The government is preparing a revolution in mortgage loans – who will benefit?

Until now, domestic law did not regulate mortgage loans very precisely. Although the ‘mortgages’ were listed in the Consumer Credit Act, they are only affected by a few regulations from the legal act (e.g. related to mandatory elements of the contract). Since 2007, the Good Finance Association has been primarily involved in the regulation of the mortgage market.

However, it should be remembered that the subsequent “Good Finance” issued by the GFIC did not have the status of an act or other legal act. Banks complied with these recommendations only because of possible sanctions for financial supervision.

The legal status of mortgage loans will soon change as the government is preparing a special law. This legal act confirms the principles previously set by the GFIC and also introduces several new solutions that will be of particular interest to consumers.

Only new borrowers will benefit from the proposed regulations …

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As a preliminary remark, it is worth mentioning that the introduction of the law relating only to mortgage loans was enforced by EU legislation. Poland as an EU member state must implement to its right the solutions provided for in Directive 2014/17 / EU of February 4, 2014, on consumer credit agreement related to residential real estate.

The introduction of the mortgage law is also associated with the fact that important rules regarding “mortgages” are currently dispersed in several different legal acts.

The bill being prepared aims, among others, at improving the position of a consumer taking out a mortgage. It is worth noting that all new regulations will apply only to consumers, i.e. people who take out a mortgage for purposes directly unrelated to business or professional activity.

The Mortgage Act will not cover, for example, entrepreneurs lending funds needed to buy business premises. The benefits of the new regulations will not be able to count the number of people who are consumers but have entered into a loan agreement before entering 

The new act will limit, among others charging a commission for early repayment

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The act prepared by the government provides for many detailed changes which concern not only the principles of offering and granting mortgage loans but also financial intermediation.

Several aspects can be identified, particularly of interest to future borrowers. The proposed regulations provide for the following solutions:

  • No commission for early repayment of a loan with a variable interest rate after 36 months from the conclusion of the contract.
  • Limitation of the commission for earlier repayment to the number of costs incurred by the bank in connection with the earlier repayment (the limitation shall apply irrespective of the type of rate loan interest rate).
  • Introduction of a special mathematical formula according to which the maximum amount of commission for early repayment is to be calculated (both loans with variable and fixed loans will be used) interest rate).
  • Confirmation of the principle according to which a loan in a foreign currency can be taken only by a Pole who does not bear exchange rate risk (income currency = liability currency).
  • Introduction of the possibility of withdrawing from the mortgage contract (without giving reasons) during the first 14 days of its conclusion. The only cost associated with the withdrawal will be interesting for the period of the contract. The borrower has to submit a declaration of withdrawal on the form provided to him after the conclusion of the contract.
  • Introduction of the obligation to obtain the GFI permit for persons dealing in mortgage brokerage. This requirement is expected to increase the quality of services provided to consumers. The draft law on mortgage loans also provides for detailed requirements for intermediaries (e.g. regarding criminal record and education).
  • Launch of the register of credit intermediaries, which will be publicly available and kept by the Good Finance Investment Corporation.
  • Exclusion of the possibility of selling other banking products together with a mortgage (the exception applies to the free account for servicing the loan).

The ban on tying (cross-selling) of other financial products together with mortgage loans, mentioned in the last point, can certainly be worrying for banks. It’s no secret that ‘mortgages’ bring banks relatively low interest, fees, and commissions, and the profitability of granting them depends to a large extent on the attached policies.

Thus, the introduction of a ban on cross-selling may result in limiting the availability of mortgage loans (especially for the least affluent consumers).

After the changes, the borrower will still be liable with all his assets

After the changes, the borrower will still be liable with all his assets

Contrary to the hopes of many people, the Mortgage Act does not introduce radical changes in the method of financing real estate. In the context of “mortgages”, it is often proposed to limit enforcement to only the loaned property.

Such an American model is beneficial for debtors who do not have to be afraid that the bailiff, apart from the house or flat, will also take up other assets and property. regularly withdraws part of his salary.

Burn loan installments by up to 30%. 

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It is worth realizing that the prospect of limiting the scope of enforcement of mortgages, apart from the advantages, would also have serious disadvantages.

Due to the financial stability of banks, such a change could only be applied to new contracts. After a possible limitation of enforcement to the borrower’s apartment or house, banks would reduce the limits on financing real estate (e.g. up to 60% of the purchase price).

Such a change would result in an increase in the required contribution and a decrease in the availability of new loans.

Online Small Loan Without Credit Bureau loan repayment rates should be as low as possible

What points need to be considered regarding online small loans without Credit Bureau?

What points need to be considered regarding online small loans without Credit Bureau?

First of all, the loan repayment rates should be as low as possible. So only expect as much as your current financial circumstances allow. Low interest rates and good conditions are essential for good financing. If the loan is flexible enough, you will have fewer difficulties in repaying it. The possibility of being able to suspend repayment for a month is just as much a part of this as free special repayments. All of this must offer sustainable financing for online small loans without Credit Bureau.

However, keep a few things in mind so that nothing stands in the way of your loan as a student, self-employed, pensioner, employee, trainee or unemployed:

1. Only take up as much money as is actually necessary

As a rule, the basic principle applies: the costs incurred should be measured as precisely as possible with regard to the topic of online small loans without Credit Bureau. Accordingly, making a list of all expenses is an absolute necessity in order not to experience any unpleasant surprises afterwards. It would certainly not be wrong to consider a small financial cushion, whereby the emphasis is on “small”, because if this buffer is too large, it would inevitably increase the liabilities. If possible, the required credit should not exceed the envisaged framework. The better way is to supplement the under-calculated need for funds with an increase or follow-up financing.

2. Establish a structured plan of your finances

The first thing about a project is that you correctly assess your financial situation and then calculate the amount of the loan. Ultimately, this does not also apply to the topic of online small loans without Credit Bureau, where an exact weekly list of all expenses helps, for example: How much money is spent every day on what? Small cost items, such as morning coffee at the bakery or beer in the pub after work, should also be taken into account in order to uncover hidden expenses. This has the advantage that, on the one hand, it can be assessed where there is still potential for savings and, on the other hand, the correct repayment rate can be estimated fairly precisely.

3. Be conscientious and careful

All information about your creditworthiness and your own financial situation must be correct, honest and accurate – especially when it comes to online small loans without Credit Bureau, with all information about your creditworthiness and your own financial situation carefully, accurately and absolutely honestly. You should allow yourself enough time to carefully compile all documents and evidence. This is the only way to draw a serious, accurate picture of your finances, which will undoubtedly have an advantageous effect on the chances for an emergency loan or an instant loan.

How reputable intermediaries work

The intermediary will primarily support you in getting a “loan without Credit Bureau” tailored to you from a German or foreign bank. In detail, the activity can also go far beyond mere mediation and can be supplemented by debt advice. A reputable broker will advise you in detail on the financing offer by pointing out all the advantages and disadvantages. He will also support you in compiling all the necessary application documents.

Advantages and disadvantages in mediation

Advantages:

  • Reasoning aid for large loans or problematic personal circumstances
  • Assistance in compiling the documents for the loan application
  • Detailed advice before submitting the application
  • Connections to lesser known financial institutions and banks
  • Good chances of favorable conditions
  • Procurement of loans even if the creditworthiness is insufficient

Disadvantage:

  • Doubtful offers are not always immediately recognizable
  • Risk of procuring loans that are too expensive
  • Possible fees for loan brokerage

The entry Credit With Credit Bureau Entry is also worth reading

With regard to the good contacts that numerous intermediaries have with small and less well-known banks, there are excellent chances of obtaining more effective conditions for online small loans without Credit Bureau. Negotiations can often be carried out even under complicated conditions. In the case of small banks, the applicant’s creditworthiness is mostly checked manually, so that the intermediary can credibly justify a negative entry in the Credit Bureau, for example. As a result, such an entry in the credit check is not as important as at a large bank, where such a process is largely computer-controlled. In contrast, applying for a loan to online small loan without Credit Bureau at a normal bank would be an almost hopeless undertaking.

How do you differentiate between reputable and dubious credit intermediaries?

How do you differentiate between reputable and dubious credit intermediaries?

A reputable broker will always act in your interest when it comes to online small loans without Credit Bureau. He also does not expect any fees or advance payments from you for his services, because he receives his commission from the bank.

The following applies to reputable intermediaries:

  • The company can be reached by phone without having to wait a long time
  • You get specific information on terms, loan amount, debit and effective interest
  • There are no costs for arranging a loan
  • The company has a website with imprint, contact options and address

This is how you recognize a dubious mediator

  • Insurance must be taken out in connection with the financing
  • Offers in the form of a financial restructuring
  • Unsolicited home visit
  • Payment of a fee regardless of the conclusion of the contract, but only for advice
  • Cash on delivery of the documents
  • You will be promised a 100% loan approval
  • The broker only takes action if you sign a brokerage contract
  • Calculation of expenses or additional costs

Why foreign credit institutions are a good alternative for online small loans without Credit Bureau

Why foreign credit institutions are a good alternative for online small loans without Credit Bureau

The financing of larger projects via foreign financial institutions is becoming increasingly popular. This is not just a new car or a planned vacation trip, but also {the strong capital for your own existence}. Sufficient foreign banks nowadays offer cheap loans via the Internet, which are individually tailored to the needs of consumers. What speaks for a credit institution abroad are the significantly simpler guidelines for granting a loan in contrast to Germany. An unfavorable credit rating or a negative Credit Bureau entry are therefore not very important when it comes to online small loans without Credit Bureau. It is generally Swiss banks that grant loans that are brokered online. This could be an interesting alternative for consumers who need an injection of money particularly quickly but have already been rejected by a German bank. That would be, for example, the unemployed, trainees, the self-employed. Students, probationary workers or retirees. It goes without saying that this group in particular has a hard time with regard to online small loans without Credit Bureau.

The benefits of a Swiss loan

It is often far from easy for a private individual who is in a tight financial situation to get a loan. Financing is made considerably more difficult due to poor creditworthiness or debts. In these cases, a Swiss loan can be a real alternative. This means a loan that is approved by a Swiss financial service provider. Since such institutes do not carry out Credit Bureau queries, this reason does not play a role in lending. This is especially ideal when it comes to online small loans without Credit Bureau.

Clearly, you also need certain collateral and proof of income for a loan from Swiss banks, whereby a credit check is also carried out before the loan is granted. However, if you have a fundamentally secure credit rating and an entry in the Credit Bureau is the only problem with financing, the Swiss loan is a realistic alternative for online small loans without Credit Bureau.

Online small loan Without Credit Bureau: How it works

A number of people who are looking for online small loans without Credit Bureau or “despite moderate creditworthiness” generally think of a “loan without Credit Bureau”. Nevertheless, the creditworthiness is checked in the same way by all renowned financial institutions. Because in addition to the Credit Bureau, there are other credit agencies that offer such a service.

Almost everyone has scoring at the largest credit agency in Germany, Credit Bureau. Because if you have applied for a credit card in the Federal Republic or set up a bank account, such a credit score will be created for you. Accordingly, you do not get a “loan without Credit Bureau” from {a financial institution}, at most a “loan despite Credit Bureau entry”. Fortunately, most of the entries made by consumers are positive at Credit Bureau. However, many people believe that they have a “negative Credit Bureau entry”

If you intend to submit a loan application, it is best to check in advance whether the approval of your application by the bank could be problematic, since your scoring (the so-called credit rating) may be so unfavorable. Once a year, Credit Bureau grants both private individuals and companies a free query of the “Credit Bureau Score”. Since 2010 there has been an option to obtain self-disclosure from the credit agency. It can then be used to determine what information is stored. In principle, you are entitled to this information once a year free of charge in accordance with Section 34 of the Federal Data Protection Act (BDSG). To do this, you can first call up your own score (Credit Bureauscore), but you will also receive information about whether someone has made a request about you in the past few months. You can request this data from “MeineCredit Bureau” at any time. Your scoring is linked to various “ratings”, which can range from 1 to 100. A good credit rating therefore requires a high score. 100 is the optimal score someone can get. In this case, an extremely low probability of failure is feared. If, on the other hand, someone has a score index of 50, for example, Credit Bureau assumes that payment defaults may occur.

Tip: This is how you can have a negative Credit Bureau entry deleted

An invoice is due and you overlook the fact that you have to pay it on time. There can be various reasons for this: You were on vacation at the time, had a new address due to a move or were currently in a financial bottleneck. Even a cell phone bill that was not paid on time can sometimes cause problems sooner or later. It happened quickly. You suddenly have a negative Credit Bureau entry and can only apply for a loan with Credit Bureau. A decrease in the score index due to several reminders means that it can have consequences for the application for a loan.

On the other hand, a consumer can have an unfavorable Credit Bureau entry eliminated again. The credit agency may still have information that is either incorrect or very old and, as a result, is no longer up to date. As a consumer, you should definitely exercise your right to self-disclosure in order to have entries that are no longer current eliminated. To do this, it is sufficient to request a deletion from the credit agency. The condition for the elimination is that the open invoice does not exceed USD 2,000 and has been paid within 6 weeks.

Your data at Credit Bureau – deletion of Credit Bureau data

Your data at Credit Bureau - deletion of Credit Bureau data

The Credit Bureau entries are automatically eliminated after a certain period of time even without your intervention. That happens e.g. B. at:

  • after 12 months for information about inquiries; This information is only passed on to Credit Bureau contract partners for ten days
  • for loans exactly to the day, 36 months after the year in which the loan has been fully repaid
  • for information about outstanding claims, each after a period of three full calendar years (ie with the end of December 31 of the third calendar year that follows the storage)
  • in the case of claims from mail order companies, in the event that these have been paid in the meantime

The advantages of a Swiss loan

It is often far from easy for a private individual who is in a financial emergency to obtain a loan. With debt or with poor creditworthiness, the chance of financing is significantly reduced. In such cases, the last option would be a so-called “Swiss loan”. It means a loan from a Swiss credit bank. Since such banks do not carry out Credit Bureau queries, there is no obstacle to finding credit. This is particularly ideal when it comes to online small loans without Credit Bureau.

Obtaining a loan without checking the creditworthiness as well as various collateral and proof of income is of course also not possible at Swiss institutions. If it is just a negative Credit Bureau entry that worries you about financing, the Swiss loan could be a realistic chance for you, provided your credit rating is so far in the green.

What is the “APR”

In the case of online small loans without Credit Bureau, the amount of the loan costs is also important. The “effective annual interest rate” or “effective annual interest rate” plays an important role here. What is the “annual percentage rate”? This means the interest costs for loans per year, which are calculated using the nominal loan amount. It is declared with a certain percentage of the payout. On the other hand, an initial “annual percentage rate” is the term for an interest rate that can change during the term of the loan (variable interest rate)

A fixed borrowing rate is set for the entire term when a loan is taken out. In plain language, this means that the nominal interest underlying the “loan” remains unaffected, regardless of the current trend on the capital markets. The advantage for you: As a loan customer, a fixed borrowing rate provides you with the security for strategic planning. You already know that the interest rate on the “loan amount” remains unchanged throughout the term of the loan.

What does the loan term mean

A loan can have very different repayment terms, most of which are determined by the loan term that the borrower chooses. In other words, a loan with a short term has to repay higher monthly installments than is the case with a long “loan term”. As far as the loan term is concerned, it can definitely be worthwhile to think through the different options. However, it is not possible to keep track of all maturities for all loans.

The period of time between payment and full payment of the loan amount is called either the loan term or the loan term. In principle, the duration depends on the one hand on the repayment and on the other hand on the amount of the nominal interest. The maturity is of course primarily influenced by the repayment rate. The smaller the amount of the repayment, the longer it takes to repay the loan amount and thus the loan, including processing fees and interest. Loans that are connected over 120 months are considered long-term loans.

What are the loan fees

Sometimes the loan fees are also called loan processing fees, processing fees, closing fees or processing commission. Credit institutions were officially allowed to charge the applicant the expenses incurred until 2014 for a loan request or processing the loan application. The calculation of the “loan fee” for a loan request, including the assessment of the borrower’s creditworthiness, has been declared illegal since May 2014. Processing fees, which were calculated depending on the respective loan amount and which amounted to an average of 1 – 3 percent of the loan amount up to 2014, may therefore no longer be charged at this time. Often the fees already paid for the loan application or the loan request can be requested back.

What is a lender

What is a lender

Lenders, as natural or legal persons, lend money to the borrower or borrower for a certain period of time at an agreed interest rate. As far as the term “lender” is concerned, this is generally used in legislation, although the terms “lender” or “creditor” may also be used in credit contracts.

When the lender grants a loan, he therefore charges a higher interest rate due to the high risk of default. A credit bank, insurance company or savings bank usually acts as the lender. The Civil Code (BGB) is decisive for the rights and obligations of the borrower.

What is the monthly rate

Borrowers who have taken out “bad credit” loans must also pay them as individual monthly installments. One of the elements of the monthly loan installment is the interest rate. The current customary market index always applies to interest on the global capital market. The bank then follows this when calculating the interest rate. Usually, they then pass this interest on to their customers with a corresponding surcharge.

Another component in the “monthly installment” of loans is repayment. The borrower normally determines the amount of the monthly repayment rate depending on his total income. The repayment is generally annually 1 {{percent}} for {long-term financing contracts}. With a higher repayment, the loan amount and thus the loan amount can of course be repaid in a shorter time. However, the monthly installments – depending on the amount of the repayment – are then significantly increased.

Interest and repayment are therefore the common features that determine the monthly rate for loans. The processing fee of the banks and brokerage commissions of the credit intermediaries are often included in the monthly installment of financing, mostly integrated in the monthly installment. Although these costs are normally already taken into account in the interest, they are nevertheless a component of the monthly installment for the total loan amount.

What is a debt rescheduling loan

A debt rescheduling loan is a loan that a person takes out in order to be able to pay an existing loan with high interest rates somewhat more cheaply. With such a debt restructuring, the borrower can save cash. Furthermore, different loans can also be combined into one. It is therefore very possible to disclose more than one loan in the course of a debt restructuring. Without question, you don’t go back to the {credit institution} where you took out the expensive loan for a “debt rescheduling loan”, but to another. Nevertheless, the same bank can be selected for the debt rescheduling loan.

The smaller financial burden after taking out the new loan is certainly the basic purpose for a debt rescheduling loan. Even with relatively slightly lower interest rates, you can save money with the cheaper loan.

What is the total loan amount

What is the total loan amount

The total loan amount includes all costs that the bank customer has to repay for a loan to the financing bank. The total amount that the borrower has to repay to the credit institution within the term of the repayment includes the ancillary costs and is consequently higher than the loan amount owed. In addition to the pure loan amount, there may also be processing costs or commissions as well as the interest rate to be paid. The “total loan amount” therefore includes all expenses incurred, which sometimes makes it significantly more expensive than the actual nominal amount of the loan.

The {expenses} for a residual debt insurance in the course of borrowing also belong to the total loan amount.

What is the loan amount

In the event that the borrower is granted the loan application, the loan amount will then be paid out net. If the “loan amount” may not be paid out in full as a total amount, it is relatively often because the payment is sometimes different in terms of the type of loan. This also applies to a loan or a “Swiss loan”.

It does not matter whether the borrower is a private person or a business, the bank will definitely determine the total available income or the business documents before the application for the loan amount is approved. It doesn’t matter how much the loan amount is. The monthly income of the borrower is checked in the same way for a loan amount of USD 500.00 as for a loan amount of USD 10,000.00.

The monthly installment for repayment within a specified period is generally fixed for the loan amount. These agreements can always be found in the written loan agreement. In the event that the borrower has the corresponding monthly income, he can repay the loan amount before the contract expires with special repayments. Such special repayments often cost fees. A quick look at {the respective financing contract} provides information as to whether you have to pay extra for it. The contractual relationship usually expires automatically as soon as the last installment for the loan amount has been paid. When applying for a loan again, the borrower must submit a new application to the bank.

 

Credit for tax back payment.

Many customers already know what the post from the tax office is all about. An additional tax payment is due. Basically, it is very relaxing to earn a lot of gel. However, here is the dark side of high earnings. If you earn a lot, you also have to pay a lot of taxes. Then a really high tax back payment may be due, which cannot be paid from the current budget. The thought of a loan for tax back payment then becomes loud.

It is the self-employed and freelancers who share this fate. To make matters worse, this professional group only receives a loan for additional tax payment under special conditions.

Deferral or payment in installments at the tax office

Deferral or payment in installments at the tax office

The conditions for a loan for back tax payments are the same as for all other loans. The credit rating has to be right. This means that the income must be high enough and the Credit Bureau must be unencumbered. Usually it is the self-employed and freelancers and fewer workers or civil servants who have to pay tax. Therefore, a loan for back tax payment is mostly requested by self-employed persons. Whoever belongs to the group of people must first find a bank that provides a loan for the self-employed.

If you have tax debts at the tax office, you should know that the tax office does not normally approve deferral of the claim. In addition, the office insists on the immediate payment of the tax debt. For this reason, many borrowers only take out a loan for an additional tax payment because they have no other option. In addition, they have no use of the loan because it has to be paid directly to the tax office.

However, an immediate repayment can be stopped if the taxpayer can prove that he has applied for a loan but has not received one. The tax office will then approve the repayment with a deferral or installment payment. The repayment is generally limited to one year. As proof that he has not received a loan, he can send the receipt to the tax office in order to substantiate his efforts. The tax office will examine the document comprehensively and offer installment payments if necessary.

Taxpayers should know that not everyone is offered payment in installments. An application must always be made. It is also important to know that the claim cannot simply be forgotten and the tax debt simply ignored. The tax office will then immediately seize or initiate a seizure. For each month the tax debt is not paid, the tax office will add a late payment surcharge.

Important – the loan comparison

Important - the loan comparison

If you are self-employed and ask for a personal loan, you have to face difficulties. This professional group cannot provide stable income and this is one of the three licensing criteria for banks. These characteristics include a sufficiently high income, impeccable Credit Bureau and a permanent job. Often, however, the self-employed cannot prove a regular income. Although he may earn well in one month, in the other there is slack. In the case of a loan for a tax back payment, this clientele must submit a business evaluation or annual financial statements. Most of them are determined by tax auditors and count as proof of income.

With these documents, the bank determines exactly what the customer’s economic situation looks like. Financing is not possible. If the bank can see a demonstrably high income from the documents, it will approve the loan for an additional tax payment.

Before applying for a loan, a loan comparison should still be made. So he sees how high the annual percentage rate is, also the terms and conditions of the bank can be viewed. He also receives a loan that fits his income. Regardless of whether you are self-employed or an employee, a loan should have the same requirements as any other loan. If one assumes that additional tax payments are more likely to be found among freelancers and the self-employed, then a lender must be found who also lends to this clientele,

A credit comparison also shows the conditions that are particularly important for a self-employed person. So the borrower sees exactly who grants a loan to the self-employed and who is more likely to refuse. The loan comparison is free of charge and provides same-day results.

Is the overdraft facility an option?

Is the overdraft facility an option?

If the tax assessment is available, the customer sees the loan amount that he needs for his loan. If the amount is not in the thousands, but is in the hundreds, the overdraft facility for the additional tax payment could possibly be used. The current account of the business account could also be used as an alternative. To use this, the self-employed must have an overdraft facility, which is not always the case.

If the customer opts for an installment loan, it must be paid in equal monthly installments. Proof of the customer’s creditworthiness is strongly recommended. In most cases, a business degree or income tax assessment is sufficient. What the bank needs in full will be communicated to the customer.

Those who have a overdraft facility or a current account should only use these forms of credit if they can be repaid as soon as possible. It is expensive to use and would actually not be necessary if the financial situation is serious. If a self-employed person earns well for several months in a row, he could put himself aside. This would make a loan for back tax payment no longer necessary.

The loan for tax back payment in case of bad Credit Bureau

The loan for tax back payment in case of bad Schufa

Often the bad credit rating does not result from the low income, but from several negative entries in the Credit Bureau. Self-employed people are greatly disadvantaged when it comes to lending anyway, with a burdened Credit Bureau the matter looks even worse. However, the customer does not have to despair immediately. Under certain circumstances, a clarifying conversation with the bank could explain the bad Credit Bureau. The financial situation could also be discussed.

If the self-employed can then prove his earnings on the basis of receipts and statements, a loan for additional tax payments could be approved. This is also the case if the negative entry is of a lighter nature. As a way out of this rather difficult situation, a second borrower or a guarantor could defuse the situation.