Early repayment of financing: how much do you pay?

The early repayment of financing is a transaction that can be carried out in relation to the credit lines subscribed to be able to realize personal, family and professional expenses. However, before approaching this kind of initiative, it is opportune to try to know which are the clauses and the rules that underlie this possibility referred to the debtor and, in particular, what are the economic conditions that regulate an eventuality of this nature .

When is it possible to proceed with early repayment of the loan ? And how much do you pay?

When is it possible to proceed with early repayment of the loan ? And how much do you pay?

First, let us remember how anyone who has turned on a loan has the possibility of being able to return the sum obtained even before the natural expiry of the loan. The early repayment of financing is therefore an alternative method of reimbursement than the ordinary one , which provides for the termination of the relationship through the observance of an amortization plan that provides for the gradual return of the capital and the interests, according to the methods that are established in the internal contract signed with the financing institution.

However, the possibility of early repayment of financing is not an extraordinary right granted to the debtor, indeed . In all loan agreements, in fact, the possibility of the debtor being able to pay off all or part of his debt prematurely, at conditions and characteristics that will be governed by the same contract, is well explained.

Cost of such early repayment

Cost of such early repayment

In this context, it is of interest to find out what the cost of such early repayment is. With regard to mortgages, the charge was canceled by the so-called Bersani decree, which canceled the penalties for mortgages for the purchase or renovation of the first home. For other cases, including personal loans, the penalty continues to exist, although limited – in most cases – to 1% of the capital yet to be repaid. Given that there could be significant differences depending on the lender, our advice is to carefully consult the signed loan agreement.

With regards to the way in which it is possible to proceed with early repayment, we recall that this is generally linked to a prior request to be made against one’s own bank, in which the date on which it is deemed to be possible to proceed with the termination of the report: a preventive step that will allow the bank to calculate with certainty the total to be paid for the extinction of the credit relationship, and that also applies in the case of partial extinction (with the amortization plan that will continue in installments of a reduced amount, proportionally to what extinct).

Remaining amount

Remaining amount

The payment of the remaining amount can be made by bank transfer or, alternatively, a bank draft. In this second hypothesis, however, it will be necessary (especially in the case of the bank check, while for the circular the benefits could be made) to wait for the time necessary for the bank to verify the solvency of the credit title negotiated.

However, it is given that each lender has different rules to that effect, if you intend to proceed to ‘early repayment loan is a good idea to discuss it ahead of time with your consultant and reference, below, follow the signs agreed.

What is the deposit guarantee fund?

Unfortunately, the deposit guarantee fund is a term that has become familiar in recent times. And we say “unfortunately” because its popularity has been associated with the recent economic crisis and the fear, in many cases unfounded, that some savers have experienced to lose their bank funds, which in turn could have as a consequence a ‘corralito’ (the massive withdrawal of cash from banking entities). In this article we tell you exactly what is the deposit guarantee fund, what is its origin and function as well as the importance of a key economic concept: solvency.

Deposit guarantee fund

Deposit guarantee fund

The deposit guarantee fund is an account created at the Bank of Spain by banks, savings banks and credit cooperatives whose objective is to ensure that customers of a bankrupt bank can dispose of their money up to a certain limit. . This balance limit, as in most European countries, is 100,000 euros. Which means, in other words, that if a bank goes bankrupt, its customers are guaranteed deposits up to 100,000 euros. If the client had a bank balance higher than those 100,000 euros, he could not recover the difference.

However, it is a security mechanism that has been endowed by banks and the Spanish State itself, and in recent history has not needed to ‘dip into’ it. Therefore, there is still no experience on how this deposit guarantee fund, which was born in 1977 and which has been strengthened economically and administratively in 2008 and 2010, would work and respond, when the limit of the guaranteed amount was extended and when it was extended. reinforced its role within the framework of the Fund for Orderly Bank Restructuring, known as FROB.

Deposit and solvency guarantee fund

Deposit and solvency guarantee fund

A concept that is closely related to the deposit guarantee fund is that of solvency, which is the ability of a bank to meet all its obligations in the medium and long term and to assume the risks derived from its own activity. It is something very measured and monitored by European economic institutions, which calculate a capital ratio. At the Spanish level, the Bank of Spain supervises the behavior of the country’s entities, although the highest authority in this regard is the European Banking Authority (EBA), which sets the guidelines and conditions to be followed by the Bank entities.

With regard to microcredit companies, the law does not include these in the list of entities that must undergo solvency and stress tests. However, the economic capacity of a company is essential for its own credibility and to offer confidence to its customers. In the case of Best Credit, the best presentation letter is his own statistical data: more than 331 million euros loaned up to this moment in more than 610,000 credit operations transacted. In addition, it has a recognized experience in European countries such as the Czech Republic, Slovakia or Poland, and has already extended its services to others such as Mexico or Argentina.

In addition, the reliability of Best Credit is given by the selection of his collaborators: through our website you can get in touch with prestigious and solvent lenders, who count in turn with enough financial support to develop the work of granting mini-loans online These fast lenders, in addition to being solvent, have this way of liquidity (ability to cope with short-term obligations) necessary to operate in this sector.

Risk management in Best Credit

Risk management in Best Credit

Another important concept that is related to solvency and liquidity is risk. One might think that the economic operations that are transacted through Best Credit involve greater risk for the lenders, since in many cases credits are granted to people registered in lists of defaulters as ASNEF or who do not have a fixed payroll at that time . However, this risk is always under control, especially due to the fact that they are low-value loans, little compromising for the lenders.

In Best Credit, you can request and process online loans that do not exceed € 750 , which is a sufficient amount to meet many daily and professional expenses but can not be considered a major operation. On the other hand, an important factor is the return period, very short: between 1 and 30 days . This is in favor of the liquidity of the lenders, who see how the amount of their credits and therefore of their economic funds are always restored in a short period of time.

Dispo credit vs. Online Loan: Seize Opportunities and Avoid Risks

According to statistics, every bank customer deposits at least once a year. The interest rate of a covered disposable is in the double-digit range. What the banks are happy about can have fatal consequences for the consumer.

  • But what is behind the system?
  • How should it be used and which alternatives are available when?

The Small Lender Guide answers the most relevant questions about the issue of credit.

The credit line: conditions and conditions

The credit line: conditions and conditions

What forms of disbursement exist?

The credit line is a tolerated form of overdraft and represents a subspecies of the current account credit . Two types are distinguished:

  • Credit line with cover letter: a statement of approval by the bank is issued)
  • Debit credit with bank statement: The bank declares the authorization with a printout on the account statement

The bank always declares the upper limit for both options. This indicates up to what amount funds are made available. If a disposition granted is 1000 Euro, an account holder may continue to make payments and withdrawals even in the absence of credit until this limit has been exhausted.

Under which conditions do customers receive a credit line?

The banks are tied to the awarding of a disposit specific conditions. In addition to the age of majority of the applicant, the account holder may not have negative entries in the Bank . Only in exceptional cases do banks grant a system of disposition in spite of Bank, along with a fixed income . These can be salary arrivals, but also pension payments as well as income from letting and leasing.

 The interest rate of a covered disposable is in the double-digit range. What the banks are happy about can have fatal consequences for the consumer.

Salaried employees and civil servants usually do not have any problems obtaining a credit line if they are sufficiently creditworthy.

Retirees reduce the monthly cash receipt, which is why an existing credit line may be reduced. However, if an emergency loan is applied for at the time of retirement for the first time, it may be that there are problems on the part of the bank, as the age is taken into account.

Unemployed persons who had a postponement before losing a job often receive a notice from their principal bank or a clear grading of the available frame.

On the other hand, recipients of unemployment benefit II have no chances. Housewives also receive no credit line from most banks. If so, the amount granted is small or the spouse is added as another account holder. On the other hand, the situation for students is better. Here there are financial institutions that issue a credit line in the form of student accounts. Prerequisite, however, is a regular salary receipt from a student part-time job . The self-employed and freelancers are strictly speaking out of the ordinary, since there are no regular or fluctuating revenues. But not every bank sets the standards so strict.

Get a Dispo:

  • Employees in a permanent employment relationship
  • Officer
  • Pensioner with a sufficiently high pension

Under certain circumstances, receive a disposition:

  • Pensioners on first application
  • Students with regular income
  • Freelancers and self-employed
  • Housewives and housemen with spouse as co-owner of the account

Do not receive a dispo .:

  • Recipient of unemployment benefits

Which conditions and conditions usually apply to a credit line?

Each bank customer receives a credit line on the current account, provided creditworthiness is given. This means that there must be a regular salary receipt on the account and no negative Bank entry . Here it is worth checking the Bankakte, because the Bank score can be improved. Some banks set up the MRP automatically when opening an account. Who does not want that, must contradict that. The possible loan amount is clarified individually, and some banks set up a disposition up to three times the monthly net salary.

What are the advantages and disadvantages of an emergency loan?

The advantage of a credit line is that no cumbersome loan applications must be made , but it is possible at any time in the given context to overdraw the account. Collateral does not have to be deposited. If there is a shortage due to special issues at the end of the month, financial liabilities can still be met. A separate repayment does not take place, the sum of the Dispos is charged with the incoming funds. In addition to the accrued interest, no additional fees may be charged by the Bank. The financial institutions charge the interest a maximum of every three months . This is calculated on a daily basis. For example, if you only use the credit line for five days a month, you will only pay interest for that period. If the loan amount changes, the adjustment also takes place on a daily basis. A disposition is usually based on the amount of monthly cash receipts in the account . If no other loans are taken out, the debt burden remains predictable and can not increase to an immeasurable degree.

A big disadvantage with a Dispo is the interest rate , which is clearly higher than with a installment loan . It is not recommended to claim a credit line over a longer period of time. In addition, a credit line requires careful management. Although there is a limit, but who continues to bolster his Dispo and other credit commitments, can slip deep into the red. It can take a long time until the account is back in the plus, which is also due to the high interest rates. In addition, a certain habituation effect can occur with a credit line. If the disposition is further exaggerated, the banks charge special default interest , which is higher than the regular disbursement interest . Even by the notice period of 30 days may be disadvantages. A termination without notice is only possible with good reasons. If the financial circumstances of a borrower deteriorate or a foreclosure is initiated, the banks can claim the sum owed immediately .

House bank or third-party bank: differences, risks and opportunities

The credit line at the house bank is expensive due to the high interest rates. Loans from external providers have the advantage that they have to be repaid within a fixed period of time and, in contrast to a credit line, can not be increased. The danger of reaching the financial limit is smaller. It pays to compare the terms of the individual foreign banks.

What conditions apply to the termination and replacement of a credit line?

A credit line is indefinite . Fixed repayment rates are not agreed, the account holder determines for himself, when he is back in the Plus. If money is received, the entire dispo or parts of it will be automatically deducted. This brings a very high interest burden, especially if it is not foreseeable that the entire coating can be removed quickly. In this case, it is recommended to balance the overdrawn account with a installment loan . The respective bank advisor will be advised on this rescheduling. An installment loan can also be taken out with another loan provider in order to trigger the credit line on the checking account in one go.

Is a credit line seizable?

A credit line can only be seized if the borrower uses it . This is the case, for example, when withdrawing cash, claiming the disposition and paying a creditor. If banks become aware of a seizure, the approved credit line is often withdrawn. This is to avoid that the banks go out in the insolvency of the debtor empty. If the account holder uses a credit line on the arrival of an account attachment, the bank stops further use of the system and asks the customer to repay the loan. Because only money can be seized, which also exists real.

The online loan – forms, conditions and conditions

The online loan - forms, conditions and conditions

Which forms of online credit are there?

There are plenty of online credit providers. Most offers are ordinary installment loans or consumer loans. The online loan is requested exclusively via the Internet from so-called direct banks. Some of these financial institutions specialize in certain types of loans , others target certain audiences.

The following forms of online credit are available:

  • Installment or Consumer Loan: Most online banks offer loans starting at $ 1000
  • Mini or small loan: For small financial bottlenecks can be easily borrowed between 100 and 500 euros
  • Sofortkredit: This loan is characterized by an extremely fast approval and a transfer of the desired sum often on the day of application
  • Assigned loans: These loans are used to purchase certain things, usually to buy a car. This bond can often be granted more favorable terms
  • Overdraft: current accounts, which are concluded with the direct banks also have a particular scheduling frame

Online Credit: Opportunities, Risks and Conditions

By eliminating branches online banks have less cost and can offer cheaper loans. They pass on this advantage to their customers . In order to receive a credit line at an online bank, a checking account must be opened. The account management is often free and often the interest rates are lower. However, the general conditions are similar to those of stationary banks. The Bank score is queried and income proofs are required to classify a customer as creditworthy.

The following factors determine whether applicants receive an online loan:

  • Occupation and monthly income
  • Financial liabilities
  • Financial or material collateral, for example in the form of homeownership
  • Amount of credit
  • Purpose of the loan
  • Type of loan

The documents to be submitted when applying for an online loan depend on the professional group . As a rule of thumb, applicants must submit the salary statements of the last two to six months in addition to the application form. Retirees submit their pension notice analogously. The self-employed and freelancers must submit divergent documents that differ from bank to bank. This can be the business evaluation, the income / surplus calculation or the profit and loss account. Some of the online banks offer special student accounts that have a small credit line. But here, too, evidence of regular income must be provided.

The short-term loan with short maturities

When the financial shortage is short, the high interest rates charged on a credit line can be elegantly bypassed with a short-term loan. Small Lender offers to lend between 100 and 3000 euros. The repayment is made in a monthly rate or a maximum of six monthly installments. The annual percentage rate is 13.90 percent. If you repay your short-term loan in a 30-day installment, you only have to take a twelfth of this interest rate into account. Assuming creditworthiness, processing takes place so fast that the payment can be made on the same working day if the express option is booked. Small Lender also grants small loans to the self-employed.

Debt credit and online credit: advantages and disadvantages

Debt credit and online credit: advantages and disadvantages

What are the main differences between the two forms of credit?

The online installment loan is an agreed loan with a fixed monthly installment and a fixed term, which is usually between 12 and 84 months for a consumer loan. Small loans have a correspondingly shorter duration. The credit line, however, is not fixed in time. Also, an account owner does not have to use it, it only provides the opportunity to be liquid again in the event of a bottleneck until the next cash receipt. In addition, there is no monthly installment for a credit line. It concerns only an extension of the disposition frame with an existing checking account.

For whom is an online or credit loan recommended?

The extended scope of a credit line can cost a consumer dearly. This is especially the case when the MRP continues for months at a significant height and is no longer returned. The debit interest exceeds the interest cost of a normal installment loan by three to four times . If the credit line is used once and then immediately returned, no problems arise. For longer-term credit seekers with a regular income should definitely think about a rescheduling and thus a regular installment loan .

What can be financed with an online or credit loan?

A credit line is not earmarked. It can be used for a larger purchase or a holiday as well as for bridging a short-term financial bottleneck . The limit of a maximum of three net monthly salaries must be observed. Due to the high interest rate, an installment loan is recommended for larger purchases. Not least because the principle of fixed rates makes finances more predictable.

Conclusion

Conclusion

Once set up, a credit line is very convenient and with no administrative burden. Since the interest rates are very expensive, it is not advisable to use for long periods . If a large balance has accumulated and there is no financial margin left, a rescheduling in a installment loan is recommended. The most important criterion in a credit rating comparison is the interest rate that the bank estimates. Anyone who is thinking about changing their account-holding institute should therefore always take a close look at the dispozins.

Low earners: information on the low-income earner, subsidies & taxes

According to the Federal Statistical Office, about 20 percent of all employees in Germany earn an income that is only just above the poverty line. However, there are some differences between low-wage earners and low-income earners. What exactly is a low-income earner? Do taxes have to be paid in this income class? What about side jobs and government grants? This guide provides all important information.

The importance of low income

The importance of low income

What is meant by a low earner?

The term low income is ambivalent, because it must be distinguished between the low-income earner in general parlance and the social security law aspects in the definition of the term. In everyday life, but also in the language of politicians and authorities, means low income employment, which is rewarded with less than 9.00 euros per hour . Often workers in the hairdressing or retail trade are affected by low earnings. As a result, around 20 percent of employees in Germany are low-income earners. Interns also belong to this group. Low-wage earners are by no means exclusively unskilled workers. Low income with no prospect of a salary increase also affects people who have completed their education or studies.

The social security law clearly defines low-income earners in. § 20 Abs. 3 SGB IV as: “insured persons, who are employed to their vocational training, to achieve a remuneration, which does not exceed 325 euros per month , or insured, which a voluntary social year or a Voluntary ecological year within the meaning of the Youth Voluntary Service Act or a Federal Voluntary Service under the Federal Voluntary Service Act. “

By law, a low-income earner is

  • Apprentices and trainees who receive a maximum of € 325 salary per month

These low earners are not to be confused with marginally employed in so-called mini jobs, which are paid a maximum of 450 euros per month.

The term low income is ambivalent, because it must be distinguished between the low-income earner in general parlance and the social security law aspects in the definition of the term.

The current earnings limit

The current earnings limit

Applying the definition of social security for low paid workers, the group leaves trainees and trainees who earn a maximum of 325 euros a month. They are thus exempt from their own social security contributions , which means for the trainee the simple equation gross = net. If the training allowance is higher, corresponding levies are paid.

What should low earners pay attention to in a side job?

What should low earners pay attention to in a side job?

Many trainees increase their apprenticeship through mini-jobs. A part-time job during the training is generally allowed, unless the employment contract specifies otherwise. The employer must be informed about the secondary activity and can prohibit it if he fears that the achievements of the trainee will be negatively affected. A side job with a rival company, the employer must also not tolerate for adults is the non-compete. The working time of the part-time job depends on the number of hours to be worked in the training occupation. If you are not yet 18, you can work 40 hours a week according to the Youth Protection Act. For adults, a maximum of 48 hours per week and six working days per week are allowed.

social security contributions

Below is an example of how the contributions are shaped when the low-income earner takes on a mini-job in addition to the training.

Example: A trainee with a mini job

A trainee earns 300 euros a month in the first year of apprenticeship. At the weekend, she also goes to waiters, for which she receives 250 euros a month. The training is considered as her main job requiring insurance. Training fee and mini-job are not added to a total salary. The mini-job as a waitress is insurance-free in all insurance branches. The lump-sum contributions to the pension and health insurance, which accrue for the Minijobber, must carry the employer of the mini jobs. For a longer-term loss of work special provisions apply to the receipt of sickness benefit.

Special payments for low earners: Where are the limits?

Special payments for low earners: Where are the limits?

Donations such as Christmas bonus or holiday pay quickly exceed the low-income threshold of 325 euros per month. Anything that exceeds € 325 will be used to contribute to social security. In this case, employers and employees alike have to pay. Since 2015, the legal basis for one-time special payments has been extended. In the case of a one-time special payment, an employer must pay the supplementary contribution to the statutory health insurance fund, regardless of which health insurance company is involved and whether it makes any contribution at all.

The low-income threshold is relevant for the period of the vocational training or internship. The employer has to pay the employee shares in this concept. He may not deduct or withhold these costs from the trainee’s wages. Those who are not in vocational training are not exempt from these levies. If the salary is € 325 or less a month, it is a mini job . Mini-jobbers remain non-contributory in employment and long-term care insurance, although they have been compulsorily insured in the pension insurance since 31.12.2012.

The low earner and his marital status

A change in marital status is of no importance to low earners during training . For the trainee, gross value = net even after the marriage. The only thing that changes with married people is the tax code. In tax class 1, which includes unmarried, childless apprentices, payroll taxes start from an annual income of 8,820 euros.

Grants by employers

What contributions does the employer have to make to low paid workers?

If the limit for low earners of 325 euros is not exceeded, the employer must take over his own share of the social security contribution and that of the trainee. Also to be paid by employers is the additional contribution in health insurance . Even with this low pay there is a compulsory insurance in one of the statutory health insurance. If the trainee is underage and thus insured for free through the parents, a separate membership in the health insurance is required.

Note Until 2014, the additional contribution in health insurance was set at 0.9%. In 2017, the additional contribution is 1.1% and for 2018 a slight decrease to 1.0%.

Under certain circumstances, the employer must additionally pay the supplementary contribution for childless persons in the social care insurance in the amount of 0.25% . In the “Law on the consideration of child raising in the contribution right of the social care insurance” , known as the Child Allowance Act, the contribution surcharge for childless persons amounting to 0.25% was introduced on 01.01.2005. Usually this is done by the worker alone.

How to get Real Estate Loan from Abroad as a Frenchman?

 

In order to take out a loan from abroad, you must take several steps and certain conditions must be respected. You must consider the legislation in force in the country in which you reside and opt for certain guarantees.

A loan from abroad is possible if:

  • You want to buy a property from a country other than France
  • Looking for an attractive rate available in French banks
  • You buy a property located in France

However, you must be in agreement with the law and not only look at the mortgage rate offered to you.

 

Legislation on foreign loans

Legislation on foreign loans

The law is not the same for all countries regarding non-resident mortgages. As a general rule, the law that is applied to obtain a loan is that of the country where the bank is located, which is why it is important to know which bank to choose and therefore the law that will apply. .

In some countries, such as Germany, early repayment can not take place before ten years. In addition, if a loan is denominated in a currency outside the euro zone, a revaluation clause must be included to cover the exchange rate variation.

The Scrivener Law (10 January 1978) on information and consumer protection for lending operations can be applied. This law protects the borrower and co-borrowers, it targets consumer loans and real estate work obtained by individuals for a period of more than 3 months and an amount ranging from 200 to 75,000 euros.

Foreign loan simulation

European legislation protects the borrower

European legislation protects the borrower

Signing a loan abroad can be done with a financial institution or a mortgage broker, this support is done with European standards that can reduce the risk of unpleasant surprises. It is important to know what the Annual Percentage Rate is:

The APRC defines the overall amount of a loan abroad over a repayment period. This scheme targets loans with interest granted by individuals and professionals ranging from 1,000 to 80,000 euros with a repayment of more than one month. The Global Effective Rate (TEG) is an important variable for a loan offer abroad.

The APR makes it possible to compare different offers, the creditors must inform the borrower abroad in a transparent way, the rates must not be erroneous or exceed the rate of wear.

Guarantees and guarantors for a loan abroad

Guarantees and guarantors for a loan abroad

The lending organization granting you international credit may ask you for a money back guarantee. Guarantees can be:

  • IPPD: Registration of the Denominator Privilege
  • Deposit with a guarantor
  • A mortgage of the good bought with the loan obtained

The IPPD is not used in all countries, it is therefore necessary to know which law is subject to the credit so that the lending organization can benefit from the registration of the Privilege of Denier of Deniers, even if it is present in the ‘loan agreement.