Month: April 2019

Payday Loan Tips

by Sharon Manning

Anyone who has not borrowed so often in his life does not necessarily know what is important and what to pay attention to. Loans bring with them dangers that should not be underestimated. At this point, we will give you some personal credit tips that can be worth cash if they get attention. It's easy to get a loan today, but it's not so easy to save money. Find out how to do it.

First tip

First tip

Avoid using the discretionary credit. Disbursed loans are the most expensive loans that banks have on offer. Even today in the low-interest phase, the average customer pays more than ten percent interest when using the Dispos. The Dispo makes financial flexibility and is always suitable when short-term liquidity bottlenecks exist. Within three months, however, the MRP should be able to be compensated again.

Anyone who is already sitting in the dispenser, because the account is regularly guided in the target, comes out of it only when the Dispo is replaced with a favorable installment loan. This saves costs and the fixed monthly rate guarantees that the installment loan is paid at the end of the term.

Note: The posting is only for short-term account overdrafts, which can be compensated within a maximum of three months.

Second tip

Second tip

When it comes to borrowing, it is not only important to pay attention to the possible borrowing costs. Almost equally important is to make sure that the monthly burden is financially sustainable. The amount of the installment should be well calculated. Never plan all the disposable income for the installment. The rate should be affordable even when financially a little tighter. If the disposable income is not sufficient, the disposition is constantly used, then a loan for further purchases is not the right solution.

Third tip

Third tip

If there is clarity about the amount of credit that should be applied for, then a free credit comparison should be made to calculate the amount with different terms. Financial experts always advise to choose the term for loans as short as possible. But that's just a piece of advice that does not always fit. With low incomes, the financial scope is limited, so it is perfectly legitimate to choose a longer term to keep the rate affordable. At the same time, no consideration should be given to the associated higher borrowing costs.

Fourth tip

Fourth tip

The topic of residual debt insurance is also much and often discussed. Consumer advocates and financial experts warn against the residual debt insurance. The residual debt insurance is a cost driver and often superfluous. Many consumers see it differently. The residual debt insurance gives you a little extra security. The additional costs associated with the conclusion of a residual debt insurance are gladly accepted. Those who feel safer with residual debt insurance, should complete it. The residual debt insurance is indispensable whenever the monthly burden of the installment is so high that it can not be borne if income is lost.

Fifth tip

Fifth tip

Always remember the debt trap. The statistics of the past years show a clear trend. More and more people in Germany are indebted to the bottom of their heads and have to end up in private bankruptcy. A major cause of this dilemma is the ability to borrow anytime, anywhere. Many consumers tend to spontaneous purchases on credit. Later they lose track. The process of indebtedness is fluid. Suddenly, the money is no longer enough, rates can not be paid.

Protect yourself by not taking out loans spontaneously. Plan the purchases and their financing. Avoid loans of no value, such as vacation credit or the dispo. Keep a household book and uncover financial reserves.

Small Loans from Private Individuals

by Sharon Manning

Small loans by private individuals are granted relatively frequently, because loans with only a very small loan amount can often be lent by a private lender alone, while loans with higher sums are almost always requested first from the bank.

Small loans from private individuals can count as credit even from a sum of 1 cent, even if this circumstance in the practice of course is rather rare, because often private individuals are given rather loans in the double-digit to middle four-digit range. The small double-digit loans are often found among friends or family members when a person lends a very small amount from another person for a short time to buy or for the evening, for example, because their own wallet was forgotten at home.

Although these loans are never perceived as actual loans in the general understanding, but meet all the necessary conditions, provided that the person who receives the money must actually pay this back to the other person.

Due to the spontaneous nature of these loans, no extra document will be made as a credit agreement for such a small sum, but the effort is simply not worth it, even from the point of view of the lender. In addition, one has within the circle of friends and family anyway a high degree of trust each other, so that one can assume that the money is also back to the lender.

Loans from strangers

Loans from strangers

Small loans from private individuals can also be awarded to people who are previously completely foreign and thus have no personal relationship to each other. These loans are often brokered on the network via separate portals, where on the one hand the lenders but on the other hand also the borrowers can register. Borrowers may post their request or project following their application and have it financed through one or more private lenders.

The amounts can range from small four-digit sums to mid-five-figure sums, with the likelihood that the desired sum is actually achieved, of course, with increasing amount of these also reduced. Small loans from private individuals are also associated with such portals with collateral that the borrower has to present to the portal and thus indirectly to the lenders.

As a rule, the identity of the applicant is checked, as well as the rating within private credit and various other rating services (CreditReform). The interest burden on borrowers is quite high, as private lenders want to hedge their investment in the best possible way, and it is clear to all those involved that these borrowers were rejected in advance by banks.