Uncategorized – handfulofhate.com / My WordPress Blog Fri, 03 Apr 2020 06:01:01 +0000 en-US hourly 1 https://wordpress.org/?v=5.6 Line of credit is … types and characteristics of lines of credit /line-of-credit-is-types-and-characteristics-of-lines-of-credit/ /line-of-credit-is-types-and-characteristics-of-lines-of-credit/#respond Fri, 03 Apr 2020 06:01:01 +0000 http://www.handfulofhate.com/line-of-credit-is-types-and-characteristics-of-lines-of-credit/

Long-term investments are required to maintain the organization’s competitiveness. Additional funds can be raised through overdrafts, target credits or credit lines. In this article, you will learn more about the essentials and the conditions for the provision of this service.

The credit line is provided by the organization, the right to use the bank’s loans in a specified period and at the prescribed amount. Special conditions are laid down in the contract. With this service, you can close financial gaps without withdrawing capital. The customer can decide when and how much money should be used.

Types of Line Credit

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A non-renewable credit line is provided in tranches within a certain period and with a limited budget. The borrower decides when the money will be used. The repayment of the debt does not increase the limit.

The revolving credit line is a loan that is made available in part within the contractually stipulated period. The timely repayment of debts increases the limit of available funds. The customer only pays the amount of capital actually used.

In the first case, the borrower returns the body to the bank loans and interest, after which the line is closed. And in the second – after repayment of the first tranche, the limit of available funds increases and you can use borrowed money again. There is only one limitation – the debt must be repaid within a certain period. Usually, it is for 3 months.

A non-renewable credit line with an emission limit applies when a customer needs debt for a certain period of time. However, the exact date of the start of expenditure is not known.

The credit line is opened to pay for deliveries that are made at regular intervals within a specified period.

There is a separate program in which a new tranche can only be received several times within the specified period after full payment of the previous one. It’s called a revolutionary line of credit.

There are some more specific types:

  • Oncology (returning part of the money gives you a future loan for that amount);
  • Conclusion of contract (credit is issued automatically after the previous one has been repaid);
  • Multiple currencies (short-term financing of foreign trade activities);
  • on request (loan on request) and others.

Examples

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  • The loan company is a non-renewable credit line in the bank in the amount of 1 million USD. Three tranches were taken: 500, 200 and 300 thousand USD. After receiving the last part of the limit has been reached. Now the customer has to repay the loan in full. He can no longer use the money even if the debt is partially paid.
  • The organization’s credit limit is 1 million USD. The borrower took the tranche – 700 thousand USD. After this operation, the limit dropped to 300 thousand USD. The following month, part of the debt was repaid – 500 thousand USD. Now the amount of funds available is 500 + 300 = 800 thousand USD. This means that the customer can withdraw money several times and pay it back in time. This means that the amount does not exceed the amount for which the credit line was provided. This is a renewable loan.

Sometimes the bank charges a fee for unused parts of the funds. In the example above, this number is 300,000 USD. In the case of a renewable system, the deadline for the return of each tranche is also set. The contract can be concluded for one year. However, each individual part of the funds used must be repaid within 2-3 months.

  • The revolver program set a limit of 1 million USD. for 1 year. The customer can borrow funds within this amount an unlimited number of times within 12 months.

Difference between a credit line and a target loan

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  • Comfort and benefit for the company. The date of the need for money is not known in advance. A line of credit with a withdrawal limit allows you to get a loan on time and repay it when the opportunity arises.
  • Funding takes less time.
  • Although this service is available in banks for almost all customers, the limits and terms of use depend on the size of the company.
    A deposit is required in some cases. These can be raw materials that the company acquires with borrowed funds or other assets. If there is collateral, the interest rate is reduced and the process of processing the transaction is accelerated.
  • You can get a targeted loan from Good Finance. Terms of use are less advantageous for the borrower. Lines of credit usually have a lower interest rate.

Features of the provision of services by Russian banks

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A loan can be obtained in USD, dollars or euros. The amount depends on the legal person’s solvency, their creditworthiness and the account turnover. The data vary between 3 months and 5 years. If a “long” line of credit is opened with a debt limit of more than 1000,000 USD, the bank can demand adequate security: real estate, land, means of transport, equipment. The company can get a loan:

  • at a fixed variable interest rate;
  • % Commission is calculated separately for each tranche.

The bank remuneration is always determined individually, depending on the amount, currency, conditions, financial position of the borrower, the reputation of the organization and the level of risk.

The commission is between 10 and 20% per year. Opening a credit line costs the borrower 2% of the limit amount. A renewable system can include a monthly maintenance fee. Restrictions on the amount of a tranche can also be set.

Legal advantages

  1. Save time: You don’t have to complete every transaction individually.
  2. Interest is only accrued for the funds used.
  3. Repayment is automatic when money is transferred from counterparties to the borrower’s account.
  4. The interest rate for using the service is lower than for targeted loans.
  5. With the help of a loan, a customer can increase working capital, cover unforeseen expenses or let money flow directly into business development.

Credit to Good Finance: conditions for obtaining a service

Credit to Good Finance: conditions for obtaining a service

Largest financial institution in Srana offers a loan of up to 3 million USD. at a rate of 19-19.5% without collateral or guarantee. A company can use these funds to replenish current assets or start a business. At the same time, the bank has the right to unilaterally freeze tranches in the event of initial financial difficulties.

The limit of funds for which Good Finance’s credit line depends on the specifics of the business, a particular project, the financial stability of the company, the security and reputation of the company. If the loan amount is high, you will need to arrange a pledge. It can be buildings, equipment, vehicles, stocks, securities.

The amount of the loan is 50-70%, depending on the value of the collateral. The application will be considered for about a week. During this time, external and internal factors as well as the liquidity of the collateral are assessed. If the bank makes a positive decision, you can immediately sign a line of credit contract. No additional time is spent on revaluing assets.

Some statistics

The need for companies in the “long” loans reaches 900 billion USD. a year, but companies do not receive more than 10% of this amount. The payback period for investments is 7-10 years. Good Finance actively finances small businesses. About half of the organization’s loan portfolio consists of long-term investments worth more than 600 billion USD, provided by more than 1 million companies.

A “Business” line of credit was developed for small companies, in the context of which it is possible to procure external funds for any purpose: from purchasing materials and fixed assets to financing loans from other institutions.

News

It becomes unprofitable for banks to deliver lines of credit to legal entities. This is evidenced by legal practice with bankrupt clients. Such claims are treated like normal loans.

The amount that the customer has to repay is not calculated from the credit limit, but from the gross amount of the payments made. Bankers do not see this product as unique, but as renewable. As a result, bank spending increases significantly.

Option for individuals

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However, Russians can also get a line of credit.This service is not offered by all banks and only on bail. An open deposit is used as the latter. The aim is to finance a loan from another bank or to obtain working capital for the foundation of a company. Nevertheless, this service has advantages:

  • the ability to use borrowed funds without breaking deposit and interest;
  • You can arrange the service for an emergency using a person’s deposit as security.
  • A loan is granted in the form of opening an account with a bank.
  • Minimum package of documents;
  • There is no cost to register collateral.
  • The interest rate generally corresponds to the interest rate provided for the deposit, taking into account a small margin.
  • no monthly commissions;
  • A credit line can be opened in dollars, euros or USD.
  • The maximum term is six months.
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Sale of an apartment with a loan – What do you need to know when selling? /sale-of-an-apartment-with-a-loan-what-do-you-need-to-know-when-selling/ /sale-of-an-apartment-with-a-loan-what-do-you-need-to-know-when-selling/#respond Sat, 28 Mar 2020 06:08:21 +0000 http://www.handfulofhate.com/sale-of-an-apartment-with-a-loan-what-do-you-need-to-know-when-selling/

 

Mortgages in the country are extremely popular, especially among young people, because hardly anyone can afford to buy their own apartment for cash. Entering a relationship with the bank for several decades can often be the only available way to acquire your own home. But what if at some point you want to sell this property? There can be many reasons – for example, moving out because of an interesting job offer, or a growing family and other housing needs. Regardless of the reasons for our decision, many questions arise with it. Can I sell a flat with a loan? If so, how do you sell a flat with a mortgage? What is worth knowing about the whole process?

Can I sell a flat with a loan?

Can I sell a flat with a loan?

Doubts about whether it is possible to sell a flat with a mortgage usually arise from the fact that after incurring a liability, the bank is always entered in the land and mortgage register. Contrary to appearances, this does not matter much in the context of selling a house or apartment. When securing a loan with a mortgage, the bank will obtain real estate rights only when the borrower proves to be insolvent and will not be able to repay the loan.

If we repay the loan on time, we have nothing to fear, because we are the owner of the property and we have the opportunity to dispose of it, including its sale. In that case, can you sell a flat with a mortgage without the bank’s permission? No, because the sale of an apartment with a loan will require the bank to issue a certificate of the amount to be paid,

How to sell a flat with a loan?

How to sell a flat with a loan?

The process of selling an apartment with a loan is relatively complex, which does not mean that it is very difficult to carry out. Just follow the instructions below and successfully completing it should not be a problem for us. First, we should go to the bank where we repay the mortgage, and then ask for a certificate of our debt. It should contain not only the amount that remains to be paid to us, but also our data (including the bank account number intended for repayment of the loan) and the bank’s consent for early repayment. We can start looking for a buyer just like in the case of traditional real estate sales – placing ads on auction sites and newspapers, as well as by contacting the real estate office.

In each announcement, we should clearly include information that the property is encumbered with a mortgage. Once we find potential buyers, further action depends on whether the buyer buys an apartment or a house from us for cash, or intends to take out a mortgage. In both cases, we should draw up a preliminary contract and collect an advance from the buyer, while if a loan is taken for the purchase of the property, it will not be possible without a notary’s confirmation. Receipt of the advance from the buyer will allow the bank to obtain the so-called promise, ie the promise to delete the mortgage from the land and mortgage register after the loan has been repaid. Importantly, such a promise is only valid for 30 days. Therefore, it is not worth going after it if we plan to conclude an current sales contract and repay the loan in a few months. Having a valid promise, we can proceed to write a notarial agreement for the sale of real estate,

After the conclusion of the contract, the buyer (or his bank, if he took a mortgage to buy the property) transfers the funds to the seller. Payments are made in two parts: one is transferred directly to the bank to pay off the mortgage and the other to the seller. Obviously, the larger the sales amount over the loan amount, the greater our current sales earnings. After payment, we can apply to the court to remove the mortgage from the repaid property.

Sale of an apartment with a mortgage – summary

Sale of an apartment with a mortgage - summary

It is worth knowing the answers to such questions as “how to sell a flat with a loan?” or “can I sell a flat with a mortgage?” Even if, at the time of taking out the mortgage, it seems to us that we will pay it back to the end according to the schedule, life may have other plans for us. 25, 30 or 35 years, during which we will have to pay back the mortgage, it is a lot of time, especially considering how normalized and easy moving abroad has become (for example, due to a better job offer). So there is a high probability that at some point we will dream about selling mortgaged property. In this case, there is no reason to worry, because the whole process is not as difficult and impossible to pass as it might seem at first glance.

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Best fast credits this year /best-fast-credits-this-year/ /best-fast-credits-this-year/#respond Mon, 23 Mar 2020 06:03:06 +0000 http://www.handfulofhate.com/best-fast-credits-this-year/

Resorting to the help of fast loans if necessary is something that a large part of the population has done or has planned to do at some point in their life.

To cope with an unforeseen event, to be able to make an investment or treat yourself; Whatever the reason, fast credits are effective because they fulfill a function that is essential today: immediacy. Therefore, this time we have compiled the best fast credits that we find in the market, and their different characteristics.

What are the cheapest quick credits?

What are the cheapest quick credits?

As we have already mentioned, the main characteristic of fast credits is immediacy: in most cases, in 15 minutes they transfer the requested amount to your account.

But in addition, we will observe that another of the features that fast credits have in common is higher interest rates than loans and credit cards, although many times the first credit is interest-free.

In addition, the return period is quite limited, since it is usually from 0 to 3 months; and the funding limit generally does not exceed 3,000 dollars. What are the most demanded fast credits, and what are their characteristics?

E-Money online loan

E-Money online loan

  • Interest rate: the first loan of up to $ 300 without interest. If you are already a client, perform a simulation to find out the corresponding APR in your case.
  • Commissions: (check with the entity)
  • Term: from 5 to 30 days.
  • Financing: from 50 to 300 dollars (if you are already an E-Money customer, up to 1,200 dollars).
  • Others: response in 15 minutes.

Quick loan Good Credit

  • Interest rate: no interest for the first microloan. For subsequent loans, the APR varies depending on the amount and term. As an example, for a fast loan of $ 100 for 30 days, interest would be $ 30, which is equivalent to an APR of 2229.8%.
  • Commissions: no commissions on the first microloan.
  • Term: from 7 to 30 days.
  • Financing: from 50 to 300 dollars (if you are already a Good Credit customer, up to 1,000 dollars).

Good Finance microloan

  • Interest rate: interest-free the first loan. Good Finance has a daily interest of 0.2833%. For a loan of $ 1000, the APR will be 208.31%.
  • Commissions: no commissions on the first microloan.
  • Term: up to 30 days.
  • Financing: from 50 to 300 dollars.

If you are thinking of reforming your home, giving your business a change of look, or, you have to face any unexpected expenses this month.

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Seller and subordinated loans. /seller-and-subordinated-loans/ /seller-and-subordinated-loans/#respond Sun, 08 Mar 2020 06:35:27 +0000 http://www.handfulofhate.com/seller-and-subordinated-loans/

 

Content of a seller loan

Content of a seller loan

The seller loan is a special form of loan that real estate buyers are granted when buying the house. It is a building block of so-called mezzanine financing, an intermediate form of own and outside capital. While this variant is quite common in corporate financing, it still has a wallflower existence when buying a house. The peculiarity: The seller grants the buyer a subordinated loan, which becomes a substitute for equity due to the subordination in the land register.

It is always in the last place behind banks and building societies in the land register. As a result, the loan default risk is also the highest for the seller. However, since the risk of default is reduced for the other lenders, the seller or subordinated loan increases the buyer’s equity ratio. The subordinated loan is therefore only effective if it is actually subordinated to the land register. In principle, the seller defers a small part of the selling price without remaining the owner of the house.

Conditions of a seller loan

Conditions of a seller loan

The average amount of a seller loan is five to ten percent of the sales price, in most cases between 10,000-25,000 USD. As a rule, a market interest rate is required, but sometimes a significantly higher one. In this case, consider whether the property is still worth it, because in addition to the repayment of the seller loan plus interest, there is also the burden of mortgage loans and / or home loan.

This can make financing significantly more expensive and also jeopardize the creditworthiness of the bank due to the high monthly debit. There are two ways of repaying interest and loans : either payment in installments or redemption at one go at the end of the contract. What is cheaper depends on various factors, such as monthly income or the financial resources to be expected in the future.

For whom the seller loan is worthwhile

For whom the seller loan is worthwhile

The seller loan is good for people with a high income but still low equity capital, as this way they can increase the equity ratio. And: The seller loan also speaks for the intrinsic value of the property, since the seller accepts a certain risk of credit default. A disadvantage is the high level of commitment to the property and the fact that an increase in insurance protection (life insurance) is necessary in order to be able to finance the property, especially if the main earner dies, which causes additional costs.

Other forms of subordinated loan

Other forms of subordinated loan

Sometimes friends or relatives also give subordinated loans, which are then treated in a similar way to pure seller loans. There are also free providers of subordinated loans, but interested parties should pay close attention to the interest rate. In many cases, a decent interest premium is required, so that a shot is not worthwhile.

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What customers should look for in a loan? /what-customers-should-look-for-in-a-loan/ /what-customers-should-look-for-in-a-loan/#respond Thu, 05 Mar 2020 07:09:35 +0000 http://www.handfulofhate.com/what-customers-should-look-for-in-a-loan/

Many customers are currently entering into a loan agreement online. It’s easy and can be done quickly. But if you prematurely conclude a loan contract, you might have some regrets later. This article shows the most important facts.

Nowadays nobody has to accept an expensive loan offer from the house bank. Because a cheap loan can be found on the Internet and there are a variety of offers. Borrowers do not even have to make an appointment with a consultant to complete the transaction.

The loan amount is quickly calculated 

Loan amount is quickly calculated 

Because everything works online at lightning speed with a click of the mouse. The loan amount is quickly calculated and the terms printed out and read through. After that, a contract can be concluded for many offers without the annoying paperwork using the video-ident procedure.

Many consumers welcome this contemporary form of contract processing. Because nobody really has time left these days. The children have to be taken care of or there is a lot of stress at work at the moment. A fast online loan contract, therefore, benefits many interested parties.

However, there can be a nasty surprise during the contract period, especially if important details have not been considered. Then it is suddenly not possible to redeem the loan in one sum free of charge or similar unforeseen things. This does not have to be the case if the contract has been read correctly in advance and the offer has been selected according to your needs despite the lack of a bank consultant.

Compare offers before signing the loan agreement

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No consumer would immediately buy the first inspected car or the first inspected house. Why should something else apply to the conclusion of a loan agreement? After all, in some cases, the cost of the loan is far from low. A comparison is associated with some effort, but the bottom line can be worthwhile.

Because in order to issue a corresponding loan offer, the bank needs some information from the prospect. The offers published online are exemplary in most cases and concern the cheapest possible starting point. However, this is not the case with many consumers.

When checking the contract terms in advance, it is advisable to ask the bank whether it is possible to make a simple condition request with financial standing. This only remains with the credit agency for a short period of time and is quickly deleted. A credit request from financial standing, however, remains saved for one year.

It is visible to everyone and has an influence on the score of the financial standing entry in the information office. In addition, consumers should pay attention to the APR when making a simple request. Because this indicates all costs that are incurred with the loan. This value can be compared to that of other companies.

These documents must be presented when requesting a condition

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Even if it is just a simple condition request, some information must be given in advance. In most cases, a form must be filled out, stating the name, birthday, place of birth and current address.

Furthermore, the bank asks for further data such as the address of the employer, monthly salary and information on expenses. In addition, questions are often asked about ongoing monthly costs such as rent, installments for a car or other ongoing financing. The loan company wants to find out how much money the prospect can spend per month to pay the installments.

If a preliminary decision can already be made on the basis of the information, the credit company sends the applicant an offer of credit. This shows all the costs related to the contract. In addition, all conditions and other conditions are specified. This is mostly the result of the infamous fine print.

The terms of the contract should be carefully studied. If you have any questions, it only helps to contact the potential lender. Some companies allow renegotiations. For others, the conditions are fixed and cannot be changed. In this phase, it is advisable to have further offers sent to you by other companies and to compare the formalities with each other.

Promising offers such as loans without financial standing request

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Offers with meaningful names such as loans without financial standing or loans without collateral are circulating time and again on the Internet. There are actually providers on the market that arrange a loan without financial standing requests or banks that do not require collateral.

However, consumers should pay more attention to these offers. Because in most cases these credit institutions are not based in Germany but abroad. It is then still important to know where the company is located.

However, it is true that foreign companies do not make a financial standing request. This is due to the fact that the credit agency simply does not exist in this country. Therefore, these companies do not insist on asking there.

If the collateral is also dispensed with, then a high monthly income is likely to be important. With a good monthly income, credit companies don’t need any security anyway.

Therefore, interesting offers could be among these offers. However, when advertising, consumers should always pay attention to what is in the small print. Additional costs could make the loan unnecessarily expensive. In this case, it is often cheaper to look for a guarantor or guarantor than to go into debt more than was originally intended.

There are currently a number of interesting offers on the Internet which, on closer inspection, actually offer some advantages. This is mainly due to the fact that the costs for consultants and the rent for a land-based credit institution are eliminated in the case of an online contract. It may, therefore, be possible to conclude a cheap contract online.

However, consumers should do good research in advance and read the small print carefully. A comparison often helps to get an idea of ​​the market situation. It is important to look at the annual percentage rate when concluding a contract. Because it indicates the total costs that are incurred for the loan.

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Revolving loan – what is it about and what do you need to know about it? /revolving-loan-what-is-it-about-and-what-do-you-need-to-know-about-it/ /revolving-loan-what-is-it-about-and-what-do-you-need-to-know-about-it/#respond Wed, 29 Jan 2020 06:22:25 +0000 http://www.handfulofhate.com/revolving-loan-what-is-it-about-and-what-do-you-need-to-know-about-it/

One of the most common reasons for reaching for a loan is sudden, unexpected expenses that we cannot cover with current funds. In this case, we care primarily about time and comfort. We want to receive money quickly and without unnecessary formalities, but this is not always possible. In this case, an interesting solution that could potentially become a lifeline is a revolving loan. Just what is a revolving loan?

How does a revolving loan work?

How does a revolving loan work?

There is a reason why the term “revolving loan is so often searched for”. Most adults who have taken out loans or borrowings have probably heard about this banking product. This is not a completely niche type of loan, but it cannot be denied that knowledge about it is generally less than about even a cash or mortgage loan.

A revolving loan is a kind of extension of the current and savings account in a given bank. So if we want to take out such a loan, you can not do it without a ROR. Thanks to it, a limit is added to the account, which can be used at any time during the term of the loan agreement. It is usually signed for a year, but there are exceptions to this rule.

Is it difficult to get a revolving loan?

Is it difficult to get a revolving loan?

People who are interested in what is a revolving loan will no doubt want to know who will receive it. When it comes to revolving loans, the same conditions apply as for other types of loans. The basis is legal age, it is also necessary to open or already have a current account. Of course, a mandatory element of the whole process is also to verify the customer’s creditworthiness. However, the fact that it usually does not have to be as high as in the case of a similar cash loan can be nice. In addition, as a revolving loan is an extension of a bank account, first and foremost are the influences on it: especially if they are regular and what amounts they amount to.

Above all, the bank’s long-term customers can count on receiving a revolving loan, who at that time could have frequent receipts to their bank account. However, not only – there are many revolving loan offers, and each bank adopts slightly different rules. Therefore, it is definitely worth not deciding on the first offer, which will seem interesting. It may turn out that what seems to be beneficial at first glance is not at all, and another bank will be able to offer much better conditions. Fortunately, currently applying for a revolving loan can be very simple. If we are already clients of a given bank and there is no need to set up a new savings and settlement account, in many cases it will turn out that we will be able to submit the application via the bank’s website or its mobile application.

Is it worth taking a revolving loan?

Is it worth taking a revolving loan?

You can take a revolving loan and not use it for the entire duration of the loan agreement. Contrary to appearances, this would not mean any loss. No interest is accrued on the unused limit, and you never know when an accident can happen. Money granted as part of a revolving loan can wait “for a rainy day”, which will not necessarily happen, but if so, will be without stress and nerves. You will no longer need to apply for a loan when time is running. A revolving loan is also a relatively cheap loan. Its interest rate in each bank may be different, but generally speaking it does not belong to expensive loans.

In addition, its cost also depends to a large extent on borrowers: the faster the limit is repaid, the less interest will accrue. Sometimes, to encourage customers, banks offer no interest if the limit used is repaid within a certain period of time (for example, within a month or two). In this way, you can save extra money, so you should take an interest in this type of opportunity. In addition to interest, there are, although not always, other costs associated with a revolving loan: first of all, the bank’s commission, whether for granting it or for renewing the limit. You don’t have to guess the cost of a potential revolving loan. Individual banks often provide special calculators on their websites to estimate. It is enough to provide information such as the desired amount or expected amount of funds that will be used within the limit.

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How to build a creditworthiness? /how-to-build-a-creditworthiness/ /how-to-build-a-creditworthiness/#respond Mon, 27 Jan 2020 06:41:41 +0000 http://www.handfulofhate.com/how-to-build-a-creditworthiness/

 

 

The answer to the question of how to build creditworthiness undoubtedly troubles many people. And not only young people who are just gaining their experience with banking products, but also those in middle and older age who managed to go through their lives without having to obtain additional funding. Now, however, their needs have changed – they dream of an exotic vacation, which until now remained in the sphere of dreams, plan to renovate the apartment or are forced to replace the car with a new one. Then, however, it turns out that avoiding credit for a lifetime has its drawbacks. What? You will learn this from our article, which will explain to you how to build creditworthiness and why it is so important in the modern world.

Creditworthiness – basic information

Creditworthiness - basic information

At the beginning, however, let’s explain briefly what creditworthiness is. Well, as the name suggests, creditworthiness is the ability of the borrower, ie the entity applying for a loan, to repay the commitment made on time. It consists of such obvious factors as the amount of our remuneration and the type of source of income – whether it is an employment contract (for a definite or indefinite period, if so, when it was concluded), or a contract for specific work or a mandate contract, contract or own business activity (here the legal personality and other aspects resulting from it are also variable).

Our monthly expenses are also taken into account: liabilities arising from owned banking products (such as credit card, account limit and overdraft, cash loan, installment loan, car loan and mortgage loan, as well as non-bank loans and payday loans); living expenses (utilities, food, fuel, etc.). Creditworthiness is also calculated on the basis of less obvious factors: our age, our profession, the reputation of the company in which we are employed, education or place of residence. Based on this data, the analyst, usually assisted by a suitably structured program, estimates how much and for how long we can borrow.

How can I increase my credit standing?

How can I increase my credit standing?

However, is creditworthiness given to us once and for all and can we do nothing to improve it? Of course not! On the contrary, creditworthiness should be successfully built. How? Well, first of all, the higher and more stable our income will be, the better our credibility in the eyes of banks. The type of contract is also important – of course, the highest rated is of course an indefinite contract, which has been in force for more than a year. Frequent changes in employment also do not have a positive impact on our creditworthiness – if we change jobs, we must take into account that most banks will take this income into account three or six months after signing the new contract. In some cases it can even be a year! Another aspect is the timely payment of obligations – loan installments, but also subscriptions, taxes and rents.

Each entry in the checker reduces our ability, although it should be emphasized that those under 30 days may be acceptable by some banks. As for typical demographic data, in most cases we get additional points for higher education, marital status and age. So, for example, a 23-year-old girl with secondary education is less likely to get a loan than a 28-year-old woman with a university degree.

Creditworthiness and credit history

Creditworthiness and credit history

So how to build a creditworthiness? The key issue is having a credit history, in other words, at least one loan product, even for the purchase of an iron in installments. Why? Because it is a kind of pattern for banks when paying off their liabilities. In practice, this means that if we have never taken any, even the smallest loan, our creditworthiness simply decreases.

It is for this reason that credit advisors recommend clients without such a history, and those applying for a mortgage or cash loan for a high amount and a long period, to make a smaller liability whose “model” repayment will have a positive effect on creditworthiness and increase the chances of receiving loan.

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Loans to legal entities: types and terms /loans-to-legal-entities-types-and-terms/ /loans-to-legal-entities-types-and-terms/#respond Sun, 26 Jan 2020 06:43:59 +0000 http://www.handfulofhate.com/loans-to-legal-entities-types-and-terms/

The economic development is directly dependent on business development. And many companies lack their own resources for constant further development.

For this purpose, banking organizations offer to lend to legal entities. And with the help of external funds, it is possible to arrange the purchase of equipment, the purchase of the real estate, etc.

Features of reception

Features of reception

It is clear that the conditions for lending are legal to people who have their own characteristics. The procedure for providing this service is strictly regulated. If the company needs money, you have to meet a number of requirements to get it.

Each financial institution has its own lending rules, which can vary significantly from the specifics of providing a similar service to another bank. Therefore, a bank must first be selected for lending to legal entities with suitable conditions. After you have selected the conditions that are favorable for your company, you can start collecting the required document package.

Important conditions

First of all, the bank organization checks future borrowers for credit history, which should be positive for known reasons. It is clear that no single bank would take the risk of granting a large loan to a person who has experienced serious delays in payment or has not been repaid at all under the terms of the previous agreement.

For this purpose, an assessment of the company’s financial position is made on the basis of the bookkeeping and the annual financial statements, and an account statement lists all types of transactions that have taken place in the account during a certain period.

There are often cases where, with the aim of the proposal, the most suitable option for lending to legal entities from a banking organization is the obligation to transfer the borrower to its service agent. For this reason, it is most often the best offer to apply for credit from your bank.

Bank loans to legal entities require compliance with the following standard conditions:

  • The offer of many banks for those who are open The current account offers the possibility to take out a short-term overdraft. Such a proposal involves regularly replenishing the account with borrowed funds allocated by the borrower for various purposes. This loan is paid out automatically after receipt of money from the company’s account.
  • Form credit line – consider optimal credit products. Individual conditions are selected for each company and should be discussed separately with a specialist in the credit department.

Banking organizations express their loyalty to regular customers because they are aware of their financial reputation and business characteristics. Banks offer some companies the use of targeted programs that can be used to borrow funds to buy equipment and expensive items that most often serve as security.

Also recently successful in developing a loan refinancing program with other banks. Approval is guaranteed for a longer period if funds are paid in time. In other words, if you have all the necessary conditions that are appropriate for the bank rules set, you can carry out the lending process for natural and legal persons.

Advantages and disadvantages

Advantages and disadvantages

The undeniable advantage of lending to legal entities is:

  • The ability of a legal person to receive a really large amount of money and use it for business development.
  • As a customer of the bank where you apply for a loan, you can shorten the processing time for documents.
  • With investment credits, your own production can be modernized or expanded.
  • The same advantage is that the banks offer flexible loan terms and an individual repayment scheme.
  • Since collateral can become not only the property of the company but also the property of the owner of the company, it is also possible to use goods in circulation and even claims.

Disadvantages of granting loans by legal entities include:

  • Collect a large package of documents.
  • In the absence of collateral or guarantees, the interest rate increases significantly.
  • Time-consuming design.
  • Mortgages are expensive.
  • The higher the loan amount or the term, the more expensive the financial resources become.

Types of lending

Types of lending

Banks offer various types of loans to legal entities. Each type has its own design features, repayment, and usage. When choosing a specific credit product type, it makes sense to understand the purpose for which borrowed funds are required. What product options can banks offer:

  • Credit line – with the help of such a credit regular replenishment of working capital. These funds can be used for billing with suppliers to pay for goods (services) or to finance ongoing expenses. This type of lending is renewable or non-renewable. The interest rate is fixed or variable. No collateral is required to register such a line. By providing value, however, the borrower is given the opportunity by the bank to take out a loan on more favorable and optimal terms.
  • Household loans – Registration of such loans is done with government support. Offered to companies that have signed government contracts (guarantees).
  • Urgent Loans – for the immediate receipt of the required cash.
  • Express loans – are expensive loans because the interest rates on them are very high. Your advantage is the quick spending of money for the payment of goods, components or raw materials.
  • Overdrafts – this type of lending is preferred by most large companies. The convenience of such a loan is to replenish the account regularly with borrowed funds of the required amount. Such a loan is paid out at the company’s expense by automatically debiting the account.

Interest rate

The overpayment of a loan is directly dependent on the interest rate. And today, the average interest rate of a legal person is around 18%, and the fact that collateral is provided doesn’t matter. This interest rate can be lowered in the following cases:

  • The borrower is a regular customer.
  • Provision of collateral.
  • Long-term business relationship.

Borrower Requirements

When applying for a loan, each bank presents its own legal entity loan terms, but they are the same in terms of key points:

  • Only an entrepreneur or entrepreneur can become an applicant. It is possible to get guarantors.
  • The applicant must be at least 18 years old.
  • Analysis of the company’s financial activities should show break-even operations of at least one year.
  • The physical proximity between the company and the bank should not exceed 150 km.
  • A prerequisite is a positive credit rating. This article is subject to a thorough review of the bank security service.
  • Even if the company doesn’t meet all of the banking requirements, it can still get approval to receive funds. At the same time, the interest rate will be overvalued according to the terms of the agreement and the loan term will be short.

Registration documents

bank

As mentioned above, loans to legal entities in Russia will require a lot of strength and patience from the borrower. Preparing the document package required for submission to the bank is time-consuming. At this point, it is necessary to:

  • Complete an application for funds in the form of a bank organization.
  • Prepare copies of the passports of the chief accountant and owner of the company.
  • Registration certificate with the IFTS.
  • Legal package of documents.
  • Extract from the register.
  • When you provide property as security, you also submit documents.
  • A package of financial documents to confirm the effectiveness of the company and its stable condition.
  • Contracts with different counterparties.

Maximum and minimum loan amount

Each bank sets its limits on prepaid amounts. The minimum amount for the issue of a loan is usually 300,000 dollars, and the maximum amount that can be received can even be 150 million dollars. Granting a loan for a large amount implies transferring valuable collateral to the bank, provided that guarantors are attracted.

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