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Business loans: what traps await entrepreneurs

Very often, especially novice entrepreneurs, they face the problem: what to finance the development of the company from. An editorial over at http://www.fivecountyfair.org/motorcycle-loan-bad-credit-guaranteed/

Entrepreneurs choose two paths. Either they focus on slow development financed from the surpluses generated by the company, or they are looking for investment credits and loans that can accelerate the development process.  

Looking for investment credits and loans

Looking for investment credits and loans

The second path is chosen by most companies because entrepreneurs know that they need to respond quickly to changes in the market and few of them can afford to wait for what the competition will do. Reckless loans, however, can be a cause of trouble and a reason for falling into credit traps.

Depending on the purpose for which the loan is intended – purchase of equipment and technologies, construction of facilities, purchase of another company – the loan is granted for up to 10 years. It’s been a long time, so it’s worth thinking carefully about which of the many banks offers to use so that you don’t become a hostage of the bank later.

Not everyone will receive an investment loan

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There are industries that banks do not want to support with loans. Beginner entrepreneurs do not have great opportunities for support from the bank. Those who meet the initial banking criteria must be patient and prepare for the administrative path through suffering.

That is why, when the bank’s final decision is positive, many entrepreneurs do not load into the provisions of the contracts, glad that at all there was a bank that decided to finance their business plans. It can have fatal consequences.

The point is that the loan should finance the company’s growth and not increase the income of the banks. So what should you pay attention to so that the decision to take an investment loan is not the worst in the history of your own company?

Margin and commissions

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The amount of the margin is important because it applies throughout the entire loan period. However, its borders can be tried to negotiate and it must be done. Similarly, you should negotiate and enter in the contract the possibility of commission-free early repayment of the loan or part of it.

Interest

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Another important variable when calculating loan profitability. The entrepreneur has little influence on the interest rate because it is determined on the basis of GFIC indicators. Offers at individual banks may differ by several percent, which is why it is worth looking for the best offer on the market.

Credit collateral

Credit collateral

The bank will demand collateral for the loan and everyone must be prepared for it. While finding guarantors is not too annoying, the bank may propose provisions in the contract that will be very unfavorable for the company. These include wording that prohibits the encumbrance of the company’s assets to other creditors or provisions forcing the bank’s consent to incur liabilities in other institutions.

This binds the hands of an entrepreneur who could have the opportunity to finance other projects in cooperation with other financial institutions.

The provisions which give the right to terminate a loan by a bank in a situation in which the entrepreneur does not pay his liabilities to institutions other than the bank are extremely unfavorable. This may be, for example, USD, to which the entrepreneur will not pay contributions for his employees.

You should also be careful about the wording in the contract, which only transfers to the entrepreneur the risk of market disturbances and is the burden of the costs of these disturbances.

It is also worth eliminating a blank promissory note from the bank’s security system – an extremely dangerous tool in situations of conflict with a bank.

What is worth taking care of?

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The entrepreneur should push for solutions in the contract that will allow him to suspend repayment of installments and interest on them for some time if market events unfold in an unfavorable direction.

For several years in which the loan will have to be repaid, the market situation may change so much that it will be difficult to pay back debts. Then the bank’s violent reaction may deepen the company’s problems or lead to its collapse.

You should also suggest a loan repayment date. It may be that there is one main contractor with whom the company cooperates and that pays its receivables within a specified time. It is worth setting the repayment for the bank in such a way as to take this into account and not to pay unnecessary penalty interest for even several days late payment of installments.

You should not be afraid of loans. However, before you use them, it is worth – especially if you run a small company without a finance department – take advantage of the advice and opinions of credit advisors.

A professional company will easily find in the maze of fine print rules that are unfavorable for the borrower and will look for the best offers on the market.  

Credit and loan fraud easier to detect

Despite information and preventive actions of the Police, extortions of loans and credits are still a serious problem. Data from the Association of Polish Banks indicate that in the fourth quarter of 2016, criminals tried to obtain at least 1920 loans.

Many attempts have been thwarted by the police and banks

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The activities of criminals have been hindered by the Restricted Documents system operated by the Polish Bank Association for a long time. Until recently, loan companies did not have a similar system, as they increasingly fall victim to criminals who make means using someone else’s personal data.

In Q1 2017, such delusions were hampered by the launch of the Safe PESEL system. Now every Pole can protect himself against taking a non-bank loan using his data.

After the PESEL reserves the offender will not take out a quick loan

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It is worth noting that loan companies did not activate the described collateral due to some statutory requirements. Lenders belonging to the Association of Loan Companies (ZFP) simply decided to respond to the growing threat from criminals. It is hard to hide that the mechanism of action of lenders paying funds via the Internet encourages to cheat money.

This practice also means trouble for lending companies, who later have problems with recovering funds. In response to criminals’ activities, the lenders have launched a special Safe PESEL register together with the international company CRIF, which is experienced in implementing similar projects.

The new register is based on the “credit freeze” mechanism

credit cash loan

This means that a consumer who reserves his personal data in the Safe PESEL system declares that he is not interested in loan companies’ offers. Such a declaration later prevents a person who stole personal data from taking a quick loan. Importantly, the blockade of the loan companies’ offer may be revoked by the same person who started it.

The Secure PESEL system also allows you to report the theft of personal data (including its reservation). Such a notification is a signal to the lender and indicates that there is an increased risk of obtaining a loan “on the person”. The effectiveness of the Safe PESEL system in practice should be high, as it is used by leading lenders. This group includes, among others, the following loan companies.

The results of the described system should also be positively influenced by its availability for all Internet users. It is worth emphasizing that the consumer can freely reserve data in the Safe PESEL system.

This procedure requires only filling out the form with personal data and sending two scans of your ID card. The originators of the described system emphasize that people who reserve their PESEL number do not have to be afraid of passing on their data to lenders (for purposes related to offering loans).

Despite better security, you still need to watch your data

The launch of the Safe PESEL system will definitely increase the degree of digital security of Poles. Thanks to ZFP’s activities, the loan industry offers a similar degree of protection against fraud as domestic banks. It is possible that more loan companies will soon join the new system.

Despite launching new solutions to increase protection against extortion of loans and credits, consumers cannot forget about the basic principles of securing personal data. A person who wants to be financially secure should:

  • avoids throwing documents to the trash that contain confidential data (e.g. name, address and PESEL number)
  • refuse to leave your ID as a lien (e.g. when renting sports equipment)
  • regularly update anti-virus software and do not install applications of unknown origin (note: this rule also applies to mobile devices – smartphones and tablets)

Especially cautious consumers may additionally use the special notification service which is sent at the time of applying for a loan.

New non-bank loans in June 2018.

From month to month, the number of loans taken into account by our comparison will increase. In May this year, Sean Cole already compares 85 non-bank loans. It can be expected that this number will soon approach a hundred.

In recent months, there have been a lot of new offers to borrow funds from non-bank companies. For people looking for payday loans and installments, we decided to check new offers. We found them some really interesting proposals.

Under the new offers, we will borrow 3,000 USD for free

monwy

We presented the new loans in the table below, which informs about the value of each loan, its repayment period and the most important features. People browsing this list may notice that they also include free loans.

Interesting offer of free loans for new customers, prepare, among others, Good Finance. The lender provides up to USD 3,000 for free. This amount of free loan is one of the highest on the market and is comparable among other Honest Bank’s offer also stands out with the possibility of easily extending the repayment period.

This is an important advantage, because many loan companies after introducing statutory limits on the cost of instant payments, completely abandoned the option of extending repayment.

Also worth noting is the proposition under the Good Finance brand. It stands out among another high limit of the free loan (up to USD 3,000). Importantly, the GFI Loan does not require income proof documents. A slightly lower limit of the free moment (up to USD 2,000) was provided by GFI.

Her customers can take advantage of the option to extend their repayment for a period exceeding the standard 7 days – 30 days. A longer repayment period without an extension (up to 35 days or 65 days) has another loan recommended by us – Honest Bank. Its advantage is the lack of customer verification in the BIK database.

There have also been new loan offers for a long time

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In reference to market news, which we have presented in the table above, it is worth mentioning that they do not apply to short-term loans only. Interesting loan offers for a longer period have also appeared on the market recently.

An example is the Honest Bank offer. The lender pays up to USD 6,000 and agrees to a repayment period of up to 30 months. Interestingly, the Honest Bank customer may take out a second loan before the first commitment is paid. Few lenders allow such a solution.

Interesting proposal to borrow funds

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An interesting proposal to borrow funds “for longer” seems to be Good Credit. As part of this loan, we will receive up to USD 15,000 for 30 months. Such a large amount can be granted within 30 minutes, and for reliable customers, there is a reduction in the cost of the loan (up to 15%).

A good Credit installment loan offer is also worth noting. The lender pays clients up to USD 11,500 and offers a repayment period of up to 52 weeks.

Interestingly, the first Good Credit loan is free with its repayment deadline within 4 weeks. As you can see, not only companies that offer a moment, provide new customers with an exemption from costs.

Free loans for seniors – up to 78 years old!

Demographic trends in Poland are clear-cut. We are talking about a rapid increase in the number of seniors awaiting us in the coming years. The aging of Polish society is a constant trend that will be practically irreversible.

Therefore, many companies (including loans) must gradually adapt their offer to the expectations and needs of seniors. Such older people use the Internet more and more often and are interested in financing small expenses outside the bank.

With older Good Finance readers in mind, we checked which companies have the best loan offer for them.

Lenders sometimes do not specify the maximum age of the client

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In Good Finance and our loan comparator rankings, we present many offers of quick non-bank loans that are available to older people. Among such a large number of proposals, we decided to choose the four most interesting options (presented in the table below).

Two loans selected by us are characterized by the lack of limitations on the maximum age of the client. This solution is used by Fast Cash and Wong. In the case of Honest Bank, the maximum age of the client is 78 years. The same limit for Across Lender loans is 75 years.

It is worth mentioning that many companies offering fast loans via the Internet set much lower age limits for the oldest applicants. People who are more than 65 years old or 70 years old cannot take advantage of the offers of some loan companies.

Fast internet loans as a good proposition for seniors 

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Detailed information on the above loans:

  1. Fast Cash – loan amount for regular customers from USD 100 to USD 6,000. Repayment period from 1 day to 30 days and from 60 days to 65 days (up to 30 days for new customers). The lender does not require income proof documents. A loan for people at least 18 years old. A loan can be paid out in 15 minutes.
    2. Honest Bank – the loan limit for regular customers is USD 7,500. Repayment period from 1 day to 30 days. The lender does not require income proof documents. As part of the recommendation program, Honest Bank pays USD 30 for acquiring a new borrower. A loan for persons aged 20 – 78 years.
    3. Good Credit – as part of the promotion, the cost of the first one-off loan (even for 60 days) is reduced to USD 10. The amount of the first one-off loan from USD 50 to USD 1,500. An installment loan for new customers (up to USD 10,000) can be repaid in monthly installments (up to 24). The one-time loan limit for regular customers is USD 2,500. The lender does not require income proof documents. A loan for persons from 18 years of age. Regular customers can count on reducing the cost of the loan (up to 45%).
    4. Across Lender – as part of the promotion, the first loan is free. The amount of the first loan from USD 100 to USD 1,500. The maximum amount of the second, third and fourth loans is USD 2,000, USD 2,500 and USD 3,000, respectively. Under the next loans, the client may receive up to USD 4,000. Repayment period from 1 day to 30 days. The lender does not require income proof documents. A loan for persons aged 20 – 75 years. A loan can be paid out in 15 minutes.

Senior can borrow up to 6,000 USD for free and without any formalities …

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All loans presented, except for favorable conditions regarding the customer’s age, are also distinguished by the lack of the obligation to provide income certificates. That is why seniors will not have to, for example, scan documents from the Social Insurance Institution confirming receiving a pension or sending bank account statements.

It should be emphasized that all the analyzed companies offer preferential conditions for the first “moment”. In the case of Good Credit, a loan for new customers (worth 50 USD – 1500 USD) costs only 10 USD (see the table above). Good Finance customers can also benefit from an installment loan of up to USD 10,000.

Three other companies have opted for completely free loans for new clients (including seniors). Minoan customers borrow up to USD 1,500 for free. Honest Bank, on the other hand, will set a twice as high limit for free “instant” (3000 USD). Fast Cash is the unquestioned market leader.

New clients of this company can borrow up to USD 6,000 for free. Of course, much smaller amounts (up to USD 100) are also available. Seniors, like other lender clients, should adjust the amount applied for their financial capabilities.

Death of foreign currency loans

Its purpose was to reduce currency risk for people who earn in cash, took out loans for housing in foreign currencies, mainly in USD. This risk increased significantly during the crisis initiated by the financial crash in the US in September 2008.

Poles at that time forgot the principle that loans in foreign currencies are taken when they are expensive, counting that gold will strengthen against them, as a result of which the debt expressed in the Polish currency will decrease.

The exchange rate then fell to the lowest 

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Instead, up to 200,000 Poles were also swept in this year for loans in the Swiss franc, whose exchange rate then fell to the lowest level in the history of around USD 2 (we provide GFI average rates), and on July 31, 2008, it was even only USD 1.96.

When the crisis broke out, real estate recovered and the zloty began to lose value. On August 9, 2011, the franc cost USD 3.92, so the debt of borrowers doubled in 2008, e.g. from borrowed USD 300,000. USD 600,000 were made. to be returned (minus the amount already repaid).

Currently, the franc exchange rate is about USD 3.40, which means that for each loan borrowed in mid-2008, USD 1.70 must be given away (plus interest and – proportionally – other loan costs). “Franek” borrowers from that period (and those later, borrowers in francs until July 10, 2011) still have more to pay than they borrowed ( some of them much more), and their debt usually exceeds the value of the property.

The situation was similar to the euro. For example, between July 25, 2008, and February 16, 2009, and so in less than half a year, its exchange rate increased by over 50%. (from 3.20 to 4.83 USD). Currently, the euro costs around 4.10-4.15 USD.

What has changed since July 1?

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The last six provisions of the ‘Good Finance on good practices in the management of mortgage-secured credit exposures’ (that is its full name), resulting in the fact that you can almost announce the death of foreign currency loans.

Banks now strictly adhere to the principle “we will give you a loan for an apartment only in the currency in which you earn a living”.

Also, check meticulously whether the borrower can handle the loan agreement if the GFI interest rates rise significantly or the zloty exchange rate changes against the loan currency .

However, every year, banks will have to analyze whether the value of mortgage collateral does not exceed the value of the property (so-called stress tests). The loan can be taken for at least 35 years.

However, most of the recommendations contained in Good Finance have been in force since January 1, as a result of which in the first quarter of this year.

The total value of currency loans decreased to less than 0.5%. the total value of all loans granted. In the last quarter of 2013, there were almost twice as many (0.93%). For example, in the third quarter of 2008 as much as 79.9% all mortgages were also in USD.

And if you earn in foreign currency?

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Housing loans in foreign currencies can still be taken by people living in Poland (or families), who receive the majority of remuneration in euros, British pounds or dollars.

In Poles who went abroad to legally earn some money for an apartment and borrow the rest in a national bank, Good Finance hit the ricochet: they would not get credit.

The barrier is also the fact that currently only few banks offer foreign currency loans. Earners in euros for a loan can go to Good Finance Bank. Whoever has a salary in dollars will get a loan in GBank, and Good Finance, in pounds – he can go to GBank. On the other hand, those who receive a salary in USD will not receive a loan at any Polish bank!

The recommendation will reduce the builders?

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While not denying the expediency of issuing Good Finance, it should be noted that it significantly limits Poles’ access to mortgage loans.

This, in turn, may result in a reduction in the number of flats erected, i.e. a decrease in orders for construction companies. Meanwhile, construction is believed to be the flywheel of the economy. A side effect of the recommendation may also be that many builders can land on the pavement …

Consumer loan: Understand everything here!

Virtually all cash loans are at the same time ‘consumer’ and ‘consumer’. These two terms sound similar but have a completely different meaning. The first of these is part of the naming used by national banks. The term ‘consumer credit’ is more formal. It is specified by a law that regulates the functioning of many financial products (including cash loans).

The consumer is under credit protection

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The rules for the functioning of consumer loans are set out in the Act of May 12, 2011. Pursuant to this legal act, all credit agreements, which:

  • have a value less than or equal to 255 550 dollars
  • are offered by an entrepreneur (i.e. a bank, a loan company or a Cooperative
  • they finance a purpose directly unrelated to the person’s business and professional activity

It should be noted that the aforementioned limit also applies to loans denominated in a foreign currency. The value is converted at the average exchange rate announced by the National Bank of Poland on the last day of the quarter preceding the date of the loan agreement.

The group of consumer loans includes:

The group of consumer loans includes:

  • cash, car, revolving, consolidation and installment loans granted by banks and credit unions
  • loans offered by non-bank institutions (so-called loans)

The consumer status of the contract provides special protection for a person who would like to take out a given loan or loan. The entrepreneur must provide it with an information form. After reading such a document, the client should obtain knowledge about:

  • creditor and intermediary details
  • type of loan
  • time of the loan
  • of the total value of borrowed capital
  • interest rate and conditions for its change
  • the level of the Real Annual Credit Rate (the so-called APRC)
  • the total amount to be paid
  • installment payment rules and deadlines
  • additional products (e.g. insurance policy)
  • interest rates on overdue liabilities
  • the consequences of lack of timely payment
  • required forms of security

Consumer credit protection also covers issues such as:

  • conclusion of the contract (it must contain the information listed in Article 22 of the Act of May 12, 2011)
  • principles of consumer credit advertising (as part of the so-called representative example of advertising such products, they must provide realistic estimates of the cost of credit)
  • prohibition of charging the costs of withdrawal from the contract (it does not apply to interest due for the period of capital use and non-returnable administrative and notary fees to be paid by the lender)
  • the obligation to provide the consumer with a statement of withdrawal from the contract, which is valid for the next 14 days (the entrepreneur may voluntarily extend the deadline)
  • a ban on charging fees for early repayment of consumer credit, which:
  • it has a variable interest rate

or

  • over the next 12 months requires repayment of capital less than three times the average monthly salary in the corporate sector from December last year (currently PLN 12,323.85).

Consumer credit provides free spending

Consumer credit provides free spending

As a supplement, it is also worth presenting a brief description of consumer credit. Such a product is used to finance the current needs of the household (e.g. the purchase of home appliances or a holiday trip).

Consumer credit takes both cash and non-cash forms. The first variant is more popular. Thanks to its application, how will the Consumer Ombudsman help you? The consumer can take the funds himself and use them to buy the selected good or service. In the case of a non-cash consumer loan, the bank transfers Capital wished for the account of the entity selling the product (e.g. new car).

Online cash loan – Consumer rights

For a long time now, the popularity of loans and loans granted online has been increasing. It can be assumed that this trend will continue also in the coming years.

This is favored by the continuous increase in the popularity of the Internet and an increasing number of slightly older Internet users. Banks can be satisfied with the “internalization” of their credit offer, which allows them to limit employment in branches.

The question arises as to whether loans and bank loans are taken online provide some additional benefits to their owners (other than convenience and the ability to quickly receive funds). Sean Coles comparison experts looked at this issue in legal and financial terms.

You can withdraw from the online loan agreement for 14 days …

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Regulations related to online loans and credits can be found in the Act of May 12, 2011, on consumer credit (Journal of Laws of 2011, No. 126, item 715). It is worth remembering that this act, apart from loans granted by banks and credit unions, also applies to the offer of loan companies.

The aforementioned Act contains provisions regarding credit agreements concluded at a distance (e.g. via the Internet or telephone).

Article 58 of the Consumer Credit Act indicates that the same rules apply to online and telephone contracts as to traditional and credit contracts (e.g. at a bank, credit unions or square loan agent).

The withdrawal period of 14 days is provided

This situation differentiates consumer loans and loans from insurance. It is worth knowing that the conclusion of an insurance contract online gives the customer a much wider possibility of canceling the policy (for the first 30 days).

In the case of consumer loans and online loans, a withdrawal period of 14 days is provided, which is much shorter than for policies purchased online.

However, it is worth paying attention to two principles that improve the situation of the online borrower. First, to comply with the fourteen-day withdrawal period (calculated from the date of the contract), it is sufficient to send an appropriate statement by post to the lender/creditor.

Secondly, the regulations indicate that the lack of appropriate elements of the loan or loan agreement results in the extension of the withdrawal period. This deadline is calculated only from the date of receipt of the amended contract by the consumer and is still 14 days.

It is worth remembering that within fourteen days of withdrawal from the contract, the consumer has the right to resign from credit or loan without giving a reason and incurring other costs than the interest due for the period of the actual use of the measure. in.

Banks, credit unions or loan companies may independently enter longer withdrawal periods from a loan/credit agreement (including online ones).

In practice, there have already been such promotions related to the extension of the deadline, e.g. to 21 days. They can be used because each action for the benefit of the consumer is not prohibited by GFIC and applicable regulations.

Sometimes online credit can be more attractive

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National banks treat the subject of loans and loans granted online in a differentiated manner. Some such institutions have not yet decided to completely transfer the credit procedure to the Internet.

In turn, other banks intensively promote the sale of credit products via the Internet (as an alternative to visiting a branch). In the case of institutions belonging to the latter group, sometimes you can expect preferential conditions for borrowing funds over the Internet.

The above table presents three proposals for cash loans and loans, which are characterized by special conditions for Internet users. We are talking about a Loan for Friday for any purpose offered by GFIC and the popular cash loan Good Finance.

Three proposals for cash loans and loans

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It seems that the first of these banks to offer the greatest financial preferences for Internet users. It is worth knowing that a Loan for a Friday with a value of up to USD 20,000 will have a zero preparation commission if it is incurred online.

Such an attractive promotion is provided for people who as of 31 August 2018 did not have loans or consolidation loans at Good Finance. Each holder of a Friday loan can count on a low-interest rate of 5.00%.

A special internet offer will also be prepared by Good Finance. The lion bank offers a preparatory commission reduced by one percentage point to those who are its regular customers or have submitted an online loan application.

GFIC also has an interesting offer for Internet users. Special conditions for an online loan are provided for new customers of this bank. This Good Finance loan in online mode provides up to 3 months of credit vacation and can be paid on the day of applying online.

14000 USD loan can be taken out with favorable conditions.

A loan over 140,000 USD is actually no longer a small loan. Nevertheless, the 14000 USD loan can be taken out with favorable conditions. There are banks that charge interest of between 4.29% and 10.99% depending on their creditworthiness with a term of 48 months. Many now think that these are lure offers, but far from it, over two thirds of all customers receive an actual interest rate of 4.29% on average.

The rate then shows up at 321.65 USD. The total loan amount is 15,439 USD. Although online banks have better conditions in most cases, they lag a bit behind at these interest rates. An interest rate for the 14,000 USD loan is shown at an interest rate of 6.5% for the same loan amount from an online provider. The rate is higher, which is USD 330.80 and the total loan amount is increased to USD 15,878.87.

The 14,000 USD loan – the prospects

The 14,000 USD loan - the prospects

With regard to interest rates, the customer should know that most banks calculate credit ratings. If a customer receives a loan with high interest rates, the bank considers the customer to have a poorer credit rating. Different ratings can be found in the credit check from bank to bank. Of course, the interest rate is favorable if the customer has a sufficiently high income. If you have a bad Credit Bureau and maybe a temporary employment contract, then the cards are not so good. Even those who are still in the trial period can assume the same situation.

The amount of interest on a 14,000 USD loan also depends on the loan term. You can usually find the low interest rate on loans with a short term. A long loan term increases the risk for the bank that a loan default could occur. Most loans today are standardized, ie they are subject to automatic lending, which shows no scope for the customer.

The requirements are strictly regulated, as already mentioned above, this includes a sufficiently high income, a clean school and a permanent position. In addition, the customer must be of legal age and reside in Germany. The amount of income must be above the garnishment exemption limit. A single person is included with 1,100 USD net. Every additional person who lives in the household moves the limit upwards. Four people must have at least 1,800 net.

The 14000 USD loan – the conditions

The 14000 USD loan - the conditions

The 14,000 USD loan need not have a specific purpose, it can be used for a wide variety of projects. For example, a small loan is suitable for balancing the overdraft facility. However, one should mention that the overdraft facility should only be used for a short time. It is one of the most expensive loans ever. An installment loan on the above conditions is much cheaper, the overdraft facility has a double-digit interest rate, often up to 15%.

A small loan can also be used to finance other projects such as new furniture, a car or a vacation trip. Since the loans are not earmarked, they can be used freely. With a car loan, for example, the customer should know that there are special car loans, which in turn have a low interest rate, because the bank has not only the income but also the car as security.

Anyone who has a negative Credit Bureau is excluded from conventional lending. For these customers, with sufficient creditworthiness, the Credit Bureau-free loans can bring the solution. However, no favorable interest is then calculated, and this interest rate is also in the double-digit range. Since this type of loan is mostly processed through a credit agency, the agency commission is also added.

The permanent position must of course also be available and has been for at least six months. The employment contract must not be limited and there must be no trial period.
Of course, a 14,000 USD loan can also be taken out for debt restructuring. In this way, the customer can summarize all of his liabilities in one loan and will only have one creditor in the future.

However, in the event of early redemption of loans, it should be noted that banks can calculate a prepayment penalty. In the past, they were so high that debt restructuring no longer paid off. But after a court ruling, banks are only allowed to charge up to 1% of the remaining loan amount as their default.

The credit comparison

The credit comparison

Before making a loan request, the customer should know whether he can afford a loan at all. If you look at the rates of around 330 USD, that’s not a cardboard handle that has to be applied monthly. Here it is possible to find out by drawing up an income / expenditure plan. If there is a plus, the 14000 USD loan could be applied for.

Of course, the customer has to prove a corresponding creditworthiness in the form of an acceptable income. The customer should know that banks want to be sure that the borrower can also repay the 14,000 USD loan. Those with a low income have bad credit cards. Here there would be the possibility to look for a bank that has a high acceptance rate. In addition, the lack of creditworthiness could also be compensated for with a second borrower.

If you consider that with a 14,000 USD loan with a term of 72 months there is a rate difference of 243.46 USD and 256.93 USD, which is an interest rate of 8% to 10%, it is definitely worth a loan Conduct comparison.

The customer can then choose a cheap provider and submit his loan application directly via the comparison. But it should be noted here that the interest shown is not available for every customer. Here too, the interest rate is based on income and general creditworthiness. If the customer has a good credit rating, he will also receive a favorable interest rate and vice versa.

The 14,000 USD loan can be taken out at the house bank or at an online bank. Experience has shown that online banks show better conditions. The customer should not only pay attention to the interest rate, but also look for free special repayments. One or two rate stops per year should also be included in the loan agreement.

Rate stops because a financial bottleneck can always appear during the credit period, which may then be compensated for with two rate stops.

Want to Borrow Money? Let’s Check These Best Recommendations

Borrowing money is practically easy and easy. Depending on the conditions imposed by the place you borrow. For example, your loan application will be approved if you have collateral, have a credit card, or have a really good credit history.

Here are some recommendations for where to borrow money that you can try. Each has advantages and disadvantages. Both in terms of the loan itself and the criteria that you must meet.

Borrow Money from Friends or Relatives

Borrow Money from Friends or Relatives

The easiest way to borrow money is to borrow from your closest friends or relatives. You do not have to provide guarantees or certain document requirements, such as when borrowing from a bank. Depending on the agreement between you and friends or relatives.

However, this method sometimes risks “disrupting” personal relationships. Especially if you are late in paying off loans. Or, sometimes cause certain gossip.

In addition, of course, the number of loans you can get is fairly limited. Because the number depends on the ability or desire of your friends or relatives.

Make a Loan to the Bank

Make a Loan to the Bank

Provided that you meet the criteria and conditions requested by the bank, your loan will be approved. Borrowing from banks also provides more benefits, namely greater loan amounts with relatively low-interest rates. Here are some types of loans to banks.

  • KTA (Unsecured Loans)

KTA is a loan product from a bank that you can apply for without needing to provide collateral. The interest rate for this loan is around 0.6 percent to 1.9 percent with a tenor of five years.

The requirements for getting a loan are Indonesian citizens, have a steady income and have a good credit history.

  • Multipurpose Credit

If you do have assets to pledge, there is no harm in trying multipurpose loans when you need to borrow money. Because multipurpose loans have a number of advantages compared to KTA.

Multipurpose loans apply a much lighter interest rate, which is around 9 percent per year. Then, the number of loans granted is far greater than the KTA. Plus, the tenor can be longer.

To get a loan from this bank loan product, of course, you need to attach the terms of the asset documents.

  • KUR (People’s Business Credit)

If your goal is to borrow money for business, then KUR can be the best alternative. This people’s business credit loan product is intended for those of you who already have a business. The interest is also much lighter, which is 7 percent per year.

Nonbank Loan Institutions

bank

Nonbank financial institutions are institutions that are not banks, but provide a variety of financial needs. For example, FIF ( Federal International Finance ).

To get a loan of money through these institutions, you must provide collateral. Usually in the form of BPKB motorbikes, land certificates, and others. The interest rates applied are around 0.25 percent to 0.5 percent per month.

Pawnshop

Pegadaian is a state-owned company that is engaged in financing and saving gold. For financing, as the name suggests, you need to mortgage certain assets.

What makes it different from bank loans or non-bank lending institutions is that assets that can be guaranteed in pawnshops are quite varied, for example, cellphones, jewelry, or other valuable objects. Then, the pawnshop will estimate the value of the item and determine the amount of the loan based on the value of the item.

For information, the interest applied depends on the term of your loan repayment. Typically, the interest rates applied start from 0.75 percent.

Cash Advance Credit Cards

Cash Advance Credit Cards

If you have a credit card and need a fairly large loan, a credit card can actually be an alternative. You don’t need to submit an application and wait for approval. Just enter the credit card into the ATM machine and select the Cash Advance menu.

As long as you pay on time in the next month, no interest will be charged on your loan. All you need to pay for a cash advance is usually only a cash withdrawal fee of around 4 percent of the total withdrawal of funds or a minimum of USD 100,000. It depends on your credit card issuing bank.

So, for example, you withdraw cash via a credit card of USD. 2 million, then you will be charged a fee of USD. 60 thousand. These fees will appear on your credit card bills.

Those are some of the places you can try when you need to borrow money. Please choose based on the loan amount you need, the term of repayment, and the suitable interest.

Do not forget, just submit a loan for the amount of money as needed and not burdensome yourself when you have to pay it off later. Make a budget plan to ensure your finances stay safe.