Know about Good or bad loan?

Many people nowadays or are in financial distress for a variety of reasons, from losing their jobs, pay cuts, to a craving for things of all kinds (DVD, TV, sports equipment, or hire-purchase). Finally, the repayment of old debts by new debts, where people fall into a debt trap, from which the difficult way back.

And so, some are solving the problem with a cash loan of money offered by advertisements in newspapers, magazines and television, and in which the Internet is full. “Money now, on hand and without confirmation of receipt or check of the bank register” headlines, trailers for people without funds. It is a very tempting temptation, if we get cash on hand at home in the living room, nobody asks us anything, but…

Before we decide on a cash loan

Before we decide on a cash loan

We should answer three questions. And if possible, so that we do not financially harm and sit on the lime to possible usurers:

Do we really need the thing we long for, or is it just the satisfaction of a sudden desire that will soon pass? Today’s world is built to HAVE, owes both the individual and the state, but we should live with what we have and not what we want. See practice case:

“There are people who get into debt because of alcohol, drugs, nightlife, others because of a sudden loss of standard, and suddenly there is nothing to pay a mortgage and a car. From my point of view, it was a coincidence of three circumstances: irresponsibility; a certain inability to look to the future, coupled with an extreme desire for certain things; sharp elbows, inexperience, respectively. abuse.

For example, irresponsibility was the reason that I paid over 40,000 dollars in finals to the Prague Public Transit Company.

The inability to plan life was reflected in CD purchases. The culmination was when I left my (in the 1990s) biggest Christmas reward of USD 10,000 in the CD store – a moment of joy was replaced by unpleasant uncertainty, the feeling that I had done something wrong… today I have over 1,000 original CDs at home.

Blurred elbows led to the fact that I work in the finals riding my own car that I was paying myself, and still suffered from the petrol mission because the limit fails me. I worked for eight years as a sports editor (cycling). This loyalty to my employer cost me about two-thirds of my net salary per month. A change of work followed. Real estate broker – it promised better profits. I bought a better car, but used again and the next day tow to the service. Repair for 30 thousand dollars – at that time I paid a mountain bike. ”

How much to borrow?

How much to borrow?

We should borrow as much as we can repay. Each of us has different standards, someone doesn’t even borrow because of the panic of the debt, another borrows happily from everyone who borrows it, and is convinced that it will still manage when one day comes to an end because it is in a debt trap.

The general principle is as follows: 25% of the net income of a family or individual should consist not only of repayments but also of other collateral for persons and property or savings. 75% is then left for consumption, such as housing, clothing, food, drugstore, telecommunications, transport, tuition, hobbies and holidays. If the 25% threshold is exceeded, this is becoming the first serious sign of future financial problems.

In general, we can say that we lack the so-called financial literacy, when our ancestors managed to keep with an ordinary pencil in hand and notebook home accounting, wrote down incomes and expenditures and guarded both the revenue and expenditure side very anxiously. It is astonishing that in times of powerful computers and accessible education to all strata of the population, we cannot manage family budgets.

Who do we borrow money from?

Who do we borrow money from?

If we borrow cash from a bank that has a banking license of the Bank in Czech(without this license, the bank cannot do business in the Czech Republic) we have a guarantee of state supervision over the terms of the loan agreement, which implies that the terms are guaranteed in advance and are in banking market practices. It also means that interest rates are up to approximately 20% pa and in some banks, the loan can be repaid even without a penalty. Which banks provide this service for free and which are not shown in the tables below.

In March this year, the Chamber of Deputies passed the Consumer Credit Act. According to banks, this law should significantly eliminate the severe impact of usury on the ever-increasing indebtedness of Czech citizens, which is the current trend in society. Above all, this law should prevent the efforts of private entities to acquire the assets of people in distress through so-called quick loans for property.

Anyone who provides such loans will have to examine the creditworthiness of the client in the future, which is not common with some non-banking entities today. Conversely, many non-bank providers offer loans directly with speculation that the client will not be able to repay them and will subsequently heal on their assets.

The problem of usury loans is often not in their interest rate, but in the details that trap those clients who are unable to repay them and are subject to disproportionate penalties. In this respect, the new law, which will apply from 2011, is clearly beneficial. However, the real turning point in the fight against usury would be the subordination of non-bank lenders to the supervision of the Bank in Czech.

Under the new law, which is now going to the Senate, the Czech Trade Inspection Authority should continue to supervise non-bank lenders.

Mortgage for apartment, house – home loan

Mortgage – a word that can have a different meaning for everyone. Indebtedness of real estate can mean for someone a way to seeming freedom, building a family fireplace, satisfying the desire for their own property.

For another, it is a commitment that cannot be accepted. It can also be a way to a good investment. Whether you belong to the category of mortgage loan supporters or not, we have decided to summarize for you the possibilities that we have in the Czech mortgage market.

The types of mortgage loans are abundant – on the following lines, you will read everything that might interest you – from the conditions of mortgage lending to the types of mortgage loans that can be obtained. When is it worthwhile to refinance your existing mortgage loan? Read it!

Before you decide on a mortgage

Before you decide on a mortgage

Before you decide to search for your own property for housing or investment, think through everything! It sounds like a cliché, but it’s important to be able to calculate everything well.

If you want to get into debt for several decades, let’s calculate the amount of repayment and do not forget other fees related to housing – spending on services, energy, garden maintenance, necessary repairs, and renovations… calculate everything and try at least 3 months with a budget that will be the result of the subsequent purchase of property and the need to repay the mortgage loan. You didn’t have a budget problem? Congratulations, financially you can plunge into the mortgage.

If you are planning to buy a property and keep it as an investment, it is good to remember that this is not the best time to buy a property for that purpose. Prices in larger cities are very much priced and mortgage rates are starting to rise slowly. This does not necessarily mean that buying a property is disadvantageous.

It is particularly advantageous for investors who plan to rent real estate for commercial purposes (not for traditional permanent housing, where a mortgage financing purchase may not be profitable), or for investors who want to save their own funds in “permanent values”.

For many years now, real estate has been a barometer of economic health and a store of value. Nowadays, when you get no more than 0.5% pa in interest on savings accounts with larger amounts, the investment with a yield of about 3.14% pa (average yield of an apartment in Prague according to Global Property Guide statistics) may seem advantageous.

Indeed, we have already written about the profitability of real estate and rentals in our previous article “How to Rent an Apartment”. Do not forget, however, that renting an apartment is not only yield but also a concern. You may come across non-solid tenants, or your property may be the target of a natural disaster. And of course, you will have to take care of the property as a landlord or arrange for someone to do it for you.

And where do I actually want to live?

money

 Decide what type of property you prefer. In large cities, the most popular smaller apartments with 2 + kk. But such an apartment may not be enough if you are planning (even hypothetically) a family. In addition, one room can mean a lot and many worries in a few years.

Do you prefer a family house? If you do not have experience with construction, will you choose a turnkey house, or buy an existing property, or will you build yourself?

How much do you want and can you invest in the real estate so that you can even save money to repay the mortgage loan? Do I want to buy the property myself or include my partner/family?

You must have a clear answer to all these questions before searching for a property.

Where to find your options

cash

If you have weighed all the pros and cons and still have decided to go to the mortgage, then it is good to visit the bank, or banks before you even get the property. First of all, it is good to find out the conditions in individual institutions (they may differ in the number of interest rates and fees, but also the requirements for the client’s creditworthiness and the offer of mortgage options) and especially to check how much the bank actually lends you.

However, bank offers may have different “hooks”, so we recommend choosing a capable financial adviser who has experience, all “but” will explain, can negotiate better conditions than they give you at the branch and save you a lot of your precious time! If you do not know anyone like this, we will be happy to recommend one of our proven advisors.

Moreover, since last year, higher demands have been placed on the creditworthiness of clients than before, thanks to new CNB recommendations. These are called DTI and DTSI.

Pay contactless with the credit card – prepaid credit card.

What may seem like magic to grandma or grandpa is now a matter of course for modern people, contactless payment with a credit card or checking card. And it is a real relief for older people, as you no longer have to push the bank card around and, of course, the wrong way round into the reading slot of the payment terminal.

The contactless payment with the credit card works via the NFC which means “Near Field Communication” in German. This method is an international standard for short-distance data transmission and works by holding your card close to the reader. This then reads the data and, after the payment has been made, sends a signal to confirm that the amount to be paid has been debited.

Benefits

Benefits

On the one hand, it is a much more secure method compared to a bank card, for example, since no PIN is entered and no one can access private data. Other advantages include hygiene. You don’t touch any money that went through thousands of hands before, just your personal card.

Also, holding the credit card to the device is much faster than the conventional processing process. You don’t have to carry small change around to be able to pay appropriately! Your card can do that too. The security aspects are no less reliable with this method than with your bank or credit card, since the same high security standards are also applied here, such as dynamic security codes that expire after your one-time use and so there is no risk that they could be copied.

Conclusion

Conclusion

In any case, contactless payment is a very innovative payment method that will become increasingly popular in the future. The reasons for this are also obvious! Why should you carry money around safely when you can do all of your business without money?

There are already places all over Germany where contactless payment is possible. And the trend is increasing. At the moment there are usually rest areas that already offer this service, but in the course of time contactless payment will also prevail in city centers and other shopping opportunities and consolidate its place in society.

Loan, finance – is there a difference between the terms?

Three frequently used terms from the world of business, the meanings of which are often mixed up. In addition to various differences, there is, in fact, a close connection, and both will be explained in more detail here. The most common concept is that they relate – both from an entrepreneurial and a private perspective – to the source of funds; And “medium” means “capital” here.

In other words: All three of the above terms deal with the procurement of capital, whereby the financing itself represents a kind of generic term that refers to every conceivable form of capital procurement. It also covers funds from its own sources, so-called equity. Only with loans and credits does the situation become more concrete, that is to say: These are methods of obtaining debt.

So let’s start with a closer look at the loan

The difference between which and the directly superordinate term, credit, by the way, is that a loan is a form of the same. The loan is a long-term loan in which a credit institution provides a fixed amount in whole or in part.

A distinction is made between the nominal amount and the actual amount of money paid out – also called the nominal amount. This difference is called the damnum, which in turn can appear as a premium (surcharge on the repayment amount) and a discount (discount on the payment amount).

The repayment of the loan plus the interest accrued is made in installments, or in a sum at the end of a previously contractually agreed term, which in practice usually extends over several years.

The explanation of the loan already allows some conclusions to be drawn about the nature of the overarching and more comprehensive term, credit. Generally speaking, this is the transfer of capital or temporary purchasing power.

As mentioned earlier, the loan is just a form of a loan

As mentioned earlier, the loan is just a form of a loan

It must, therefore, be differentiated from other forms such as guarantee, acceptance or discount credit. Loans are usually differentiated according to maturity: there are short-term loans with a term of less than one year, medium-term loans with terms of between 1 and 4 years and finally the long-term loans with terms of more than 4 years, which in most cases the loan that has already been treated also belongs.

In addition to various other features, loans can also be differentiated according to their purpose or their collateral. Common to all forms is that it relates to borrowing in relation to the borrower (the debtor), which brings us back to our generic term, financing.

This ultimately stands for all measures relating to fundraising and repayment, and therefore also includes self-financing or self-financing without borrowing.

Farmer’s loan – where to look?

Profitable agricultural activity is not possible without modernization and investment. A good source of additional resources may be loans to farmers – products created to support growing farms.

The size of the farm also has an impact on the interest in this type of products: the larger it is, the more willingly farmers look for additional funds. Entrepreneurs involved in agricultural production can take advantage of the wide range of government banks. However, the possibilities do not end there: many banks have prepared a special offer for this professional group.

Farmer’s loan

Farmer

Agriculture stands out from the rest of the economy. Substantial dependence on atmospheric conditions is associated with greater risk, and seasonality affects the income irregularity. For this reason, loans to farmers should take into account the specificities of the industry and be tailored to its specific needs. We will find them in the offer of many institutions – not only small cooperative banks, but also large universal banks.

They usually take a formula similar to corporate loans. Investment loans have been provided for farmers who want to finance investments, while revolving loans have been prepared for those who intend to finance current operations in this way.

Agro loans at Cream Bank

Agro loans at Alior Bank

Cream Bank has prepared a rich offer of loans for farmers. Constant access to new funds is provided by the Agro revolving loan in the credit account, the Agro overdraft facility operating on a similar basis is also an alternative. A purchase product is a special product used to finance the purchase and storage of seasonal agricultural products.

People looking for investment funds should in turn be interested in the offer of investment loans for farmers: Cream offers its clients an Agro investment loan, enabling financing of any investment projects, and an Agro loan for the purchase of agricultural land.

Loan for a farmer at Good Finance

Loan for a farmer at BNP Paribas

An even wider cross-section of loans to farmers was prepared by the Good Finance bank. Customers looking for revolving loans will find several products tailored to their specific needs. The Agro loan is characterized by quick application processing, at the same time it can reach USD 2,000,000 with a loan term of one to five years.

Farmers seeking funds for the purchase of agricultural inputs should in turn be interested in the Advocate Loan, whose repayment can be spread over up to 84 months, and in some variants it is not necessary to provide any kind of collateral. Lite Lender is also an interesting product. An amount of up to USD 1 million can be repaid over a period of 15 years. It is also possible to establish collateral on the property belonging to a third party.

The investment loan offer for farmers at Good Finance is based on two products: Agro Progres enables the payment of high amounts and the repayment deadline of up to 30 years. In turn, Agro Progres Premium, addressed to owners of larger farms, gives the possibility of cashless settlement with equipment suppliers and settling all formalities directly at the bank branch.

Credit for a farmer at Best Lender

Credit for a farmer at Credit Agricole

Best Lender is another bank that looks at agricultural activities in a special way. The investment loan for farmers offered allows for relatively cheap financing, with a margin of 2% and a variable rate based on 3M USD. The repayment period can be up to 12 years.

This is an interesting offer, especially for farmers who have obtained EU funding. In this case, it will not be necessary to pay your own contribution, while the part of the investment that is subject to subsidy will be financed through a bridge loan. A similar mechanism can also be used when waiting for a refund of the VAT due.

Farmers who want to buy agricultural land or real estate can, in turn, take advantage of the land loan on their own. The maximum investment cost is USD 2 million, while the bank will require only 10% of its own contribution. The installment repayment schedule will be adjusted to individual dates of obtaining revenues, and the repayment itself can be spread over even 20 years, postponing the repayment of capital for two years.

Attractive loan offers for farmers

Attractive loan offers for farmers

Running a farm can become a very profitable activity. To succeed, however, it is necessary to find the right forms of financing. In addition to their own savings and funds from EU subsidies, farmers can also find attractive loan offers from banks. Particularly favorable conditions are offered by preferential loans in which the Agency for Restructuring and Modernization of Agriculture participates.

However, this is not the only offer addressed to farm owners. They can also count on standard working capital and investment loans, adapted to the characteristics of their business. Many institutions propose, among others making the repayment schedule dependent on income or enabling unpaid EU subsidies or VAT due to be covered by bridging loans.

Cheap loans only with short terms, salary receipt and top collateral.

Assess the credit applicants’ credit rating

Assess the credit applicants

This also includes scoring and the budget statement. It is conceivable that the applicant chooses a short term of only a maximum of 24 months and is a police officer or university lecturer by profession. Then there may be a chance for a loan on favorable terms. But it is also conceivable that no one is granted exactly these conditions, but that they are purely decoy offers. Experience has shown that many loan seekers also accept higher interest rates once they have made a loan request. Even if the customer asks, it is justified that it has to do with the credit rating. Many banks also offer interest depending on the term.

Borrowers have no chance at all at a low-interest loan

A longer loan term always means an increased risk for the bank and therefore the longer the chosen term, the higher the interest rate. With terms of 72 or even 84 months, the borrowers have no chance at all at a low-interest loan. The highest effective interest rates are required here. While the normal consumer still sees the reason for the increased risk with a longer term, the reason for the credit rating still remains opaque and vague. Bank employees who have been employed by their employer for more than 10 years and can prove a high income of over 2,000 USD also get a loan that is advertised with 4.9 percent, ultimately with a term of 84 months granted only with 11.99 percent.

With a loan of 25,000 USD, this means that, including residual debt insurance, which was also made a condition, a total loan of over 38,000 USD. So 13,000 USD in loan costs. This is 50 percent of the loan amount, which must be paid for the cost of the borrowed money. Loan seekers should always obtain offers from several banks and compare them with one another. It is never the case that the bank with the cheapest promises really sells the cheapest loans. For a comparison, it also makes sense to get an offer from a bank that is advertising from the start with 6.9 percent.

Is it worth paying off an advance loan? Find it out!

Many people who have financed an asset, such as a car or property, dream of paying off the advance financing. After all, nothing like getting rid of payments for good and not paying interest anymore, right?

In fact, it depends! It is not always advantageous to make this anticipation. There are a few steps – and calculations – needed before concluding whether or not it is worth doing.

Then check out the information we have gathered to know everything you need on the subject!

How does financing interest work?

How does financing interest work?

As you may know, financing is a request for credit from the bank. He offers them money for the customer to make a purchase and this amount is returned in installments with increased interest and other fees.

The number of installments, their price and the amount of interest are characteristics that can vary a lot according to each bank. In addition, the conditions agreed in the contract also influence whether the installments will be larger or smaller, for example.

The system used by the bank to grant the financing can work with fixed value installments or with constant amortization. In this second case, the value of the installments gradually decreases.

In both situations, there is an interest rate that can be calculated on a monthly or annual basis so that you can evaluate its effects on payments.

What happens when discharge is anticipated?

Whenever a monthly payment of the financing is paid, the amount referring to the portion of the money borrowed and another amount related to bank fees are included. In advance, a discount on these fees is granted.

In other words, you still have to pay the amount granted by the bank in full, but you can pay less interest when anticipating the discharge. However, calculating this discount does not consist of simply removing all fees from the final amount.

In fact, some fees continue to be charged even when the customer chooses early discharge. The discount is calculated in proportion to the interest and the time that would still be left until settlement in the agreed period.

It is also necessary to pay attention to another thing: in financing contracted until 2007, an advance payment fee may be charged. After that year, that fee was extinguished. So, those who requested at that time need to check the information in their contract.

If you want to simulate the proportional discount conditions for your financing, you can use an advance calculator. It performs the calculation automatically and facilitates its analysis.

Is it worth paying off advance financing?

Is it worth paying off advance financing?

And now? Is it worthwhile to anticipate the discharge of a loan? As you saw, this answer depends on some factors and, mainly, on the information. It is only possible to understand if the decision is advantageous by analyzing the calculations and knowing the conditions offered by the bank.

Whether it is worth it or not will depend on each case. Therefore, it is essential to reflect on the details involved in this matter. If you are considering anticipating your financing, check out some essential elements that should be noted.

All bank fees

It is not uncommon to see people who make a quick calculation considering interest rates and decide that it is worth paying off a loan. However, this account does not always close. That’s because there are other fees involved in it.

The ideal is to calculate the total effective cost of financing – the GFI. And how to get to him? Considering not only interest but also the other costs of the operation. An example is the reference rate (TR), a general indicator of the Brazilian economy.

There may also be built-in costs with insurance and administrative fees, as well as taxes. Normally, these amounts will not be discounted in the payment of the financing, and the discount will be only on interest – which may make the anticipation not worthwhile.

The difference between an investment and discharge

money

Even considering the calculations we quoted, you may think that it is advantageous to pay off the financing to use the money you have. But there are other attractive options, like investing the amount and getting interest from it.

This is an interesting alternative because it can even help you pay the financing installments. And the way to know if it is better to anticipate the discharge or invest the money is to compare the yields.

The total effective cost of financing must be compared with the net return on investments of interest. In this way, it is possible to verify which is the higher value: if it is the GFI, it may be advantageous to pay the installments.