Month: November 2019

Around 80 percent of start-ups need financing. Your own money is often not enough to open your own practice and make the necessary purchases. Although the fee is sometimes very high, the costs are also very high and sometimes unaffordable. New devices for practice can quickly go into the 5-digit range. When applying for a loan, the bank always considers the employment relationship of the doctor.

Credit for Doctors – Self-employed Doctors

Self-employed doctors, like freelancers or the self-employed, find it difficult to get a loan. When making a loan request, high demands are made that have to be met. The most important prerequisites that have to be met are permanent employment and regular income. This ensures that the loan for doctors is paid off on time. Since an independent doctor does not have a regular income, it is possible to take out a practice loan. There are special providers here that can be selected to take out this loan for doctors. Collateral is always an advantage to speed up the approval process from the bank. The bank can therefore assume that the loan will be repaid in any case.

Credit for Doctors – Salaried Doctors

Employed doctors have a much easier time getting a loan for this professional group than self-employed doctors. These receive a fixed income, which does not change every month. This enables the bank and the borrower to plan better and draw up a budget. As with almost all loans, this professional group may not have Credit Bureau entries. If this criterion is met, an application can be made without hesitation. Since there are many banks that grant loans to doctors in employment, comparisons should be made. Banks never work at the same interest rate, so the offers can be very different.

A comparison not only filters out the best conditions, the borrower also receives valuable information about the conditions and special repayments. Employed doctors and those who work independently can also take advantage of a complete package. A loan for doctors is taken out and life insurance is taken out at the same time. With this insurance, not only the doctor can insure himself, but also his family, who does not have to pay installments when the borrower can no longer pay.

 

A low interest rate loan is now easier than ever to find. The interest rate level of many banks is currently lower than ever, so interested borrowers can benefit from very cheap loan products with little effort. Loans that can score points with low interest rates are now mainly offered by the numerous online banks on the Internet. The online banks on the Internet often do not have their own branch network and low personnel costs, so they are more willing to pass on loans to consumers at favorable terms.

Find low interest rate loan and save a lot of money

When looking for a low-interest loan, consumers are inevitably confronted with debit and effective interest rates. The borrowing rate is the adjusted interest rate, which is used by many banks exclusively for advertising purposes. The borrowing rate is significantly lower than the effective borrowing rate, which can be attributed above all to the fact that the borrowing rate also takes into account other cost factors that arise when borrowing.

The effective interest rate takes particular account of the borrower’s creditworthiness. Borrowers with a positive credit rating pose a lower risk, so banks are willing to offer the loan on more favorable terms. The term, repayment and the loan amount are also no less important. Loan amount and term are risks that are difficult to calculate, the higher the loan amount and the longer the term, the higher the risk for the banks. If you want to secure the cheapest interest, you should use a small loan amount and a short term if possible.

With regard to the creditworthiness of the borrower, it should be mentioned that a regular income is a basic requirement. Many banks still obtain Credit Bureau information about this today, with which the banks want to obtain information about the payment behavior of the borrower. If you have a negative Credit Bureau, you will never be able to get the lowest interest rate on a loan with Credit Bureau, for these people a loan without Credit Bureau is recommended.

Find low interest rate loan by online comparison online

By comparing credit online, consumers can find the most affordable loan offer. If you are looking for a loan with a low interest rate, you can now compare it to a loan calculator on one of the numerous financial portals. The comparison is free of charge, quick and easy and anonymous. In addition, a comparison with a loan calculator allows individual information: duration, repayment, usage, etc. to be taken into account. Precise comparison results make it possible to permanently reduce the interest rate and save a lot of money.

 

Child benefit is a basic provision for all children who live in Germany. It is paid from the month of birth. Since the last child benefit increase in 2010

• 184 USD for the first and second child
• 190 USD for the third child
• And paid 215 USD from the 4th child.

A child benefit increase is not in sight until 2016 at the earliest. Child benefit plays an important role in borrowing because it increases the chances of success with a child benefit loan.

Child benefit is paid regardless of income

Income plays no role in the amount of child benefit. Many parents continue to work after birth, so child benefit means an increase in income. This also has an impact on the financial transactions, because a loan with child benefit also has a chance of success. It becomes more difficult if the parent or one of the parents does not go to work and the spouse’s income is not high enough. Child benefit can lead to the fact that, in case of doubt, a loan is approved if the decision was previously shaky.

A loan is dependent on income

In the credit decision, the income is very important. It must at least exceed the garnishment exemption limit, which is around 1020 USD. The further over the income, the more likely a loan approval will be. The child benefit increases the monthly income significantly. As a result, a loan decision is made in favor of the couple and a loan with child benefit is approved. The only requirement is still the Credit Bureau: If there are no negative characteristics, nothing should stand in the way of a positive credit decision.

Child benefit and unemployment

Those who receive ALG I and Hartz IV cannot hope for a loan approval. Neither a bank in Germany, nor a financial institution in Switzerland or Liechtenstein give a loan to the unemployed. The economic situation is too uncertain. Child benefit doesn’t make sense either, because a child benefit loan is not an option for unemployed people.

Child benefit loan for self-employed and freelancers

Self-employed people and freelancers find it difficult to get a loan anyway. Due to their uncertain financial situation, many banks cancel in advance. But child benefit can also increase the chances here, because it is added to the income. In this case it is more likely to find a bank that is willing to help financially. Private money markets are another option. Here private individuals also lend their money to self-employed and freelancers with child benefit.

Debt restructuring guide

Debt restructuring is intended to replace an existing loan or to combine several loans with a new installment loan.

Reasons for debt restructuring

The reason for a debt restructuring measure is that the borrower wants to use the new loan at a lower interest rate than the one that he has to pay for the existing loan. The reason for this wish is usually that the general interest rate level has dropped so much that the debtor pays significantly less interest than before with the debt rescheduling.

Benefits of debt restructuring

Another reason for rescheduling may be that the borrower has to service several loans and would like to combine these loans into a new loan. In this way, he can reduce his overall burden and then only serves the one new loan. By paying a single loan installment, he also reduces his administrative workload, since he only has to serve one bank.

If several loan commitments have accumulated over the years, there is a risk that the borrower will be overwhelmed financially. If he is no longer able to service a single loan, he can risk the collapse of his entire credit exposure by terminating this one loan and the resulting negative Credit Bureau entry.

Impact of debt restructuring – disadvantages

The debt can be rescheduled through the previous bank. The borrower can also apply for a new loan from any other bank. However, he has to reconsider to what extent the debt restructuring actually brings financial benefits. If he repays an existing loan, he must expect to pay the bank a prepayment penalty for the previous loan. In addition, mortgage loans incur costs for the transfer of land charges to the new bank.

Loan notice periods

Inexpensive debt restructuring requires some time planning. It is readily possible when the fixed time of an agreed interest rate expires. Then the borrower can either make a special payment and reduce his debit or redeem the entire remaining loan by means of debt restructuring without incurring any costs on the part of the bank.

Notice periods for loans with variable interest rates

Loans with a variable interest rate are an exception. Here, the notice of termination can be given with a notice period of three months, so that debt can be rescheduled at short notice without any disadvantages.

Notice periods for simple installment loans

Simple installment loans can be terminated for the first time 6 months after payment with a notice period of 3 months. There will then be no prepayment penalty. However, the bank does not have to reimburse any processing fees and may request reasonable compensation for processing the termination.

A new regulation applies to installment loans that are concluded after June 10, 2010. The borrower may repay this early at any time, but the bank may request prepayment penalty. It is limited to a maximum of one percent of the early repayment. If the remaining term is less than a year, it may only be half a percent.

Which loans can be rescheduled

The debt restructuring can relate to any type of loan. It only depends on the period for which the interest rate is fixed.

Overdraft facility on the checking account

If the current account is in the red with a usually extremely expensive overdraft or overdraft, the account holder can reschedule at any time. There are no notice periods. Debt restructuring almost always makes sense here, especially because an installment loan is always cheaper than overdraft facility.

consumer credit

In the case of installment loans, which serve consumer purposes and mostly exist without collateral, and in the case of mortgage loans, the fixed interest period must be taken as a basis. The bank’s compensation claim associated with the termination determines the economics of rescheduling.

Debt rescheduling

As a lender, the bank will not readily grant a debt rescheduling within an interest rate-fixing phase of a real estate loan. Here, the borrower must agree a termination agreement with the bank, which sets out the conditions for early termination of the current credit agreement. The situation can be illustrated using an example:

Example:

A borrower serves a loan of .$ 100,000 with a fixed interest rate of ten years. He effectively pays 6% interest, i.e. .$ 6,000 annually plus repayment. After six years, interest rates drop and another bank offers him the loan for 4% interest. He would save .$ 2,000 annually and, with a remaining term of his existing credit contract of four years, almost .$ 8,000 in interest and would like to reschedule.

In the event of early termination, the bank will refer to its interest loss. This arises from the fact that the bank could only resell the capital received from the borrower as a result of debt restructuring at an interest rate of 4% and, taking into account the remaining term of the loan contract of four years, would lose this .$ 8,000. It relies on the fact that the agreed credit contract must be complied with as a contractual agreement and cannot be terminated without further notice.

The same case arises if the borrower wishes to make a special repayment that is not provided for in the contract in the fixed rate phase. Here, too, the bank would have to forego its interest income.

Early termination right when selling the property

The case law has regulated the problem in such a way that the borrower can terminate a mortgage loan prematurely if he wants to sell the property. The reasons for this are irrelevant (illness, divorce, unemployment, favorable opportunity to sell). The bank has to agree.

The courts justify this view by saying that otherwise the borrower’s economic freedom of action would be restricted too much. To the extent that the borrower is only interested in obtaining a lower interest rate from the same or another bank, the bank does not have to agree to the early termination of the contract.

Calculation of a prepayment penalty

If the borrower can agree with the bank about an early termination of the contract, the bank will demand a prepayment penalty. It is regularly the subject of controversial disputes and keeps the courts busy.

According to case law, a bank can use two methods of calculation:

It can calculate its interest loss based on the refinancing costs, i.e. how much money it will lose when it invests the freed-up funds in fixed-income securities.

Alternatively, she can calculate her interest rate deterioration damage, which she will incur if she lends the capital from the loan contract of her terminating customer to a new borrower on poorer terms at lower interest rates.

Weighing up between prepayment penalty and continuation of the existing loan agreement

In general, the prepayment penalty has a higher impact, the more interest rates have fallen since the loan agreement was concluded and the longer the fixed interest rate on the loan has been running. The borrower who wants to reschedule must therefore offset the prepayment penalty against future interest savings and determine whether he actually drives cheaper.

Finally, he has to add the amount of the prepayment penalty to the remaining debt. His loan amount increases. Generally speaking, debt rescheduling is only worthwhile if the interest rate differential is at least 0.25%.

It may be cheaper to continue the existing loan agreement until the end of the fixed interest period. Even those who want to make a special repayment must consider whether it is cheaper to pay this amount into an interest-bearing investment and only to bring the capital into the existing loan agreement after the end of the fixed interest period.

Cost aspects when entering into a new loan agreement

The borrower must also note that he often has residual debt insurance for the existing loan. If this is also canceled prematurely, it must be clarified that at least the unused portion of the premium payment will be reimbursed.

Furthermore, he has to reckon with the costs of a new residual debt insurance for the new loan agreement. The premium increases with age. Notary fees and land registry fees apply to transferring a land charge to a new lender.

Debt restructuring requires continued positive creditworthiness

If the borrower wishes to terminate an existing loan agreement, he must take into account that the bank will re-examine its economic situation in order to determine the creditworthiness. If these have worsened or there is even a disadvantageous entry in the Credit Bureau, he risks waking sleeping dogs and jeopardizing his credit exposure.