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    Car Loan Final Rate Calculator

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    There is valuable information in the event of difficulties with the car loan installment calculator. If you have poor credit rating factors, you may have to expect a higher interest rate. Ultimately, you should critically examine and calculate each offer.

    Advantages and disadvantages of the final sentence – what you should pay attention to. The clear advantage of final funding is that consumers can continue to pay their low rates if they can’t pay the final rate all at once.

    Example of a car loan

    Example of a car loan

    A car loan is also known as a car loan. This is a dedicated installment loan, which means that a car loan is only used for the purpose of buying a vehicle. Both used and new vehicles can be viewed as vehicles purchased with a car loan. If the necessary capital is not available in the form of an available loan, a car loan can be used for refinancing.

    Auto loans are provided by branches, credit brokers, direct and online banks. A comparison of the offered conditions is worthwhile in any case. In addition to the nominal interest rates, the effective interest rates and the total costs should also be compared, as in the example of car loans: loans for car financing are also given or distributed by car dealerships, car dealerships, and car manufacturers.

    Vehicle financing is earmarked and therefore has more favorable interest rates than usable. Many credit institutions also provide their customers with loans that are financed without prepayment and without an increased closing rate.

    The vehicle letter of the vehicle purchased through the credit note is often deposited with the bank, so that vehicle sale is actually not possible since nobody can purchase the car without a good faith letter.

    The basis for the motor vehicle loan is a partial payment loan agreement in which all conditions such as B. interest rates, charges, repayment rates, and terms are set. At the end of the loan term of the car loan, the vehicle owner receives the paid vehicle letter back. On this page, you will find our car loan comparison calculator and further information on the topic of car purchase.

    Vehicle finance – Many roads to the dream car

    Vehicle finance - Many roads to the dream car

    Some people find a status symbol in their vehicle, others only an indispensable means of transportation to get to the workplace! If you have already decided on a special private label, the financing from the respective provider can bring you an economic competitive advantage. With this financing option, you get the loan directly from the car brand.

    You also pay these back to the house bank in constant installments, which offers you predictability. The advantage of producer financing is that you can take your old vehicle into payment immediately. On the other hand, the prospects of further reducing the purchase price of the vehicle in negotiations are also diminishing.

    Regardless of which financing option you ultimately opted for, it is always advisable to arrange the loan term so that it does not exceed the expected life of the vehicle. The principle of this form of financing is, as with normal manufacturing financing, to conclude a loan agreement with the bank of the vehicle manufacturer. However, the monthly installments are significantly lower since they only correspond to the depreciation of the vehicle.

    The purpose of the funding is not to buy the vehicle for the duration

    money

    At the end of the semester, you can choose between the following three options: In this case, there are no further fees. Usually, this version is the more expensive of the three options because you did not buy the vehicle during this time.

    Due to the mostly short-term terms of this financing, you have the advantage that you are always up to date with the latest technical knowledge. In this version, the usage rates already paid are credited as a partial purchase of the vehicle. In order to buy the vehicle in full, you have to pay the usually large closing rate at the end of the period.

    The advantageous trend of the lower monthly installments during the credit period compared to conventional financing now had a negative effect. If you want to buy the vehicle but cannot pay the last installment, you only have a choice of three. You take out a loan in the order of the remaining purchase price of the vehicle, the last installment.

    You pay this in constant installments so that you can buy the vehicle during the loan term – without a final installment being due! In most cases, classic car financing is the cheaper way if you are convinced you to want to buy the vehicle. If you have not been tied to a vehicle for a long time, you also have the option of leasing.

    For you, this means that the rental car will be handed over to you for a certain period of time against payment of a one-off fee and a constant monthly fee. During this time, you are responsible for the automobile as for your own model. You also pay all maintenance costs such as B. Inspection or accident repair costs. You do not pay the full car price, but only the depreciation during the contracted period.

    To apply for small credit

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    Apply for a microcredit

    What do you need a lender for? credit bureau entries? recommend some good offers. My last question: Do you prefer to repay the loan volume quickly or slowly? Often the installment loan as a principle alternative solution makes sense, but has the disadvantage for many banks that this form of credit only occurs from a minimum loan amount of 3000 or 5000.

    If, for example, you have to carry out a major repair worth 1,500 USD, you often have no choice but to cover the current account credit. However, there is another option, the so-called microcredit. What is a small loan? A special form of the installment loan is the small loan, which, however, is not offered by too many banks.

    First, small loans have all the essential features that you as a banker will find in the area of ​​traditional installment loans. The microcredit is thus composed of the following key figures: The main difference to the installment loan and at the same time the main feature of the small loan is that there is a different minimum amount of credit than the classic part installment loan.

    In addition to the “normal” installment loans, which are usually granted from a loan amount of 3000 or even 5000 USD, consumers can achieve significantly lower amounts of credit, even for small loans, depending on the home. The minimum loan amounts depending on the provider usually between 500 and 1000 USD. But even in direct comparison, there is a much lower maximum loan amount, which is often in the amount of 5000 or 10000 USD.

    Otherwise, however, the microcredit will work just like any installment loan, which means, above all, that the principal will repay the remaining loan amount at regular monthly installments. The monthly installment includes both the repayment of the loan amount and the interest. The maturity of microcredit typically ranges between 6s and 24m due to the relatively low loan amounts. The term of the small loans is 6 s and 24 m.

    It is good to know that microcredit can be a real way to make a true return on current account credit and the associated use of overdraft facilities. Many small loans are already granted for loan amounts of 500 or 1000 USD. For this reason, consumers are increasingly relying on the use of microcredit because this installment loan variant is significantly cheaper than the use of current account credit.

    This is apparent when looking at the offers in the two financial areas. Although the overdraft rates are still around 10 percentage points, you often get a small loan at an interest rate of six percentage points or even less than 4 percentage points. Small loans can therefore often generate savings of between 50 and more than 100 percent in relation to current account credit.

    Another positive side effect of small loans is that the borrower is induced by the agreed monthly installments to reduce the liabilities taken up. How advantageous small loans can be both over current account credits as well as over conventional installment credits, you can read in the following overview presentation again: * So often the appropriate offer was read out by our Website visitor in the past 30 days.

    When it comes to asking whether you would prefer to take out a small loan or use the existing current account credit line, we are clearly in the right direction: We recommend a small loan. He can avail himself of this special installment loan at significantly lower interest rates than the current account credit line and, in addition, benefits from the fact that his indebtedness is automatically reduced.

    Why can a small loan be used?

    Why can a small loan be used?

    A whole range of consumers ask themselves the legitimate question for which purposes microcredit is actually exploited in reality. Of course, such a loan is usually not sufficient if, for example, the purchase of a new car is to be financed or the loan amount is required for extensive renovation work on the dwelling house.

    However, most households are in a much smaller USD area, often between 500 and 2000 USD. Especially for such purchases, the microloan is well prepared, for example, to finance the following expenses: The microcredit is well prepared for all these and many other costs.

    Is there a microcredit for the negative side of the Hungarian school? Because of the relatively small amount of credit, which is often between 500 and 3000 USD, it is often a so-called idle. Nonetheless, credit institutions will of course also check for small loans whether the borrower’s creditworthiness is sufficient. As with almost all installment loans, credit institutions attribute their customers’ creditworthiness to two special features: on the one hand to income and on the other hand to the information provided by the Federal Agency.

    For every loan, a reasonable salary is a basic requirement, which in many cases also applies to the credit bureau information. However, there are also credit institutions at the closure office with a primarily foreign head office, which waives this credit function and does not need credit bureau information from the borrower. Even in such cases, there is talk of a loan without credit agency, which of course also exists in this special form in the form of a small loan without credit reporting.

    So you can apply via our website and our customer service both classic installment loans and standard microloans and microcredits without request of the Federal Labor Office. In addition, you have the advantage that we perform a detailed comparison of offers for you. This comparison is completely tailored to you and has the consequence that we can determine without the help of the Federal Financial Supervisory Authority (credit bureau) the most suitable for you microcredit.

    So do not take the opportunity to inquire about microcredit issues or send us a free and straightforward inquiry so we can find the best microcredits for you – be it in the “normal” version or as a loan without a loan agency. The microcredit is a special installment loan that is not used by many banks.

    The average loan amount is relatively small and is usually between 500 and 3000 USD. If you have a positive credit bureau entry, you can make a detailed micro-loan comparison without credit bureau through our customer service in Germany. This allows us to determine the best balance for you, even if you have a bad credit bureau entry.

    Mortgage loan – what do you need to know about it? Get the details!

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    The mortgage loan, although not a new product, still remains poorly known and not very popular. Some Polish clients have not heard of it at all, and others mistake it for a mortgage. In practice, however, it is one of the more cost-effective ways to borrow a large amount of funds for free use.

    Mortgage loan – basic information

    Mortgage loan - basic information

    At the outset, let’s explain that to be able to take out a mortgage, you need to have a mortgage-free property. In the case of such a product, unlike in the case of a mortgage, the collateral is for the bank not acquired but already owned real estate. The latter can be, for example, a house, apartment or building plot.

    The most important thing is that the lender can easily sell it and get the money back if needed. Importantly, the property can be your property or belong to a family member or other person who agrees to be mortgaged. Why would you be interested in such a solution? What is a mortgage? What are its pros and cons? When can it be profitable for you?

    Mortgage loan versus mortgage and cash loans

    Mortgage loan versus mortgage and cash loans

    A mortgage, just like a cash loan, allows you to borrow money for any purpose you don’t even need to inform the bank about. However, it involves the need to provide security in the form of real estate. It is the latter that makes the term “mortgage” appear in the name of the loan.

    What is the interest rate associated with each product?

    In terms of interest rate and APRC, a mortgage loan is more favorable than a cash loan, but less favorable than a mortgage. This is due to the fact that the bank gains valuable collateral and good protection of its interests. However, on the other hand, there is no control over how the funds are used. With a mortgage he is willing to offer even better conditions, because in this case he knows exactly how much and for what you will spend money.

    How much and for how long can you borrow?

    Under the mortgage, you can borrow from tens of thousands to several million dollars. In practice, the amount of funding is not more than 80 or 90 percent. (with low own contribution insurance) of the value of acquired property. The loan period can be from a few to even 35 years. In the case of cash loans, depending on the offer, the maximum loan amount is usually USD 150,000 or 200,000, and the longest possible loan period is 8 or 12 years.

    Both in terms of the maximum amount and the maximum funding period, the mortgage is between the mortgage and the cash loan. Thanks to it you can borrow up to 80 percent. property value for a period not exceeding 25 years.

    Most banks, however, will offer less favorable terms – 15 or 20-year repayment time and financing at 50, 60 or 70 percent. In fact, the parameters of the loan depend not only on the details of the offer and the value of the property, but also on the creditworthiness. If your financial standing is good enough and you have a flat worth USD 300,000, you will get a loan for over USD 200,000.

    Mortgage loan – how to get it?

    Mortgage loan - how to get it?

    Currently, every second commercial bank operating offers the possibility of using a mortgage loan. Regardless of which one you choose, you can expect a similar course of loan procedures and documentation requirements. By the way, they are also very similar to those found in the case of a mortgage.

    When applying for a mortgage, you must first complete and submit a funding application to the selected bank. You are required to provide an ID document as well as a certificate confirming the source and amount of earnings and documents related to the property. The long list of the latter includes, among others: the deed of ownership, current property valuation and a certificate of no debt.

    Based on such documentation, analysts will calculate your creditworthiness and assess whether the property can be accepted as collateral for the loan. Within 2-3 weeks of submitting the application, you will receive a financing decision. It will be accompanied by a loan agreement with the final repayment terms.

    How much does a mortgage cost and what fees does it charge?

    How much does a mortgage cost and what fees does it charge?

    If you analyze the mortgage, mortgage and cash loan offers, you will easily notice that from the cost side, mortgage products look much better than a classic loan for any purpose. The best offer of such a loan has approximately twice as high APRC than the best mortgage loan proposal. In turn, the most favorable loan from the most favorable mortgage is less than two percentage points.

    The most important mortgage costs are monthly interest and one-time commission for financing. The amount of interest depends on the interest rate. It consists of a variable interest rate and a fixed bank margin. The bank will charge a higher margin for leaving full freedom in spending funds than in the case of a mortgage.

    The bank commission is always a percentage of the borrowed amount, which, depending on the institution, ranges from about 0 to 4.5 percent. So if you want to raise, for example, USD 150,000, it can range from 0 to 6000 USD.

    When taking out a mortgage loan, apart from interest and commission, you must also take into account several other fees. First of all, the bank may require you to take out a life insurance policy and present a property valuation performed by an appraiser (cost from USD 400 up). You will also be required to insure a house or flat, which depending on its size and location may cost from several hundred to 1000 USD per year. So here we are talking about the same costs that you would have to deal with a mortgage.

    When should you get interested in a mortgage?

    When should you get interested in a mortgage?

    Do you want to borrow several hundred thousand dollars for a dozen or more years? Or maybe you need a relatively small injection of cash, in the amount of USD 10,000 or 20,000? A mortgage will not be a good choice for you. The interest rate on such a product is relatively low, but with a large amount and long repayment period, it will generate high costs. In his case it is also unprofitable to borrow a small sum. Complicated procedures as well as the requirement to make a real estate appraisal and insurance cancel the sense of the whole operation.

    In practice, you should be interested in a mortgage loan when you need more cash (minimum tens of thousands of dollars), and at the same time you are able to return it relatively quickly (preferably in a few years and a maximum of over a dozen). Such a product will work as a source of financing for a costly real estate project. It can be the purchase of complete equipment, a thorough renovation or construction of a garage. It can also be a beneficial way to finance your dream trip, wedding reception or buying a new car. On the other hand, indebted persons may use it to pay off other, higher-interest financial and credit obligations.

    A mortgage can be considered the most advantageous product among those that give you the opportunity to borrow a large amount of money for any purpose. However, since it still entails considerable costs, you should apply to analyzing the offers of banks, and if necessary – use the help of a credit expert.

    O interest car purchase | A interest on buying a car

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    A interest on buying a car from head to toe.

    A interest on buying a car from head to toe.

    Here you can buy your desired MOTORRAD issue as an e-paper. It’s a bit of a black spanie – a rare piece of the race – when he got excited. The repayment of the purchase price is not due for interest on the buyer. Car buyers by financing the purchase by a loan a lot of money.

    Fresh, cheap and toxic products – forums

    Fresh, cheap and toxic products - forums

    “Germany has the cheapest food market in Europe,” said Manfred Krutter of Greenpeace the previous day, saying that every second fruit and vegetable contained a plethora of field poisons. “The strain is increasing from year to year”. ?, he says. For the first time Greenpeace now has the state inspectors for grapes, carrots and apples even more in focus. In fact, guards should go through supermarkets and wholesale markets as well as weekly markets and take samples.

    Ideally, Crautter explains, “every company would get an inspection visit once a year.” Poisoned peppers or dried peppers must be taken out of the market immediately. The auditors in Thuringia cover a good 70 percentage points of all companies, but recognize only 0.6 percentage points of all cases. “It’s obviously not done,” he says.

    Because it is hard to imagine that the greenery of Erfurt is so much better than in Stuttgart. 15 percentage points of all samples in Baden-Württemberg show excessive pesticide residues against insect pests or fungi. One thing is certain for him: “The authorities control too little and too negligently.” The market in which the bittertrauben or the paprika were to be found is not named – a German-language peculiarity.

    When food analysts find the remains of sprays in a daisy family, they publish on the website www.pesticides.gov. uk in which shop the fruit was bought. The environmental advocate Kräutter believes that the threat is considered too low. So you could find up to eight toxins in paprika.

    It is said that even in New Zealand, farmers were cut off from subsidies, which was not a problem for either farmers or consumers. Okay, New Zealand farmers are not comparable to the situation in Germany, it’s just a food for thought. In addition, the grants are abused every year for other occasions (buying a car?). Are there farmers here too?

    February 2017 – the best loan offer of the month

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    Expenses have exceeded your capabilities and you need to quickly take advantage of additional money? You don’t have to be afraid of fees that will make you struggle with financial problems again. Just spend some time to choose the right service, tailored to your needs.

    However, before you decide on a banking product, take advantage of the help we offer. On our site you will learn the most interesting bank offers, as well as promotions, available only for a specified period of time.

    You will save up to several hundred zlotys by choosing a cheaper loan, without losing the advantages that relate to quick access to money or minimal formalities.

    Pay attention to the total cost

    Pay attention to the total cost

    Are you looking for the cheapest cash loan, while hoping that the bank will meet the conditions you care about? Enormous competitiveness on the market allows finding an offer with the best conditions.

    Check which banks occupy the highest places in the ranking of debts for any purpose and be sure to get acquainted with the offers that will interest you. Just a few minutes to compare offers and even send a non-binding request.

    Never suggest a nominal interest rate, because the total cost of credit is very different from the one that encourages customers to take advantage of a given offer. At Loan and Credit you will find out how much loan installment you care for, so you can easily find out which services are cheaper than others.

    Best loan of the month

    We currently recommend in particular a 5% loan with a guarantee, available from Good Finance Bank. To take out a loan, simply submit an application and show your ID card.

    The bank does not require income declarations even in the case of a liability of USD 200,000.00. Good Finance Bank provides loan insurance, but does not require it. The customer applying for debt is not required to provide proof of their earnings or set up a personal account.

    The biggest advantage of the offer is the very long repayment period of up to 120 months. Considering the exceptionally low interest rate and no commission, the loan looks exceptionally good compared to the competition.

    Good Finance Bank guarantees quick consideration of the application and access to credited funds even within one day of signing the contract. The offer is available online so you can save both money and time spent on completing all formalities.

    Who is the 5% loan guaranteed for?

    The service will certainly interest people who want to spread their debt over a longer period of time to save on a monthly installment.

    In addition, it is one of the most flexible loans on the market in terms of the amount of liabilities. Remember, however, that the maximum loan value you can apply for will depend on your creditworthiness.

    Cancel car loan: free examination of your contract

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    Car loan revocation only for vehicles that are provided with a fraud software?

    Car loan revocation only for vehicles that are provided with a fraud software?

    It is not decisive whether the financed car is provided with fraud software. The decisive factor is whether you have financed your car purchase with a loan. In principle, any loan contract concluded by a consumer as a borrower will be eligible for a successful revocation – whether a diesel or gasoline engine was financed.

    In particular, credit agreements concluded on 11 June 2010 have proven to be sensitive to recourse since new consumer protection directives applied from that date. However, many contract documents did not yet contain the amended mandatory information and can therefore be revoked today. An example is the lack of notice of termination for good cause under §314 BGB, which has already been confirmed in proceedings before the Munich district court and the Berlin district court as a reason for car loan revocation.

    Withdrawal Buying a car – What is it?

    Withdrawal Buying a car - What is it?

    If you have taken up a loan as a consumer when buying a car, there could be a right of withdrawal. Decisive for a purchase of a car Right of revocation is, whether in advance all instruction obligations were followed. We offer to check your loan agreement for a right of withdrawal free of charge. Objectives are the return of the car and the reimbursement of your payments made.

    Can every car loan be revoked?

    Can every car loan be revoked?

    Unfortunately, not all car loans can be revoked. Car loan agreements concluded before 11.06.2010 generally turn out to be legally compliant. Furthermore, only consumers, but not entreprenUSDs can make use of the right of withdrawal. If you want to revoke the contract, this is only possible if you were a consumer borrower.

    When does the car loan revoke the revocation?

    When does the car loan revoke the revocation?

    Normally, if loan agreements are legally flawless, the withdrawal period is only 14 days. In case of errors in the contract, however, the revocation never expires. It can therefore be explained without a time limit, even many years after graduation.

    How do banks react to the car loan revocation?

    How do banks react to the car loan revocation?

    The banks generally reject the revocation of the loan. We can report this from our consulting practice. It therefore basically requires the law enforcement with the help of a specialized law firm, so that a judicial verdict can be positive for you. In most cases, banks will also seek compensation for loss of value or compensation for the mileage already driven. This practice is currently highly controversial. A clarifying verdict is yet to come. Whether a value-for-use or a compensation for car loans revoked, is currently the subject of several upper court proceedings. “In case of success, you will not only refund the deposit and all capital payments, but also all interest payments and compensation as compensation, as the Bank could manage the money, but not you. The foundation of this view is, inter alia, a ruling of the Federal Court of Justice, according to which a borrower can reclaim all services connected with the business in case of revocation.

    Will the costs for the revocation be covered by my legal expenses insurance?

    Will the costs for the revocation be covered by my legal expenses insurance?

    We get a cover letter from your legal expenses insurance free of charge. Whether a traffic protection insurance financed the cancellation joker, depends on the individual case. Decisive for the cover protection for the revocation of loans is the respective insurance policy. Information about this can be found in the General Legal Protection Insurance Conditions (ARB) and in the insurance policy. The valid ARB for the individual contracts are usually found on the Internet, usually on the website of legal expenses insurance. Tip: If the legal expenses insurance does not cover the revocation of the car loan, there is still the chance that it must cover the enforcement of your claims for damages, which you are entitled to because of the exhaust fraud against the vehicle or engine manufacturer or your car dealer.

    How does the revocation of a car loan work?

    How does the revocation of a car loan work?

    The Withdrawal Joker works on car loans according to the following principle:

    1. Error in the cancellation policy

    The cancellation policy attached to the loan agreement must contain an error.

    2nd consequence: cancellation period is still running today

    Then the withdrawal period, which is normally only 14 days, has not yet started to run. You can still revoke the car loan or loan agreement within the revocation period.

    3. Loan Revocation also brings down car purchase

    Now you have the unique opportunity to cancel the entire vehicle purchase and get back the deposit and the installments already paid.

    Why does a car loan revocation make economic sense?

    Why does a car loan revocation make economic sense?

    Loss of value up to 50%

    Up to 50% of prices for used diesel have collapsed. The Zentralverband Deutsches Kraftfahrzeuggewerbe (ZDK), together with WirtschaftsWoche, conducted a survey of 1817 car dealerships.

    Diesel car partly not for sale

    The car dealers say in the study that diesel passenger cars with the USD 5 norm are not at all or only with hardware retrofit for sale. In addition, the study found that dealers use second-hand USD 5 diesel with 30 to 50 percent discount.

    Loss of value also at USD 6

    Even supposedly not affected by the diesel problem USD 6 cars are not spared the price erosion. For example, the Central Association of the German Motor Vehicle Trade stated that 76 percent of retailers currently consider that sales are hardly or not at all possible.

    What do I get for a revocation for my car?

    First of all, it should be noted that if you revoke your car loan, you will certainly receive more than on the open market, which has been weakened by discussions about driving bans, fraud software and the end of diesel to the detriment of the diesel owners.

    In short: If you revoke the car loan you will earn more than the current market price.

    What are the chances to enforce the car loan revocation in court?

    The chances are good in our opinion. In any case, the banks are very interested in preventing judgments to their detriment.

    This shows the following example:
    A VW buyer had revoked a financing of the VW Bank before the Berlin district court. The court signaled that it recognized errors in the cancellation policy. The VW Bank GmbH even offered the plaintiff to give him the financed Touran and also to reimburse all previously paid credit installments. However, it requested that the plaintiff withdraw the claim and sign a silence obligation. This offer was rejected by the applicant.

    Credit agreement – loan parameters

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    When entering into any loan agreement, you usually have to pay the bank a commission. This fee is sometimes called a commission for examining a loan application, starting a loan or signing a contract. Depending on the type of financial product and the details of the offer, it is either a specific amount or the equivalent of a percentage of the loan.

    In the case of cash or revolving loans, the amount of commission is predetermined and independent or dependent only to a small extent on the customer. Banks are already guided by different rules when granting mortgage loans. In their case, you have a real impact on the size of the fee, and sometimes you can even convince the bank not to collect a commission.

     

    This parameter may depend on:

    loan amount – with a larger loan, the bank may apply a lower commission due to higher interest earnings;

    loan agreement

    LTV, i.e. the ratio of the loan amount to the value of the property purchased on credit. Today, the maximum accepted LTV level is 80% or 90% (if own contribution insurance is purchased). The bank may agree that a loan with a lower LTV, for example not exceeding 50%, will be subject to a correspondingly lower commission – instead of 2% it is 1%;

    scoring, i.e. assessing your creditworthiness. When you submit an application, the bank will compare your profile as a loan applicant with the profiles of customers who have already incurred commitments and systematically regulate them. The greater the similarity, the more points you get and the more likely you are to have a lower commission;

    use other bank products or promotions. The reduced commission can be applied during the promotional period, or in a situation when you use the offer of a personal bill or credit card;

    type and purpose of the purchased property. When buying a flat for rent or a luxury apartment, you can meet different credit terms than when you buy a “regular” house or flat for your own use;

    financing period. It also happens that the bank makes the amount of commission dependent on the length of the period during which the loan is repaid.

     

    Loan interest rate

    Loan interest rate

    As far as the cost side is concerned, the fragment devoted to interest on funds is one of the most important provisions of the loan agreement. He decides on the total costs of the liability as well as the amount of installments paid. In the case of a mortgage, cash or car loan, interest is accrued from the very beginning of the contract.

    With a revolving loan you pay them only when you use the limit granted. Using a credit card – after exceeding the non-interest period of 50 days. Regardless of the loan product, its interest rate consists of the interest rate and bank margin.

    Short-term loans usually have unchanged interest rate throughout the contract period, while in long-term liabilities it is variable and depends primarily on the level of interest rates.

     

    Bank’s margin

    As a rule, the bank’s margin is constant throughout the entire loan agreement, regardless of whether it is short-term or long-term loans. The exceptions usually apply to situations in which the borrower has not fulfilled certain contractual conditions. If you use the “promotional margin”, but for example you stop paying in installments, or opt out of an additional banking product, the lender may increase your margin. It also happens that the bank uses the increased value of this parameter for a certain period of time – for example, until the entry into the mortgage becomes valid for its benefit.

     

    Interest rate

    Possible changes in the loan interest rate are the effect of changes in the WIBOR reference rate, i.e. the interest rate at which Polish commercial banks borrow money from each other. If you take out a loan in euros, then the changes will depend on EURIBOR, and when in pounds – on LIBOR. Depending on the market situation and the construction of a given loan, the interest rate may change every 3 or 6 months. Obviously, an increase in the reference rate leads to an increase in the loan interest rate, while a decrease in the rate leads to a reduction in loan installments.

     

    Loan repayment rules and dates

    Loan repayment rules and dates

    Each credit obligation has the fact that it must be repaid on time. The loan agreement specifies the terms and date of loan repayment, and most often also the amount of installments paid. A credit card or revolving loan does not impose specific amounts and payment dates, but involves regular payment of a set minimum debt amount. In the case of a mortgage, there is no such flexibility, but you can choose the type of installments – decreasing or equal.

    The type of installments chosen determines the total cost of the liability, the amount of monthly charges, or the creditworthiness obtained. Since decreasing installments are high in the initial repayment period, and the bank calculates the capacity taking into account the amount of the first installment, in this case your application will be rated worse. On the other hand, from the beginning you pay back large parts of capital, which translates into lower total loan costs. Equal installments generally remain unchanged (except for changes due to changes in interest rates), which usually means higher total liability costs and higher creditworthiness.

     

    The total cost of credit and APRC

    The total cost of credit and APRC

    The interest rate and commission are the two most important, but usually not the only costs of using the loan. Therefore, before concluding the contract, be sure to read the section devoted to all costs associated with the obligation, i.e. also those resulting from compulsory insurance, additional banking products, or inspection of the property carried out by the lender (in the case of a mortgage contract).

    In the contract you will find the Actual Annual Interest Rate, i.e. a parameter that expresses the percentage of all costs associated with the loan. Based on the APRC value, you can easily compare a given offer with other offers and assess its actual profitability. In practice, due to various types of additional costs, this indicator shows the attractiveness of a given loan better than, for example, interest rates.

     

    Early payment of the liability

    Early payment of the liability

    If you inherit your assets or otherwise improve your financial condition, you can pay off any part or all of your loan. This law is given to you by the Consumer Credit Act. What’s more, when you decide to overpay the loan, you will not incur costs for the period of the contract, which was shortened. In the case of mortgage loans, and sometimes also other liabilities amounting to a larger amount, however, the bank charges a commission for early repayment of the loan. The maximum amount of such fee and the principles on which it is calculated are set out in the Consumer Credit Act.

    The loan agreement may also contain a clause saying that you must inform the bank of your intention to overpay the loan before making a deposit. Importantly, the document may indicate that partial repayment will not automatically shorten the loan period. In such a case, an annex to the contract must be prepared, which sometimes involves an additional fee. The annexed amounts of loan installments also appear in the annex.

    Maximum available loan amounts 25% higher

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    Poles’ creditworthiness increased by as much as 25 percent over the past year. Just because of lower interest rates on loans, creditworthiness increased by 18 percent.

    In addition, the extension of the creditworthiness calculation period by 5 years translated into the possibility of taking a higher loan by a further 4-6 percent.

    Market changes, a decrease in interest rates on loans

    Market changes, a decrease in interest rates on loans

    As well as the loosening of the credit policy by the Polish Financial Supervision Authority, and in particular the extension of the repayment period when calculating creditworthiness, are the main components that made up the average creditworthiness increase by 25 percent.

    In the last months of 2012 and the first half of 2013, the Monetary Policy Council reduced 8 interest rates, by a total of 225 basis points. This translated into a decline in the Wibor rate, which is significant for borrowers.

    We observed its decline several months before the first reduction of NBP rates and since July 2012, within a year and a half, this rate has fallen from 5.14% to 2.70%. Such a large decrease caused a reduction in loan installments. For every 100 thousand indebtedness, when taking a loan for 30 years, the monthly installment fell by about USD 150 from USD 640 to USD 490.

    The consequence of the lower installment

    The consequence of the lower installment

    Was higher creditworthiness. At the same level of income, a lower monthly load allowed for a higher loan. From January 2013 to January 2014, only because of lower interest rates the average creditworthiness increased by around 18 percent. For example, a person earning 5000 net at the beginning of 2013 could take a loan in the average amount of USD 390 thousand. Only due to a lower interest rate and a lower installment within 12 months, the available amount increased to about USD 460,000.

    Added to this is the second important component, which increased the maximum loan amounts, i.e. the extension of the maximum creditworthiness calculation period. The Polish Financial Supervision Authority, in Recommendation S adopted in June 2013, changed the rules for calculating creditworthiness.

    So far, for the purposes of its calculation, banks had to assume a maximum loan repayment period of 25 years. Pursuant to the new regulations, this period was extended by 5 years. This method of calculating creditworthiness increased the available loan amount by about 4-6 percent.