but also and above all to encourage social integration, professional integration, and to improve family life. To be eligible for microcredit, the applicant must have a personal project related to this. Among other things, this credit could be used:
  • for mobility purposes for the maintenance, return or access to employment (purchase or repair of vehicles, financing of driving licenses, in particular);
  • to finance basic necessities (washing machine, furniture, etc.);
  • to cover funeral expenses;
  • to finance poorly reimbursed health costs (dental prostheses, hearing aids, eyeglasses ...);
  • to finance studies;
  • to finance vocational training.
Good to know: what is the difference with professional microcredit? Professional microcredit is not intended for individuals. It is intended to finance a business creation or takeover project. However, the repayment of other loans and the repurchase of debts are among the exclusions.