Know the rate of consumer loan

If there is one indicator that should not be abandoned by soliciting consumer loan, it is the interest rate.

Between the nominal interest rate and the Taeg (annual percentage rate of charge), one must know how to make the difference. This is in order to be able to acquire the most attractive offer in the face of the continuous decline in interest rates on the market since 2011.

What is the TAEG?

The law requires that any advertising medium, any prior offer of consumer loan and any contract relating to this type of financing must mention Taeg so that customers can notice it first and foremost. It is this rate that determines the cost of the loan. However, the nominal interest rate is used only as a basis for calculating interest on the loan. In fact, a lower Taeg refers to a cheaper consumer loan and vice versa. This rate includes various charges, including:

  • The basic interest rate of the loan,
  • All the fees, registration fees, notary fees, mortgage guarantee fees.

Even if each loan institution is free to set the Taeg, it must not exceed the usury rate defined by the Banque de France. Wear is calculated every 3 months. The latter thresholds are those applicable since 1 January 2016. It is a way to protect borrowers against abuses of some donors. Debtors can in this way respect their debt ratio to avoid over-indebtedness.

The thresholds of usury for a consumer loan:

  • Less than 3,000 euros: 19.99%,
  • Between 3,000 and 6,000 euros: 13,25%,
  • Greater than 6,000 euros: 7.61%.

To get the best rate

Even though the consumer loan rate has become lower since 2011, a drop of 28%, do not hesitate to simulate your loan online before applying for this type of financing. It is a question of comparing the Taeg on the different offers of this type of financing on the market.

Since each loan institution is free to set rates that do not exceed usury rates, please note that:

  • The assigned loan and the personal loan are always subject to rates that vary between 4.5 and 9%,
  • The revolving loan is displayed at a rate of 14 to 22%.

The period is still conducive to a mortgage loan repurchase

Enough to make the acquisition of credit attractive for all loan agreements signed between 2008 and 2015.

The repurchase of loan remains very interesting, under certain conditions

Since October, real estate loan buybacks have been flocking to lenders, with many borrowers wanting to take advantage of low interest rates before their turnaround. As a result, processing times have increased, and applicants must wait 3 to 5 months. And this, especially as banks prioritize borrowing for new acquisitions.

The more patient can lower the cost or the duration of their loan. To maximize the economy, a differential of at least 1% is required between the contract rate and the current market average. This difference covers the costs of the operation: the new guarantee, the handling fees and the possible commission of the real estate loan agency, as well as the prepayment indemnities (IRA) due to the old bank, and which correspond to 3% of the outstanding capital remaining at the maximum, or six months of interest.

Moreover, credit should ideally be in the first third of its existence, when the share of interest in repayments is greater than that of capital, which must still be greater than 70,000 euros.

Period still favorable to the repurchase of loan

Some borrowers multiply credit restructurings to benefit from the fall in rates observed in recent years, not to mention that their number is not limited. If those who took out their 2008 and 2015 loans are the big winners, the owners who signed in the spring of 2016 also have an interest in getting started.

In January 2016, a loan of 200,000 euros was trading at 2.50% over 20 years. A few weeks ago, thanks to a drop in the rate to 1.40%, equal monthly (1059 euros), the number of deadlines fell by 18 months. The overall gain is estimated at 13,160 euros net of penalties and warranty costs.

The experts of the credit repurchase council also recommend taking an interest in the credit insurance . A delegated contract optimizes the savings achieved with the repurchase of credit.

Is it possible to mortgage my house to pay debts?

Are you thinking about mortgaging your house to pay debts? Here all the tips!

Why mortgage a house to pay debts?

Mortgages are a form of real collateral that allow the granting of a loan to be supported, decreasing the risk of non-payment for the institution that grants it. In general, they are used when a mortgage loan is requested, through which a bank provides the financing of a property for its acquisition, taking as guarantee of payment the same property. However, they are also very useful at the time of requesting a loan higher than the borrower’s ability to borrow, the same one that uses their property to support the payment of the debt. One of the main advantages of this form of financing is the low interest with which they are granted against other financial products.

Mortgaging a house can represent a very convenient way to get a loan for a large amount of money, since financial institutions can grant loans of up to 80% of the value of the property. Thus, with a high amount, low interest and long term to pay, the beneficiary can solve his need for liquidity in a reasonable manner.

The term of the financing when mortgaging a house can be several years so you should ensure you have enough financial stability to be able to assume the debt and not risk your assets. If you do not have the security of having a secure and long-term source of income, we recommend you consider other financing options that are less risky. At the end of the day requesting a mortgage extension is a complicated matter.

Fulfilling in time with the payment of the installments you can avoid negative reports in your credit history that damage your image before the banking entities. In case of having difficulties to face the payments, you will have to communicate it immediately to the financial institution that granted you the credit, in order to find an exit to the problem; In that way, you will avoid losing your property.

Requirements to mortgage a house

There are several institutions that can grant a mortgage in Mexico, each with its own policies, requirements and conditions. However, they all have points in common at the time of qualifying the requests. For example, a transverse requirement is that the minimum age of the applicant must be 18 while the maximum age of 64. In addition, it is a main requirement to have a periodic income support for which it is necessary to submit minimum payroll receipts. the last six months. If this requirement is not met, the financial institution may request the latest bank movements, as well as any other documentation that supports your financial behavior.

In addition, banks review the credit history of the applicant in detail. The financiers take into account the historical payment behavior, both of the personal loans granted previously and of the credit cards they have and any other type of financing received, reflected in the Credit Bureau. The current level of indebtedness is also taken into account when deciding to grant a mortgage.

As a general rule, financial institutions analyze your monthly income and determine your ability to pay to know what will be the maximum amount to finance. Thus, the monthly loan fee should not be greater than 30% of your gross income. Other requirements such as seniority and the time you have living in your current home are also assessed incisively by the financial institution.

In the case of mortgage loans, the applicant must cover an initial capital, which may represent 20% or 30% of the value of the property. This requirement is requested from the beginning and usually require that it be paid into a special account opened for that purpose.

What to consider when asking for mortgage loans

In principle, whoever applies for a mortgage must ensure that they have a real ability to pay to assume the debt they are going to incur. To do this, you must deduct from your regular income all those necessary expenses that are monthly in nature; the remaining money will be your disposable income. Furthermore, it is necessary to ensure a stable and lasting income in order to minimize the risk.

The ability to save is also a good indicator to know if you have the possibility of taking on a debt of this magnitude. Those who know how to save and are aware of the importance of saving are those who can face a mortgage payment obligation. The analysis of the previous credit behavior is also a good indicator, so everyone should be aware of their own history before going to the banking institution.

The applicant for a mortgage loan should know that, in case of difficulties to assume the payment at any time of the period, you can request a rehipoteca, in which case the debt must have decreased, at least, 20% of the received credit .

Finally, it is necessary to analyze well what is the need to request a loan, taking into account the amount of liquidity desired and the convenience of mortgaging a land or housing for that purpose. Accordingly, it is advisable to know other sources of financing that allow you to obtain cash without having to risk a property or property. Many times, the need for liquidity is due to smaller amounts, such as credit for motorcycles or the reunification of debts, so you could opt for other more convenient means to obtain cash immediately.

There are many options that allow you to get out of debt without money; Whether financing is needed to pay some bills, start a business or carry out a debt reunification, there are other means by which immediate liquidity can be accessed, such as our company’s urgent loans or personal loans.