How to request a loan

It is worth knowing what it means to ask for a loan and what are the main requirements to access it

It is worth knowing what it means to ask for a loan and what are the main requirements to access it

Asking for a loan is a very common way to face certain expenses that exceed our ability to pay. Buying a car, reforming the house, organizing a wedding, costing your studies … there are many occasions when our savings are short to pay for these expenses or, directly, we prefer to apply for money to our bank to return it slowly, without spending In one go that mattress we have been saving over the years.

Either way, when it comes to going to a bank, we should know exactly how much money we need and what our payment capacity is since they are two important factors that the bank will take into account to grant the loan or not.

The keys to a personal loan

The keys to a personal loan

To choose this loan that best suits our needs, we must pay attention to three main keys:

The capital we ask for

It is the total of the money that is requested. Most banks offer loans starting at € 1,000 or € 1,500, while the financing limit depends, to a great extent, on the profile of the client that requests it.

The interest we have to pay

It is the price of the money that they provide us, what the bank charges for leaving us a certain amount of money and run the risk of non-payment. It is represented in a percentage to which they refer as TAE and TIN. Let’s look at these two concepts quickly:

  • The acronym TIN (TXN) refers to the nominal interest rate, the price that the bank charges for lending us money. It is calculated according to a percentage of the capital loaned to the client. This percentage applies to the pending capital repayment at any time. Within the TIN they do not include the possible commissions that the loan has.
  • The APR is the equivalent annual rate and, like the TIN, represents the cost of the loan but this time including the commissions and other expenses that may be associated with the granting of the loan.

Therefore, when analyzing loan interest and comparing between a bank and another, the TAE is the data that we should fix.

The amortization period

The third most important factor when applying for a loan is the time we will return it, the so-called amortization period. The most normal thing is that this period goes from two to ten years, although these periods may vary from one bank to another.

It is important to choose carefully at what time we will repay the loan since, although a longer repayment term will make the monthly payments smaller, over time, it will also lead us to pay more interest. Instead, a shorter repayment term will increase that monthly fee but will make our loan cheaper.

What sets a bank to grant us a loan?

What sets a bank to grant us a loan?

When a bank lends money to us, it is relying on our ability to return the loaned amount, as well as the interest rates that have previously been established. That is, the bank runs a risk and needs to make sure that as clients, we will be able to return the money received. Therefore, the main criterion for analyzing any loan application is our monthly income.

The most important thing is to have a regular source of income and that these are enough to allow us to pay monthly installments. Therefore, the coefficient or ratio of borrowing is used, a percentage that ranges between 35% and 40% beyond this would not be safe to provide a certain amount of money to a client. Or what is the same, if the monthly fee that we have to pay represents more than 35% or 40% of our monthly salary, the bank will not consider it safe to offer a loan in these conditions.

Given this situation, we would have to modify some of the aforementioned parameters to obtain our financing: either requesting less money, trying to find a bank that requests us a lower interest rate or accept a greater amortization period.

If it is true that although our revenues are the determining factor in the granting of a loan, they are not the only point that banks consider to study our request. The number of the owners who request the loan is also valued since two payrolls (or demonstrable sources of income) offer a greater guarantee of payment than a single one.

Another key that can decant the balance in our favor is our history as clients and payers. If throughout our life we have been responding in a timely manner to all payments of other loans or credits, the bank will tend to trust more in us. Having said that, it is not necessary to point out that access to any bank loan will be vetoed if we fall into a list of defaulters.

Finally, having goods in our names, such as a house or a vehicle, always means support for our request.

The most common commissions on loans

The most common commissions on loans

Apart from the interest we pay for our loan, most of the financing products offered by banks have some associated commission. The most common are the following:

  • Opening commission: it is a small percentage of the total of the loan that is paid at the beginning.
  • Total or partial early cancellation commission: a percentage of the outstanding capital is paid when returning the loan.

When we are requesting a loan, we must know exactly what our debt limit is, the maximum monthly installment that we can afford to pay without passing economic ‘straits’. Based on this data we can start exploring different options and, as with any other decision, it is important to compare the different alternatives that we offer.

 

 

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Cheap and fast to Sofortkredit even without Schufa

In order to check the creditworthiness of the borrower and to approve the loan application, a query is usually started at the Schufa. It is usually only possible to obtain the desired financing if the Schufa information is positive. In any case, the approval of the loan will be faster if your credit rating is confirmed by a Schufa statement. But even with low loan amounts an instant loan is possible even without Schufa. Many banks offer such instant loans as long as you can provide proof of income for the past three months. The money will be in your account in a few days. You simply pay back the money in equal installments until the instant loan is paid.

For the self-employed, it is usually more difficult to obtain such a loan. In particular, if they have a sharply fluctuating income, many banks are reluctant to lend to them. With a business evaluation (BWA), however, you can provide information about the current earnings situation and thus creditworthiness.

What is there to consider about credit?

Select the instant loan not just in terms of availability. Especially instant loans often have unfavorable conditions and a high interest rate. Therefore, compare different offers with regard to the effective interest rate. Even if it is only a small amount of credit, so a higher interest rate and higher fees but quickly causes a not insignificant financial difference in price.

Editorial Tip

You do not have to choose the first offer. In particular, for a larger loan, it is advisable to make a loan request to various providers. This way, you can more reliably find a loan that offers good conditions. For smaller instant loans, however, a credit comparison is often sufficient.

Hedging for loans

Especially with a larger loan, the credit providers often require a residual debt insurance, which intervenes if the borrower dies or due to unemployment, the loan installments can no longer pay. With a smaller instant loan such insurance is usually not necessary, but can still be useful. In any case, please note whether the costs are included in the calculation of the APR or represent an additional cost item.

Find the right offer now

Use our loan calculator and find a cheap loan quickly. No matter how many months the instant loan should run or what loan amount you want – you will quickly and easily find out what monthly installments you have to expect and how high the annual percentage rate will be.

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Debate in the Bundestag: Better protection against high interest rates

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news Debate in the Bundestag: Better protection against high interest rates finanzen.de News always well informed Thursday, 09.10.14 , written by Cora Christine Döhn This Friday, debates in the Bundestag on a limitation of disposition and overdraft interest rates. There are applications from the Greens and the Left, which consider the cost of overdrafting at historically low interest rates unjustified. Consumer Protection Minister Heiko Maas proposes a more diplomatic solution. > Viel Geld für teure Dispozinsen Disbursing costs pull the banker's money out of his pocket

Green Party and Left Party are again campaigning for the limitation of discretionary interest and thus for the rights of bank customers on Friday. In times of historically low interest rates (0.05 percent) , they see the level of bank overdraft and overdraft rates as unjustified. Many banks demand according to the disbursement test test of Stiftung Warentest interest of over 10 percent. The highest overdraft interest rate, according to the Left Party, even stands at 22.5 percent. From the perspective of consumer protection, it is particularly critical that interest rate increases are passed on to customers much faster than interest rate cuts. In concrete terms this means that the negative interest rate developments are borne by the bank customer, but he benefits only slowly from the positive ones.

Overdrawn interest rates: Do banks bank customers pay?

Banks take a risk when lending money in the form of disposition or overdraft facilities. If the customers can not settle their debts, the bank will remain at the expense. The payment default rate, according to the Left, is only 0.3 percent . The amount of the interest is therefore not justified as a risk buffer. Both the Left and the Greens speak of a systematic rip-off of private banking customers and criticize the behavior of banks. Especially in rural areas, where a bank change is often not possible without significant circumstances, the high interest rate is not acceptable.

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Trapped in the Dispo trap: Affected get into personal bankruptcy

One in five Germans, according to FMH-Finanzberatung and Dusseldorf-based financial expert Udo Keßler, have to take out a loan in the form of overdraft or overdraft facilities. The reasons for this are diverse. Unemployed, single parents, couples with children and people in precarious working conditions are often dependent on overdraft. Especially people who regularly have to overdraw their bank accounts, get into the debt trap with the high interest rates of the emergency loans. Disbursements can be easier for customers to get than the cheaper installment loans. But it is also one of the most expensive forms of credit on the market. Frequently, indebted people can not withstand the rising costs without help and get into private bankruptcy .

Green and left call for limitation – Maas only wants to introduce banking advice

To relieve consumers, the left calls for a limitation of the overdraft and discretionary interest to a maximum of five percent above the base rate of the European Central Bank (ECB). Currently that would be 5.05 percent . The Greens are proposing an audit to determine what the interest rate should be in order to cover the banks' risk costs. Consumer Protection Minister Heiko Maas (SPD) chooses the diplomatic way and considers advisory obligation on the part of the banks with the customers meaningful, which use the Scheduling credit longer term. In addition, more transparency with regard to the amount of disposition and overdraft costs is to be ensured in the future. It is questionable whether counseling alone paves the way out of the debt trap. Because even if the bank customer is well informed, he probably has no way to switch to a cheaper loan.

Here are tips and more information about the investment. >

Cora Christine Döhn

editorial staff

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How much is a letter?

Friday, 12.08.16, written by Anja Schlicht

For years, a normal stamp cost 55 cents. But after Deutsche Post has raised its prices for postage four times since 2013, many people today are asking themselves: what does a letter cost? At 70 cents, shippers currently pay over 25 percent more for a standard letter than four years ago. After all, until the end of 2018, the prices for stamps should not rise further.

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While people occasionally send postcards when they’re on holiday, letters are rarely sent out these days. The question of what a letter costs, therefore, is rare, because the post costs in contrast to e-mails, text messages or phone calls too much time . But some issues such as the termination of the electricity or Internet provider should be better done by mail. Anyone who wants to pay a stamp worth 55 cents out of the habit of having a proper surprise. Because since 2016, the postage for a normal letter at Deutsche Post costs 70 cents . If you want to send more than three pages, you have to pay 85 cents for a compact letter.

How much is a letter? Alternatives to the post compared

A letter can also be sent with a shipping company other than Deutsche Post to save some money. However, most companies operate very regionally so that mailboxes and outlets can not be found in every region. For example, Pin Mail AG is active in Berlin. What does a letter cost here? 65 cents. In East Thuringia Citykurier can be used for shipping. There is the stamp for 62 cents. In Lower Saxony Citipost is ready as an alternative to the German Post. The cost of a normal letter is 60 cents. Inhabitants in Baden-Wuerttemberg pay 68 cents for using the company BW Post there for shipping.

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How much does a letter cost and why are stamps more expensive?

Swiss Post initially increased the cost of a standard letter in 2013 from 55 cents to 58 cents. In 2014, the next adjustment to 60 cents took place, before 2015 already 62 cents were due. Since January 2016, consumers now pay 70 cents for sending a letter. The last price increase of eight cents is due to a new price regulation, after which the post office can adjust their prices.

To date, the postage may be increased depending on inflation and transport costs including a mark- up. For some time, the Federal Network Agency, which must approve the increase in letter postage, also allows a European market comparison . If there are higher profits made by letter delivery, Swiss Post is allowed to post tax and adjust prices.

How are letters insured?

At Deutsche Post, whose market share for letter mail is around 90 percent, ordinary letters are not insured. If a registered letter is damaged or lost, the shipment is insured up to a maximum of 25 euros. If you want to send valuables, you should, for example, use shipping as a value letter (“national value”). Here are cash up to 100 euros and valuables up to 500 euros insured. For a surcharge of 4.30 euros is due.

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Car Insurance: Telematics Tariffs Top or Flop?

Car Insurance: Telematics Tariffs Top or Flop?

Thursday, 02.10.14 , written by Anja Schlicht With telematics tariffs or pay-as-you-drive tariffs, the contribution of the motor insurance can be reduced with the driving behavior. According to a recent study by R + V Versicherung, only one in three respondents would opt for such a tariff. A completely different picture shows, however, according to Sparkassen DirektVersicherung another survey.

Kfz-Versicherung: Kontroverse Meinungen zu Telematik-Tarifen

Too fast on the road: Telematics rates rate driving style

Telematics tariff yes or no? This question was asked in a recent survey of R + V motor insurance 1,500 customers who were traveling for 12 months with a telematics box installed in the car. With her the driving behavior was recorded and evaluated. The better the so-called score value, the sooner the driving style could have a positive effect on the insurance contribution. However, although more than 60 percent of respondents believe they could reduce the pay-as-you-drive rate their premiums, only 35 percent said they would conclude a car insurance.

However, a representative survey by the Hamburg Institute for Management and Economic Research (IMWF) comes to a completely different conclusion . Only one in three would opt for a telematics tariff, two out of three study participants can “imagine their use in the future,” reports Sparkassen Direktversicherung. It currently offers the only telematics tariff in Germany with “S-Drive”.

For the time being, R + V motor insurance will not offer a telematics tariff

Both insurers have different opinions on the telematics tariffs. Due to the immature technology and probably also because of the low customer acceptance , which the R + V study proves, the insurer will offer “for the foreseeable future no telematics-based insurance tariff”. Big problem of pay-as-you-drive tariffs: “The built-in telematics boxes in the car record the driving behavior in small parts. But the system can not interpret this data, “explains R + V project manager Marc-Oliver Matthias

Sparkassen direct insurance convinced by telematics tariff

By contrast, Sparkassen Direktversicherung believes that the S-Drive telematics tariff will continue to be offered. Finally, “German motorists appreciate the telematics security service,” it says in a press release. Currently there is a waiting list for those interested. According to a survey by the provider, insured persons particularly appreciate that an ambulance is automatically alerted to serious accidents. In addition, the opportunity to save money not only with the right driving style, but also in the course of the competition “driver of the month” for three months to get a free motor insurance.

Insured persons appreciate the emergency call service of the pay-as-you-drive tariffs

The two studies of the insurers are not only contradictory statements. Some results coincide. For example, the automatic emergency call system , which immediately requests help in the event of a major accident, has been rated as very good. According to R + V, as many as two-thirds of those surveyed could imagine paying for this service, but not for being able to locate the vehicle in the event of theft. Also in the survey of the Sparkassen Direktversicherung estimate only 13 percent of respondents, the vehicle tracking function as a major advantage of the offer.

Offer limited to telematics tariffs – improvement of the technology necessary

Anyone wanting to conclude a telematics tariff during a car insurance change this year will hardly have the opportunity to do so. Because the offer remains limited. However, should the evaluation of the telematics data improve in the future, so that, for example, the driving behavior can be evaluated objectively in relation to other road users , it can be assumed that further providers will follow. If then the acceptance increases that personal driving data must be transmitted and evaluated for the exact evaluation of the driving style, the pay-as-you-drive offers could soon be in great demand.

  • Here you can find tips and more information about car insurance. >
  • Anja Schlicht
  • editorial staff

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