Easy Money Loans – Fast And Easy Ways To Lend Cash Online

Easy money loans are the most popular kind of unsecured loans. There are quite a number of these loans available in the market. It is an unsecured loan, which means that there is no security attached to it. The simplest definition of easy money is that it is used to make quick and effective purchases without any financial backing. Loans are often used as emergency loan options when credit cards are not working well enough or cash advances don’t pay off the money to the user in time.

Rate for easy money loan may vary

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Easy money loans have a high rate of risk to the lender because of the fact that they do not offer any guarantees. However, they can provide instant cash and are the best way to deal with money in difficult circumstances. These loans are also available through the internet.

The interest rate charged is an important part of the rate. The rates for easy money loans can vary and also the terms and conditions. It is very common for easy money lenders to charge a higher interest rate than conventional loans. The lower the rate of interest is, the higher the risk is to the lender. Of course, the borrower needs to look at the APR (Annual Percentage Rate) and compare it with other rates available on the market. APR is often used as a gauge to compare rates because the rates differ from lender to lender.

Complicated money loan on lenders

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There are many advantages of easy money loans. Easy money loan providers work with high credit ratings and therefore the risk factor is reduced. Also, borrowers can also get their requirements fulfilled much quicker with easier money loan providers than traditional ones. Most easy money lenders can get approval in seconds. Due to the popularity of this kind of loan, they are available online. These online lenders offer customers with flexible payment terms and a low rate of interest on quick loans.

The disadvantage is that there is a lot of paperwork required for this kind of loan. This makes it more complicated and time consuming. Lenders are sometimes reluctant to offer such loans to people who do not have good credit records. There are a number of easy money loan providers that work online. The reason for this is that these online lenders have the resources to provide quick and effective loans to customers. It is very important to compare rates offered by different easy money loan providers. The easiest way to find the best rates is to get quotes from several providers at the same time.

Online loan is more faster than you think

Online loan is more faster than you think

The ease of processing is another reason why easy money loans are gaining popularity. Most online lenders work with no paperwork and this makes it easier for customers to get their money. With these loans, customers can get immediate cash and also they can pay their debts faster. Due to this convenient online method, easy money loans are fast becoming popular. It is important to be careful about the company offering the loan and make sure you will get the loan that will serve your needs.

Consolidate Your Payday Loans and Get Out of Debt

You Can Consolidate Your Payday Loans and Get Out of Debt For Good

You Can Consolidate Your Payday Loans and Get Out of Debt For Good

The short answer is yes, you can consolidate your payday loans. In fact, the longer answer is that there are many different ways to consolidate payday loans, but only one way to do it. Most people who are in debt problems will start looking for the shortest, easiest and quickest way to get out of debt, but they never think about consolidating their loans.

 

Getting a loan to consolidate your payday loans takes some time and effort to find the right loan. You will want to take into consideration the amount of money you need to borrow, the interest rate and how long you want the loan to be for. Once you have found the right loan, the next step is to consolidate.

Different types of loan consolidation

Different types of loan consolidation

There are many different types of consolidation loans to consolidate your payday loans. Each type of loan has its own set of rules, regulations and interest rates. With each loan you can consolidate the payday loans you have into one low interest loan.

 

The short answer is yes, you can consolidate your payday loans. It just takes some time to find the right lender. There are so many different lenders out there, that it is hard to choose one.

 

The easiest way to find a lender to consolidate your payday loans is to ask for a referral. If someone you know, or even yourself is having problems with their payday loans, give them your name and number and tell them you would like to try them. They will give you some information on a reputable lender and if you like what they offer, you can apply for a loan. The process is easy.

 

If you are not good with numbers or with finances, you may want to do a free credit report and score from the three major credit reporting agencies. This is the fastest way to find out your credit score. Most people with poor credit are in debt. This information can be very helpful when you go to consolidate your payday loans.

Comparing loans

It is easy to get a loan to consolidate your payday loans, but make sure you compare the APR, charges, fees and annual percentage rates. Some lenders will charge a higher rate than others, but it is best to know what you are getting yourself into before you sign.

 

Make sure to do your homework and find the lenders that will help you get your money back after you have used up your payday loans. The only place to go once you consolidate your payday loans is to get a new loan to consolidate your payday loans again. It is a good idea to work with a lending source that offers consolidation and not just one lender.

 

The reason you want to know the difference between lenders, is that you can pick and choose the ones that offer what you need. It will take some time and research to find the right lender for you, but the payoff will be worth it.

Payday loan consolidation

Payday loan consolidation

Once you consolidate your payday loans, you will have to do some work to get out of debt. Your credit rating is affected by your payday loans, so make sure to have a good credit history, and to repair it as soon as possible.

 

Once you have cleaned up your credit and repaired your credit rating, you can consolidate your payday loans and put your thoughts of ever getting another loan off your mind forever. It will take some time and work, but your credit will be in the best shape you can have it in, and you will be able to apply for a new loan with ease.

 

Once you get a better lender, make sure to use them to pay your bills every month. Start with a month and make it a goal to pay off all of your bills before the end of the month. Use your good credit to get a better rate on your new loan and get out of debt for good.

Debt collection: how it works and when it is better to act

The term debt recovery indicates the set of activities that allows a creditor to recover an outstanding debt.

The credit recovery activity constitutes a phase of “credit management”, ie the management, administration, and control of a credit service; the main purpose of the recovery activity is to revitalize an unpaid credit and, thanks to the tools provided by law, transform it into a future collection.

CREDIT MANAGEMENT

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The problem of unpaid credits represents one of the main reasons for the crisis involving professionals and businesses. The lack of liquidity and overdue payments are the main causes of the recession in the Italian economy.

This is why debt collection is the best tool to combat the economic crisis and make the production system more efficient.

To achieve this goal, many companies and debt collection agencies were born in Italy, offering protection and assistance in favor of unsatisfied creditors.

The great competition in the recovery sector requires a new systematic approach for professionals: the tradition of the past is not enough to manage the new credit protection processes. New technological tools and new financial platforms require different attention and analysis.

Legal Recovery was created with the aim of offering a new solution for the debt collection market; innovation and technology are our main tools and allow us to offer support to creditors in a complete and unique way.

How is a credit born?

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The credit right arises from an obligation, or from a legal relationship that is established between two subjects. This relationship may derive from a contract concluded by consensus between the parties or from a non-contractual liability.

After the conclusion of the contract, one of the contractors (the debtor) will be obliged to provide an economic service in favor of the other contractor (the creditor). The credit, therefore, constitutes the contractor’s right to receive the sum of money from the debtor.

The credits deriving from the contract are distinguished according to the type of creditor and debtor involved in the transaction.

In particular, we can distinguish credits in the following sectors: BANKING, COMPANY, PROFESSIONAL, UTILITIES, TELCO.

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Technological evolution and new digital platforms have created new types of credits in the following sectors

In the recovery activity, it is essential to know the main sectors in which the transactions take place; Thorough examination of the contractual relationship from which the obligation arises is the best tool for correctly assessing a credit.

Legal Recovery constantly analyzes the differences between the various credit sectors and dedicates a lot of time to the study of the most suitable legal instruments to protect each type of credit.

Loan collateral – what can be a mortgage collateral?

Loan collateral is an action aimed at guaranteeing the lender (bank) the possibility of effective debt collection from the borrower, which is served by various types of collateral. The mortgage is secured by establishing a mortgage on the property.

A consolidation loan or a cash loan may have other collateral, for example, a bank pledge on movable items, the purchase of which is financed by such a loan.

What is the loan collateral?

What is the loan collateral?

Bank loan collateral is a tool that guarantees the lender (e.g. bank) the return of receivables from granted loans. At the same time, loan collateral allows the reduction of individual credit risk, i.e. the risk that results from a failure to repay a single liability.

There are various types of loan repayment collateral acceptable to the bank when granting financial obligations.

For what purposes do banks require collateral for a loan?

If for various reasons, the borrower is unable to pay the loan obligation himself, based on his own creditworthiness, the loan collateral will be activated and the bank will be able to assert its rights through it.

In order to reduce their credit risk, banks apply appropriate measures to secure loan repayability. One of them is to require the borrower to submit legal collateral for the loan.

The overriding goal related to establishing a loan repayment guarantee is to provide the bank with a refund of amounts due under granted loans and bank guarantees, irrespective of the circumstances if the debtor does not settle his liabilities within the agreed time.

This is to ensure the bank’s effectiveness in pursuing claims and to increase the value of assets from which the bank can satisfy.

Does the loan collateral affect its cost?

By using appropriate loan repayment security, it is possible to reduce the borrower’s costs.

The total cost of the loan will be lower due to the fact that the bank bears less credit risk in connection with such commitment to the customer.

What are the legal types of loan collateral?

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Legal collateral for a loan is a series of collateral for loan repayment. They are divided into personal and material security.

Material security limits the liability of the person providing security to individual components of his property, and personal security is characterized by the personal liability of the person providing the security, which means that he is responsible for the debt with all his property.

What factors influence the choice of loan collateral?

When determining the loan repayment collateral, banks take into account many different criteria, including:

  • type of loan,
  • loan liability amount,
  • loan period,
  • the real possibility of satisfying the bank’s claims from the accepted collateral in the shortest possible time,
  • the borrower’s economic and financial standing,
  • credit risk is borne by the bank,
  • features specific to the type of security,
  • borrower’s legal status,
  • the expected workload of bank employees,
  • security costs for the bank and the customer.

Legal collateral for a loan cannot be treated as a substitute for the customer’s creditworthiness.

Personal loan collateral – how does it work?

Personal loan collateral - how does it work?

The essence of personal loan repayment collateral is that the borrower and the persons providing the loan repayment guarantee are responsible for the resulting debt with all their assets.

In the absence of repayment, the creditor may apply for capital that was accumulated by the borrower and guarantors both before and after the loan was granted. Personal loan collateral can take many different forms and affect not only the borrower but also third parties.

What forms of personal protection are there?

The group of forms of personal collateral for bank loan repayment includes such collateral as:

  • promissory note bail – obliges the guarantor on a par with the issuer of the promissory note to repay the loan on due dates;
  • surety under civil law – the guarantor undertakes to repay the loan if the borrower defaults;
  • bank guarantee – an obligation on the bank to pay the sum of money to the lender corresponding to the amount of outstanding loan installments, together with interest and costs due, unless the borrower defaults on his obligations to the creditor;
  • debt assumption – a third party takes over the debt and becomes the borrower;
  • assignment of receivables – an agreement between the borrower and the bank granting the loan, under which the borrower transfers to the bank his rights to receive a specific sum for goods or services sold;
  • joining the debt – a third party joins the existing borrower who acts as a joint and several debtors;
  • promissory note – a document that can have a blank form and then only contains the signature of the promissory note issuer, without specifying the bill amount and the due date.

Quick loan – check how to take quick loans

Do you need an instant loan? Get to know the quick loans offer and take advantage of additional financing.

When do you need an express loan?

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There may be situations in your life when you will need extra money immediately. Sometimes they can be related to unforeseen events in personal life – illness, renovation of flat or financial problems.

In other cases, they result from the need of the moment – you come across a unique promotion, you decide to buy last minute holidays or give special gifts to your loved ones.

Burning situations require you to make quick decisions. You can’t afford to go through complicated and lengthy bank credit procedures. You need cash immediately. Where to get her

Good to know

When applying for a bank loan, you will need to provide a number of data and documents. You will need your ID card and earnings certificate. You will also need to prepare and submit a loan application.

A bank employee can contact your employer to confirm your workplace. The bank will also check your GFI history and assess your credit standing. The whole process can take up to several weeks.

Loan – a quick way to get money

Loan - a quick way to get money

A good solution in such a situation may be a quick loan immediately, which you can get online or at the headquarters of the loan company. How long does the procedure for granting this type of loan take?

Quickly completed forms and a minimum number of formalities mean that customer verification is much more efficient than in the case of bank loans.

Most non-bank companies offer a quick loan in 15 minutes. Just a quarter of an hour can be enough for the money to reach your hands or be transferred to your account.

Online loan – quickly and without leaving your home

Express loans are granted online. To receive financial support, all you have to do is fill out the appropriate application on the loan company’s website. The form usually consists of several dozen short questions, thanks to which it is completed quickly and efficiently.

After submitting your completed application, you will receive a loan award within a few minutes. If it is positive, the money will go to your account.

Advantages of quick loans online:

Advantages of quick loans online:

  • you get money without leaving your home,
  • the money goes directly to your account,
  • you can complete the application at any time.

Good to know

You need a personal bank account to take advantage of a quick online loan. It is not possible for the money borrowed to be transferred to another person’s account.

Loan immediately – at the company’s headquarters

If you do not have a bank account or simply want to receive cash in hand, you can go to a loan company outlet. During the meeting with the consultant, you will complete the application and confirm your identity using your current ID card. If your application is approved, you can receive the money right away.

Advantages of express loans at stationary outlets

  • you do not need to have a bank account,
  • the adviser will help you complete the loan application,
  • You can receive money immediately – without waiting for a transfer.

Do you know that…

Quick loans can be used for any purpose. You do not have to specify what you intend to spend the borrowed money in the loan application or during the conversation with the adviser.

A quick loan – for everyone?

Quick loans are granted to persons over 18 years of age and have a valid ID card. Some loan companies may check your credit history in GFI or other debtors’ databases. If you have a history of late repayment obligations and you have an unfavorable credit history, the solution is an instant loan without checking your bases.

A quick loan – where to find the best offers

A quick loan - where to find the best offers

Before you decide to use a quick loan, analyze the conditions offered by various non-bank companies and choose the best offer for you. Thanks to this, you can not only save but also avoid problems with paying off your debt.

Of course, in a situation where you need money immediately, you do not need to browse and compare hundreds of offers available on the market. It would be a waste of precious time! The best solution is for you to use a web comparison engine such as Camille.

Its operation is fast and intuitive. All you have to do is enter the amount you want to borrow and choose the repayment period – for example, a quick loan for 90 days, for USD 3,000. The comparison engine will show you a list of available offers, together with the number of installments and the cost of the loan.

Loan period – more beneficial extension or shortening the repayment period?

The final cost of the loan consists of many parameters. These include loan amount, interest rate, additional costs, as well as the loan period. We have no influence on most of them, but we can manipulate the repayment period, i.e. choose a shorter or longer one. Thanks to this, depending on your needs, we will reduce the installment amount or the number of installments. But what will turn out to be a more advantageous solution: extending or shortening the repayment period?

If you are going to take out a cash loan, you probably wonder what repayment period will be most profitable for you. Do you always have to stick to it stiffly? And what if you want to shorten or extend the loan period?

By all means, you have such an opportunity, especially in the case of a mortgage loan, which can be repaid up to 35 years.

Loan period – definition

Loan period - definition

The loan period is simply the time when the borrower is required to repay the loan. This parameter has a big impact on the amount of installments. Typically, the longer the loan period, the lower the installments.

This does not mean, however, that the loan itself will be cheaper, moreover, its costs may even increase significantly. Most banks allow you to shorten or extend the loan period. Often, however, this involves additional fees.

In the case of loans for smaller amounts, the loan period is significantly shorter than in the case of a mortgage loan. The repayment period is partly dependent on the amount of our loan. It is logical that when we take out a loan for USD 200,000, we need more time to pay it back than when we borrow only USD 20,000.

KNF recommendation on the optimal loan term

The Polish Financial Supervision Authority (KNF) requires banks to recommend a repayment period of up to 25 years to retail clients. However, if the borrower wants to extend it, he gains such a possibility, however, as per the PFSA recommendation, the bank should not grant a loan with a repayment period exceeding 35 years.

Why is this happening? Even a decade ago, loans with repayment periods of up to 40-50 years were not surprising. An excessively extended repayment period causes a large increase in the borrower’s total costs. What’s more, it is associated with high risk for both the bank and the borrower, because it is characterized by increased sensitivity of installments to changes in interest rates.

Important!

The maximum loan term is 35 years and it is not possible to extend it!

What loan period should you choose?

What loan period should you choose?

Wondering what loan period to choose? Preferably one that will be tailored to your financial capabilities. However, this is not so simple.

You must also take into account creditworthiness. Moreover, the banks set the maximum age of the borrower which he will reach when the last installment is repaid. This means that when you are 55 years old, you can not count on a loan with a repayment period of 30 years.

Maximum loan term – advantages and disadvantages

Maximum loan term - advantages and disadvantages

Is it worth choosing the maximum loan period? It depends. This solution has its pros, although it seems that there are more disadvantages in this case. The main benefit is the lower installment. Therefore, if the installment amount is of key importance to you, then a long loan period will prove to be a good choice.

However, you must know that the overall cost of the loan will also be higher in this case. What’s more, for the whole period of its duration, you may have a problem getting another loan because your creditworthiness will decrease significantly. Why? Each financial liability affects the amount of creditworthiness, which means that you must spend part of your savings on paying installments.

The maximum loan period is a necessity for many people, because if you shorten it, your creditworthiness will also decrease. Of course, this does not apply to everyone, but with lower earnings, the bank may think that you can only pay the lowest installment.

It is worth following the example of the total cost of a mortgage with a maximum loan term of 35 years.

  • Loan amount: USD 200,000
  • Loan period: 35 years
  • Credit interest rate: 5%
  • Equal installments in the amount of: USD 1009.38
  • Total interest cost: USD 223,937, 35

Therefore, when deciding on a mortgage for 35 years, you have to pay back a huge amount, which can equal the doubled value of the borrowed amount. Below you can see how much less you pay off when you decide to take a loan for 20 years.

Shorter loan period – advantages and disadvantages

Shorter loan period - advantages and disadvantages

Shorter loan period means higher installments, which will not suit everyone. However, you get more time to pay back, and thus, you leave more money in your household budget. It is also a good step if you want to take out a second mortgage soon and you want to maintain your creditworthiness.

Let’s check how shorter the loan period is against the background of the above calculations for the maximum repayment period.

  • Loan amount: USD 200,000
  • Loan period: 20 years
  • Credit interest rate: 5%
  • Equal installments in the amount of: USD 1319.91
  • Total interest cost: 116,778, USD 75

So, as you can see, the installment is significantly higher in this case, but if you decide to pay back by 15 years (in this example you have compared a loan for 20 and 35 years, you will even get over USD 100,000).

Can I extend the loan period?

Can I extend the loan period?

Many borrowers are wondering if it is possible to extend the loan period and whether it is worth doing at all. What is it then? If you want to extend the loan period, you have the option. Thanks to this, your monthly installment may decrease and you will avoid financial problems.

However, you must know that the total loan amount will increase then. In addition, before making a decision to extend the loan repayment period, you should check the maximum possible loan period with your bank.

If you took out a loan for 30 years and the maximum loan period is exactly the same, you can no longer extend this period.

How to extend the loan period?

How to extend the loan period?

To extend the loan period, consult a bank adviser. It is best to do it directly at the facility, then all doubts will be dispelled on the spot. We can also get this information on the hotline.

You will also need to submit an appropriate document, i.e. an application for extending the loan period. You must remember that such a change will also affect other parameters of the loan, such as its total cost. It happens that you need to attach other documents to the application.

Application for extension of the loan period

If you need more time to repay the loan, you must apply for an extension of the loan period at the bank where you signed the loan agreement. Then you will need to enter an annex to the contract, which may involve an additional fee.

The bank may re-check your creditworthiness, and thus, require you to provide the documents required when applying for a loan, i.e. income certificates.

It is therefore worth to attach such a document to the application. Moreover, this document should contain information on why you want to extend the loan period.

Is it profitable to shorten the loan period?

Is it profitable to shorten the loan period?

What about shortening the loan period? Does this solution make sense? Is it profitable to shorten the loan period? The shorter loan period is mostly beneficial for the borrower.

First, the total cost of credit will then be lower, and secondly, it will be free from installments, which often weigh not only on the home budget, but also on the psyche. Thus, it will gain funds that it can spend on a completely different purpose.

Shortening the loan period, however, sometimes involves an additional fee. So before you choose a specific loan offer, check whether shortening the loan period will cost you a lot.

Loan period and age of the borrower

What is the relationship between the loan period and the borrower’s age? As it turns out very large. Each bank determines the maximum age of the borrower at the time of signing the loan agreement. Usually with a maximum loan period (35 years) it is between 35 and 45 years.

A shorter loan period is no longer associated with such large age restrictions, which is why a 10-year period may as well get a 60-year-old in 10 banks.

Loan period and cost of credit

Loan period and cost of credit

It is worth looking at one more issue and checking how the loan period affects the cost of the loan. We have already mentioned several times in this article that the longer the repayment period, the higher the total cost of the loan.

What’s more, extending the repayment period often involves additional fees, such as life or unemployment insurance. Therefore, if it is not necessary, it is better to avoid such a solution.

What do loans protect against and how much do they cost

Misfortunes go about people, including borrowers. What can you do to minimize the risk of exposing yourself and your loved ones to repayment when taking out a bank loan, when we encounter a random event that causes difficulties in the normal servicing of the loan repayment?

It is worth getting to know the insurance offer provided with loans, which are quite commonly offered in banks. What are the pros and cons of buying a policy? We analyzed the offer proposed by the players most important in the domestic yard. We invite you to read.

What do insurance packages protect us from?

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As you can easily guess, the range of insurance coverage offered for banking products, such as loans and credits, is quite diverse. We decided to take a closer look at these proposals and specify the scope of insurance protection that is offered to us by individual banks when taking on credit obligations. We checked that by taking insurance we gain protection in:

  • Good Finance in the event of death, permanent invalidity, temporary inability to work and loss of a job, and in the case of the extended insurance option also in the event of death as a result of an accident (accident), serious illness and total inability to earn;
  • Honest Bank, where we are protected in the event of death or death as a result of an accident, serious illness, loss of income or hospitalization, inability to work or disability,
  • Cooperative Bank in the event of job loss, hospital stay, death as a result of accident insurance or loss of earning capacity,
  • GBank, where we are protected in the event of death due to accident, incapacity for work or serious illness,
  • Good Lender in the event of death, loss of earning potential, loss of a job, serious illness or hospitalization.

Protection costs and exclusion of liability

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The scope of potential protection in the event of events that could entitle us or our relatives to benefit from an insurance benefit is quite wide.

As always, however, there is the issue of the cost of such collateral in the event of events that hinder or prevent repayment of the loan. The table below contains information on the price of insurance proposed by banks for individual loan offers.

However, the issue is when the insurer may refuse to pay compensation. Most often, protective liability is removed from the shoulders of an insurance company when we apply for unemployment benefit that occurred as a result of contract termination by mutual agreement.

We have even less chance of compensation when, for example, we have lost our health and apply for a benefit in the event of a serious illness or hospitalization.

Priceless security?

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It should be borne in mind that in a few months banks will be forced to comply with the latest regulation of the Good Finance Investment Corporation (GFIC), which decided to organize the Polish bancassurance market and reduce the banks’ appetite for additional earnings when offering insurance protection.

This regulation, Recommendation U, will allow a more transparent change in the cost of protection and is intended to shorten the practice in which the lion’s share of the protective premium (in extreme situations even more than 4/5) paid by the client is collected by the bank as remuneration for the sale of insurance.

The scope of potential protection that we gain by taking out insurance offered when taking out a loan or cash loan is considerable. Unfortunately, the costs of such security are equally great. It is always worth calculating whether we can afford such an additional cost, except for interest and commission.

Remember, however, that insurance is always included. You never know what might happen to us when you pay the debt. Cessation of regular loan repayment can expose us not only to financial unpleasantness, but also to even cancel our dreams about our own apartment. The prudent borrower has always been insured.

A home renovation loan

 

The most common method of financing renovation of a house or apartment is a loan. To buy an apartment, we take a mortgage and take a separate cash loan for renovation.

The great advantage of cash loans is that the property you want to take out for does not have to be your property. This can be particularly useful when the apartment belongs to, for example, your partner, and you only want to financially support his device.

Home renovation loan – mortgage

Home renovation loan - mortgage

A mortgage for home renovation can, under certain circumstances, be more profitable than a cash loan. This is because the interest rate for such a loan is much lower than for a cash loan. The difference we are talking about can reach as much as 6%!

In addition, hardly anyone knows that a mortgage for a home renovation can be taken for a very long period, eg 30 years. This means that the monthly installment spread over such a long time will not be too much of a burden to our home budget.

This is an extremely big advantage, because with a large loan value (maximum 60% of the property value), the monthly installment will not be USD 2,000, only about half of it. It is also worth familiarizing yourself with the topic of how to take a mortgage step by step, which will help to dispel many doubts.

Advantages of a mortgage granted for a house renovation:

  • maximum loan amount (for a property worth at least USD 350,000, the maximum mortgage amount will be higher than for a cash loan),
  • credit length,
  • low interest rate.

Mortgage with renovation – is it possible?

Mortgage with renovation - is it possible?

Banks allow you to combine a mortgage to buy a home with a mortgage for refurbishing your home. However, remember that a mortgage plus renovation may not always be a good option. When combining two products with each other, banks will require a larger down payment.

Most often, the amount of the contribution is calculated jointly for the purchase of real estate and renovation purpose. This means that when deciding to buy an apartment whose value is 250 thousand. USD and matching 50,000 USD, which we allocate for renovation purposes, we will have to accumulate with a 10% own contribution of 30 thousand. USD (25,000 for the purchase of an apartment and 5,000 for renovation).

However, if the bank requires a 20% own contribution from us (the most common scenario), then we will have to put up as much as 60,000 dollars.

Home renovation loan – how to get it?

Home renovation loan - how to get it?

Wondering how to get a cash loan? All you have to do is go to the bank of your chosen bank or apply online. To complete the application you will need such documents as: ID card and income statement.

The whole process will take you a few minutes, and the credit decision is issued within 10 minutes. If you are a regular customer of the bank and you have your personal account there, then you may not need your earnings certificate at all.

Remember to compare the offers of different banks before submitting your application. It is worth checking the interest rate and the final value of the loan. All this has a big impact on the size of the installment you will pay.

However, if you are thinking about a larger amount and are thinking about a mortgage, you will have to be patient during the first stage. The procedure itself can take a long time, and the credit decision is not issued as quickly as in the case of a cash loan.

Some banks wanting to speed up this process allow their clients to contact online – then the form and all documents are sent electronically to the bank, and you only appear once in the outlet to sign the contract. To properly complete the credit form, you will need several documents:

  • a document with a photo confirming your identity,
  • property deed and mortgage entry,
  • property valuation,
  • repair cost estimate for mortgage loan (renovation plan),
  • invoices and repair settlements,
  • credit insurance: for life, loss of job or real estate against fire and other random events.

Remember!

You can only use your mortgage to renovate your home or renovate your home. With the funds raised, you can, for example, buy household appliances, repair the installation or spend them on remuneration for a renovation company. Under no circumstances can you spend these funds on, for example, car repairs.

The last stage is the launch of the loan. After analyzing all the documents and checking your creditworthiness, the bank will issue a credit decision and agree with you the date of signing the contract and launching the loan.

Non-interest loan costs and their importance

If you are looking for a favorable loan offer, you probably realize how important it is to compare available bank proposals in various financial institutions. Several factors must be combined.

Lots of borrowers only pay attention to the amount of interest, which is a big mistake. Non-interest loan costs are equally important. What are they and what does it consist of?

What are the costs of bank loans?

What are the costs of bank loans?

Regardless of whether you decide on a small-scale cash loan or sign a mortgage contract with the bank, you should always pay attention to the total cost of the loan. What you need to look at:

  • interest is the basic component of your loan. Banks provide the interest rate on the loan on an annual basis. Importantly, each of them sets them individually, but their value cannot exceed four times the pawnshop rate,
  • additional costs – these types of costs are determined by each bank at its own discretion, including a commission for granting a loan or even a preparatory fee.
  • insurance – it is rarely mandatory, it is a form of bank security, which may be necessary, e.g. if your own down payment is too low when you apply for a mortgage.

What are non-interest loan costs?

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As the name implies, non-interest costs are all additional fees that the bank requests from the borrower, except for the interest rate set. Interest consists of a bank margin and a base rate for cash loans, which is determined by the market.

So what exactly are non-interest loan costs? They can consist of many elements, therefore they will not be identical in every bank.

Non-interest loan costs include commissions, account maintenance fees, preparation fees, credit insurance or cross-selling costs. Most of these types of fees are usually found in the mortgage loan offer.

What factors affect the amount of non-interest loan costs?

What factors affect the amount of non-interest loan costs?

You already know that the cost of credit is divided into interest and non-interest parts. The former is the result of the nominal interest rate, while the latter depends on the amount of preparation fees charged by the bank.

To a large extent, the amount of non-interest loan costs is affected by a positive credit history and good creditworthiness. So these are factors dependent on the borrower.

The better your financial situation looks, the lower additional costs you will have to bear . A significant part of this type of costs constitutes collateral for the bank.

Act regulating non-interest loan costs

Act regulating non-interest loan costs

Non-interest loan costs are regulated by law. Until 2011, such costs could not exceed 5% of the liability. Later, however, this changed, so that financial institutions could independently determine their amount and had complete freedom. This was probably not good information for borrowers.

The introduction of non-interest loan costs in this form of the act caused many banks to commit fraud, as borrowers were burdened with an excessive amount of additional costs. However, this changed in March 2016, as the act came into force, which introduced the maximum ceiling for non-interest costs .

It guarantees borrowers that the additional costs do not increase the total loan costs by an incredible amount. What are the maximum non-interest loan costs now? It is worth knowing that they cannot exceed 25% of the borrowed amount . Moreover, they may not be more than 30% of the amount on an annual basis.

How to calculate non-interest loan costs?

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The maximum amount of non-interest loan costs is expressed by the formula:

MPKK ≤ (? × 25%) + (K × d / R × 30%)

How to read individual symbols?

  • MPKK – this is the maximum amount of non-interest loan costs
  • K – total loan amount
  • d – repayment period (expressed in days)
  • R – number of days in the year

Let’s check the example of how to calculate non-interest loan costs. Suppose you want to borrow USD 1,500 for a period of 30 days. We calculate the maximum non-interest cost based on the formula:

(USD 1,500 x 0.25%) + (USD 1,500 x 30/365 x 30%)

375 + 36.98 = 411 USD *

* rounded amounts

This means, therefore, that for a cash loan of USD 1,500 for a period of 30 days, the maximum non-interest costs may be about USD 411.

Annual interest rate and non-interest loan costs

Annual interest rate and non-interest loan costs

Since you already know that the amount of interest does not constitute the total cost of the financial commitment, you must also look at other numbers. Where do you look for them? You don’t have to make calculations yourself, all you need to do is pay attention to the APRC or the actual annual loan rate.

It includes all loan costs, including additional costs. However, do not confuse it with RSO, i.e. the annual interest rate. RSO does not take into account non-interest loan costs. Probably because banks most often mention the RSO and not the APRC.

However, you will certainly find both these values ‚Äč‚Äčeasily, even if they are given in small print. Every time you are tempted by a loan offer, look carefully at all loan costs.

Just because the interest rate seems attractive does not mean that you will pay off a small amount. The vast majority of banks charge additional costs, which is why they are difficult to avoid.

Denominated loan – what is it about?

A denominated loan is the most common type of mortgage loan converted into foreign currency. In the loan agreement, its amount is expressed in the currency of the loan, for example in Swiss francs. However, the loan is paid to the borrower in USD at the exchange rate as of the date of launch. When deciding on a denominated loan, we do not really know what amount of USD the bank will pay us. It may be lower or higher than the one we requested.

Among the various types of loans available in banks, an important place in the loan offer is occupied by a mortgage. It is usually taken for the implementation of broadly understood housing goals.

The mortgage calculator is able to tell clients how much such liability will cost and what principal and interest installments the customer will pay during the loan period. The type of mortgage is a denominated loan. Let’s check what it actually consists of.

What is a denominated loan?

What is a denominated loan?

In bank offers, a denominated loan is nothing new. It has been around for years, but many bank customers are unable to answer the question of what it is. How can you explain the term “denominated loan”?

The definition indicates that in this case, we are dealing with a foreign currency loan, in which the amount of debt in a given foreign currency is calculated according to the currency buying rate that is in force on the day the loan agreement is signed with the borrower. At the same time, regardless of the currency in which the loan is denominated, installments are always repaid in USD.

Exchange rates are constantly changing, therefore loans denominated are risky. There is a real risk in their case that the amount of the loan paid out in national currency will prove insufficient, e.g. for the purchase of a specific property. The reverse situation may also occur – that the exchange rate will increase from the moment the loan agreement is signed, and as a result, the borrower will receive more funds in the national currency.

The specificity of a denominated loan is easier to understand if we look at an example. We assume that a loan of USD 100,000 denominated in USD is granted, and on the day of signing the loan agreement the purchase rate of the dollar by the bank is USD 4.20 / USD, while the selling rate is USD 4.30 / USD. The loan amount mentioned in the contract is 23,809.52 dollars (at the purchase rate), and the installment is around 238 dollars.

The installment on the day of launch is USD 1023.40 (at the selling rate), and the repayment of the entire liability on that day is USD 102,440. If the loan amount is USD 100,000, after denomination USD 23,809.52, and the loan is paid out in tranches, it may happen that these differences in the amount of funds paid will be more pronounced due to fluctuations in the exchange rate over a longer period of time.

If the dollar appreciates against the dollar, the tranche of the denominated loan paid in dollars may not be sufficient for the needs presented by the borrower.

Advantages and disadvantages of a denominated loan

Advantages and disadvantages of a denominated loan

A loan is risky and this risk level is its biggest drawback. You can say it’s a currency loan only for the brave. Exchange rates change unpredictably and dynamically, actually from day today. They affect the amount of the denominated loan.

As a result, it may happen that the amount paid out is too small to cover the costs related to the investment planned by the borrower. Customers who take out a denominated loan paid in tranches take an even greater risk. Spreading the loan disbursement over a few months increases the exchange rate risk – the differences between subsequent tranche disbursements can be very high.

Despite the existing risk, a denominated loan also has advantages. It may have a better interest rate than a regular loan in USD, and at the same time, the borrower may obtain a larger loan amount than in USD and a chance to pay off the debt faster.

Loan denominated in francs

If the bank grants a loan denominated in Swiss francs, its amount in USD is converted into CHF at the exchange rate on the day the loan agreement is prepared. The conversion takes place at the franc buying rate applicable on that day at the bank.

A loan denominated in CHF, which is paid out later, after signing the loan agreement, may have a higher or lower amount than the one indicated on the agreement.

Loan denominated in dollar

As in the case of a loan denominated in Swiss francs, the loan denominated in dollars is granted in such a way that its amount in dollars is converted into dollars at the exchange rate on the date of the loan agreement, but the loan is already disbursed at the exchange rate applicable on the day of withdrawal.

Denominated loan paid out in tranches

The payment of a loan denominated in tranches increases the risk of loss for the borrower. All because the disbursement of funds from the loan takes place gradually, for example, as the house is being built or the apartment is being renovated – this is the case when mortgage and construction loans are granted.

In the case of a loan denominated in tranches when signing a loan agreement, it is known in advance how much currency is available, but it is only at the last tranche that the customer finds out how much he actually borrowed in USD from the bank.

Generally, the longer the period between the moment of determining the amount of the loan in currency and the time of its final payment in USD, the greater the probability that the USD equivalent may be completely different than expected by the customer.

What is the difference between denominated and indexed credit?

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We already know what a denominated loan is, but how is it different from an indexed loan? Are loans denominated and indexed the same loans? Although there are similarities between them, it cannot be said that they are the same.

An indexed loan is another type of foreign currency loan that is converted from USD to foreign currency at the time of its launch, i.e. the payment of money to the borrower. At the stage of concluding the contract in a denominated loan, the customer immediately knows the amount of debt in a foreign currency, and the indexed loan only contains information about the amount of dollars to be repaid.

An indexed loan will guarantee the customer, e.g. purchase of the real estate, but part of the money may be paid to him at an unfavorable rate. With this type of loan, a lower exchange rate will not result in a smaller amount of money being paid out, but the customer will have less money in the currency to pay.