Loan for pensioners

Are there loans for retirees?

Are there loans for retirees?

Life could be so simple: Finally, work no longer calls every day and there would be enough time to discover the world and pursue your beloved hobbies. But often enough there is a lack of financial means to fulfill a long-awaited wish. Unfortunately, many banks here are not exactly cooperative and refuse to give pensioners a loan. They have the problem that they have many wishes but are not financed.

Loans for pensioners are completely excluded from many banks, which is justified by the higher risk of death. Every bank wants to get back the money they have lent and sees the risk that older people will no longer be able to make the repayment.

On the other hand, the demographic development of society is quite clear. People are getting older! In theory, you would also have more time to repay loans. Some banks are already rethinking this, others may take some time.

Are you a pensioner and want a loan? We check every single case!

Why are pensioners less likely to get a loan?

Why are pensioners less likely to get a loan?

People are getting older – the time factor no longer plays a role in repaying a loan. However, statutory pensions are getting lower, which in turn means that less money is available for repayment each month.

Banks also justify their refusal to grant loans to pensioners because older people are at greater risk of illness and death. This could lead to personal bankruptcy if the borrower becomes ill or even in need of care. Every bank will be careful here, because they want their loaned funds to be repaid.

A residual debt insurance could help because it covers the risk of default in the event of death or illness. Loans for pensioners are still refused by many banks. Others in turn demand significantly higher interest rates or set the monthly installments so high that the loan term can be kept very short. Generally, retirees get worse terms if they get a loan at all.
Here are the most common reasons for refusing a loan for pensioners:

  • higher risk of death and illness
  • possible personal bankruptcy due to excessive costs
  • Insufficient pension payments
  • no guarantors available

At the same time, once again an overview of the consequences that can arise when granting credit – of course all negative for the pensioner:

  • worse conditions, especially with regard to the interest rate
  • short terms for the loan
  • expensive installments for residual debt insurance
  • Granting only small amounts of credit

How is the loan approved?

A positive Credit Bureau information is always helpful for lending. If you are not sure as a loan applicant here, you should request information in advance and have any incorrect entries deleted or changed. Banks are more satisfied with a “clean” Credit Bureau and are more responsive to the requests of the applicants.
Regular pension income should also be available. It does not matter whether they come from statutory or private pension insurance. At least 1,000 USD should flow into the account per month. Important: Every pensioner can increase his chances of getting a loan here if he ensures that after deducting all costs there is still enough money left for the loan installments.
In addition, a pensioner should be able to offer additional collateral. These can be taught in the form of real estate or by guarantors.
At this point, an overview of some options that can have a positive impact on lending:

  • positive Credit Bureau information
  • regular income from statutory or private pension insurance
  • possibly further income
  • collateral
  • guarantee
  • Credit default insurance

If the loan is applied for, various documents must be submitted. These include, for example, the pension notification and other documents that can serve as proof of income. In addition, there can already be a declaration by a guarantor who would be liable for the loan. In addition, the willingness to take out credit default or residual debt insurance can be signaled.

Which banks are eligible?

Which banks are eligible?

First of all, the house bank is certainly the number one contact point when it comes to applying for a loan. However, as in many other cases, this is not necessarily the best contact because the conditions are often less good. It is therefore worthwhile to use offers from other banks. An online bank, for example, can offer significantly better conditions.
At this point, we would like to point out the possibility of a personal loan, which can be granted, for example, by various internet banks. The loan project and the person of the potential borrower can be presented here. In the best case, there are then several investors who jointly provide the loan.
A loan may also be available to friends, which in turn has the advantage that only low interest is often payable – if at all. On the other hand, acquaintances and relatives are cautious when an older person requests a high loan.

Are you a pensioner and want a loan? We check every single case!

What needs to be considered when applying for a loan?

What needs to be considered when applying for a loan?

The loan application must of course be completed in full. First of all, this includes personal and address data. Information on statutory or private pension insurance is also requested, along with the relevant evidence.
Since the banks also want to know which monthly charges the borrower has to bear, proof of rent payments, additional costs and other expenses, such as for insurance, must be provided.
If other loans are serviced, they must also be listed. They should be mentioned in the amount of the monthly charge and should not burden the existing capital too much.
Is there any income? Then they must also be mentioned, because they increase the credit rating. Real estate can also be mentioned here – these offer a certain level of security if they are owned by the loan applicant as residential property.

Of course, it is also important: Does the loan have to be taken out at all? Or is it enough to save a few months and then fulfill your wish? For example, when it comes to traveling, retirees are significantly more flexible. You are no longer tied to company vacation times and can therefore simply travel a few weeks later. However, other requests often have less time and must be fulfilled directly. Even a pensioner cannot avoid taking out a loan here.

Here are some tips on how the creditworthiness of pensioners can be positively influenced:

  • Choose short terms of up to three years.
  • Agree on low loan amounts.
  • Positive Credit Bureau entry and regular repayment of further loans.
  • Taking out residual debt insurance.
  • Application with two borrowers – ideally together with the spouse.
  • The regular income clearly exceeds the expenditure.

Many banks rely on collateral and would like the property to be transferred as security. Such a loan comes into question if, for example, a new car is to be bought. The so-called non-cash reference is important here. If real estate is available, it can also be used as security. It also makes sense to leave the amount of a mortgage that is entered in the land register there. This has the advantage that there is security about the property again when the loan is granted again. However, the prerequisite is that the new loan is then taken out from the bank in whose favor the mortgage exists.
Otherwise, pensioners only need to ask a bank for a loan and not be afraid of the risk of using an online bank or its offer. These banks in particular often offer the best conditions because they do good business themselves. They are often much more accommodating to pensioners than many branch banks.


Debt restructuring for home loans

Debt restructuring – what does that mean?

Debt restructuring - what does that mean?

If you reschedule a loan, it means that you terminate the previous loan prematurely and take out a new one. The main reason for this approach is that customers expect better terms from the new loan.

Debt rescheduling is particularly useful if the new loan brings lower interest rates. This can be the case when the general interest rate level has dropped. However, there are also personal living circumstances that make it possible to get a cheaper loan. This is the case, for example, if your salary has increased so that you can now boast a higher credit rating. Even if there was a negative Credit Bureau entry at the time of building the house, which has since been deleted, this can result in you receiving a cheaper interest rate.

Benefit from low interest rates

Debt restructuring is currently more topical than ever. This is because interest rates are at historically low levels. Not only people who take out a new loan can benefit from this. Even people who have already received this can get a cheaper loan through debt restructuring.

The reason for the low interest rates lies in the monetary policy of the Best Bank. It seeks to boost the economy by increasing the amount of money in circulation. One way to do this is to lend cheap loans to banks.

Not only do banks and business customers benefit from this – private individuals also receive extremely cheap loans in this way. Therefore, it is very important for everyone who is currently repaying a loan to review the old contracts and compare them with new alternatives. The savings can be substantial.

The following calculation example shows how great the potential savings are. For example, if you took out a loan of $ 100,000 over a ten-year term with full repayment and an interest rate of 4 percent, you will have to pay a total of around $ 23,000 in interest. If an interest rate of 2.5 percent is now possible due to the low interest rates, the rates are otherwise only around 14,000 USD under the same conditions.

This calculation clearly shows that even with a relatively small loan amount for a house purchase, the saving potential is around 9,000 USD. If you have taken out a higher loan, you can save a lot more money. In addition, in many cases the difference between the current interest rate and the interest rate after debt restructuring is significantly higher than in our calculation example. This also provides even more opportunities to save money.

Note the prepayment penalty

Note the prepayment penalty

The previous chapter described how high the savings potential is even if the interest rate is lowered slightly. Although this option seems very tempting, it is important to carefully review the terms of the old contract. In this case, banks almost always demand prepayment penalty.

In your original loan agreement, you agreed with the bank that your loan would be valid for a certain period. If you cancel this now, the bank will lose the business due to the interest accruing. For this reason, it collects the prepayment penalty, which is to be considered as compensation for the lost profit.

The amount of the prepayment penalty can vary from case to case. This depends primarily on the individual agreements that can be found in your loan agreement. The amount of the remaining loan and the remaining term are also important. It is therefore advisable to read the contract carefully first and to contact the bank or, if necessary, a lawyer if anything is unclear.

Legislators have created favorable conditions for loans with very long terms. If you took out the loan more than ten years ago, there may be an extraordinary right of termination without incurring early repayment penalty. In this case too, it may make sense to contact the bank directly or, if necessary, a lawyer.

The forward loan as an alternative to classic debt restructuring

The forward loan as an alternative to classic debt restructuring

If you want to benefit from the currently low interest rates, but do not want to terminate the loan contract prematurely due to high compensation, there is another option. This is called the forward loan.

You are already entering into a loan contract for the date on which your current contract expires. In doing so, the bank undertakes to grant you an interest rate that is already being set and which is roughly the current level.

However, the interest rate is usually slightly higher than for a loan that you take out immediately. However, this rate remains valid even if the interest rate should rise in the meantime. Therefore, you should only conclude such a contract if you assume that interest will rise significantly by the end of your contract.

This variant has the disadvantage that you still have to pay the high interest of your previous contract until the end of the term. In addition, the interest rate level is slightly higher than with an ordinary loan. However, you do not have to pay a prepayment penalty this way. This alternative is therefore particularly suitable for loans for which a very high value has been agreed.

When is debt restructuring worthwhile?

When is debt restructuring worthwhile?

The most important question for all people who have to pay off a loan is certainly whether the debt restructuring is worthwhile for them personally. It should be clearly stated that this is not always the case. It is therefore important to always examine the individual case and answer this question individually.

First of all, it is important to check the terms of the previous contract. On the one hand, you have to consider how high the interest you have to pay with your previous contract. If you have difficulties with the calculation, an interest calculator on the Internet can also help you.

On the other hand, you have to take from your previous contract how much the prepayment penalty would be. If you have problems understanding the difficult wording of the contract or performing the corresponding calculations, it makes sense to make an appointment with your bank to clarify these questions.

In the last step you have to calculate how high the interest would be on a new loan. For this, it is necessary to obtain corresponding offers from the banks. A credit comparison can also be helpful.

When you have finally determined these values, you have to compare whether the interest on the new loan plus the prepayment penalty is cheaper than the interest on the old loan. If this is the case, the debt restructuring is worthwhile for you.

Debt restructuring step by step

Debt restructuring step by step

At the end of the article, a small guide is now to be presented, which presents all the necessary steps for debt restructuring.

  1. Find out about the current loan offers. You can use comparison computers on the Internet, for example, which offer a lot of helpful information. If you find an interesting loan, you can get a specific offer. This way you can see early on whether you meet all the necessary conditions for the new loan.
  2. Find out about the amount of the prepayment penalty. You can find this in your loan agreement or inquire with a consultant at your bank.
  3. Calculate the difference between the interest on your previous contract and the cost of the new option plus the prepayment penalty incurred. It is only sensible to continue with the further steps if this calculation shows potential for savings.
  4. Also take into account all other conditions of the new contract. With regard to the possibility of special repayments, for example, these should be at least as good as with your previous loan.
  5. If you have decided to reschedule the debt, you must first conclude the follow-up financing contract and then terminate your existing contract.

Forward loan – terms and interest in comparison

Forward loans are not actually a type of loan, but rather a so-called financing offer from the banks. Since a forward loan is concluded today for the future, it gives a borrower the opportunity to secure this interest in the future even before the current loan expires. With this protection, the borrower does not risk that the interest charge increases after the fixed interest period. The borrower is already concluding a loan contract with a fixed interest rate, which will replace his old loan after the fixed interest period expires. In addition, a forward loan can only be applied for if the mortgage lender already has a mortgage loan that will be available for follow-up financing in a few months. On the other hand, an application is not possible if the mortgage lender only decides to buy a property in a few years and wants to secure the favorable entry interest rate today.

How does a forward loan work?

How does a forward loan work?

The way a forward loan works is almost the same as that of an annuity loan, with the only difference that a loan contract is already concluded today, but it will only be called up in the future. As a result, the forward loan seamlessly connects to the existing loan as follow-up financing. The interest rate of the forward loan is calculated on the one hand from the nominal interest rate of the current loan. This is then added to the monthly remaining term of the current loan. There is also a pre-determined surcharge. How far a customer can agree on the new interest rate to expire varies from bank to bank.

The payment of the monthly installment for the forward loan begins when it is paid out, and commitment interest usually accrues for the time until it is paid out. Currently 0.015 to 0.045 percentage points per month are common (as of 03.2011). The fixed interest rate for a forward loan is between five and twenty years and can be completed 12 to 60 months in advance. The longer it takes for the borrower to take out his loan, the higher his monthly borrowing rate will be. Example:

  • Forward loan as follow-up financing, fixed interest period 10 years
  • Closing takes place three years before the follow-up financing is due
  • Assume that the borrowing rate is 4.95 percent and the interest premium is 0.01 percent. In this case, the borrower pays 5.31 percent interest on his loan over 10 years (4.95% + 0.36%)

Mortgage lenders who use a forward loan then only have to pay the fees for the transfer of the land charge. Overall, forward loans are particularly suitable for all those whose fixed interest rates will expire in the next 1 to 5 years. With the forward loan, borrowers then secure their current interest rate. But be careful: this calculation only works if the interest rates actually rise in the future. If, on the other hand, interest rates remain the same or even go down, in the worst case there will be negative business. The mortgage lender bears a certain risk, because on the one hand the person who concludes a forward loan has to accept it later, on the other hand nobody can predict the development of future interest rates today. The loan must therefore be accepted even in the event that interest rates are already clearly falling again in the meantime.

Of course, the borrower has the option to cancel the forward loan (but this is not possible with all banks!), But in return a corresponding prepayment penalty will apply. Prospective buyers should therefore use so-called “short-term cancellable forward loans” in uncertain times. In this case, the borrower then has the option of terminating the forward loan, for example, until the end of the next quarter against a corresponding interest premium. At the same time, he now has the opportunity to switch to a cheaper loan – and without any prepayment penalty. A forward loan that can be terminated at short notice therefore offers the mortgage lender a significantly lower risk.

Compare and calculate conditions for forward loans

Compare and calculate conditions for forward loans

You can use our calculator to determine which interest rates banks and brokers currently offer for forward loans with specific lead times:

Debt restructuring options by the borrower

More and more builders and homeowners are using a forward loan as a follow-up annuity loan. Anyone who receives such a debt rescheduling option through their lending bank should definitely compare and not accept every offer without asking. Often, a corresponding bank change can save several thousand USD. Most funding institutions also offer corresponding forward loan financial calculators on the Internet, for example on the Internet platform. The surcharges can also be calculated accordingly, because the shorter the lead time, the lower they are. The higher the premiums for a forward loan, the greater the indication that interest rates will rise in the coming months or years. The loan amount of the new contract corresponds to the remaining debt of the old loan on its expiry date.

Borrowers should bear in mind each time they use a forward loan that the respective employees of the financial institutions almost always assume that interest rates will rise. On the one hand, these are only assumptions, on the other hand, this is also justified by the fact that energy prices are also constantly rising, accompanied by rising inflation. However, these assumptions are not factual. Rather, the average interest rate over the past 10 years should be used as a benchmark, and this was around 6.5 percent. This shows whether the mortgage rate corresponds to a low or a high rate phase. This shows that there may well be excellent consultants with excellent specialist knowledge in the mortgage lending business, but unfortunately none of them has a crystal ball, which would ultimately not be useful.

So if you want to calculate an exact real estate financing, you need different factors and aspects, which should be divided into several steps if possible. Because every step in turn has a corresponding impact on overall financing. At the beginning, therefore, there must be the determination of the debt. So the borrower needs to know what his real estate loan is. This first step has a huge impact on all others, because it shows the amount of equity accordingly. The more of this there is, the lower the need for outside capital. The calculation:

After this first step, the loan forms that can be financed are determined in a second. In addition to a home loan, this can also be a mortgage loan. The monthly rate is then determined on the basis of the loan amount and the respective interest rate, which then represents the total charge. The borrower must then bear this monthly for a longer period. Example:

If the loans listed in the example expire, the forward loan takes effect. The benefits are even greater if government subsidies such as child benefit have expired in the past and these revenues, which are no longer available, have led to a contribution burden on the property. The ongoing increases in energy prices such as gas and electricity have also made themselves felt in recent years, and these additional costs are also increasing the budget considerably. If, in addition to the cosmetic repairs, there is also a new heating system, it quickly becomes financially tight. Anyone who still has money left for their studying children – probably that. The financial consideration in the form of a forward loan is now that this game of increasing the monthly mortgage rate does not continue “indefinitely”. In this context, the mortgage lender should also be clear about keeping his property in his portfolio until the forward loan expires, in order to avoid possible prepayment penalty.

With a forward loan, however, the property owner and borrower do not buy the right to follow-up financing at a predetermined interest rate, which can expire if one is no longer required! Rather, the borrower enters into a specific loan relationship with his financing bank, the effectiveness of which begins after 14 days (statutory cancellation period). Termination is only possible in certain cases, e.g. when the property is sold.

If you are not sure about the conclusion of a forward loan, you still have the option to secure the exit option in addition to securing the future. This is done through a large number of follow-up loans on the market with the right to terminate. Another option is the so-called cap credit. This is a loan with variable interest rates and a fixed interest rate cap (the cap). The borrower also benefits from interest rate cuts by linking to money market rates during the year. At the same time, the risk of an interest rate hike can be limited by a guaranteed maximum interest rate.

However, a security premium is due for the assurance of the upper interest rate limit. But the Lite Lender is particularly characterized by its flexibility in terms of repayment, making the loan business more calculable for the borrower.

Rescheduling Alternatives

Alternative 1: There is a possibility of rescheduling when the loan expires and the lender can also be changed without any problems. After applying for a loan from the new lender, the mortgage is assigned by the old lender. The assignment takes place between the banks, the borrower should only plan a processing period of four to six weeks. In most cases, the new bank also evaluates the property free of charge.

Alternative 2 : If a loan has a total term (fixed interest period) of 15 years, of which 10 years have already expired, a debt rescheduling can be carried out in the event that the market has a correspondingly low interest rate at that time. This is the case law in favor of the borrower, who is basically entitled to repay his loan in whole or in part after 10 years (section 489 (1) no.3 BGH). The borrower only has to give 6 months’ notice to cancel their loan with the existing bank.

Alternative 3: Many borrowers do not want to wait until the end of their fixed interest rate with a debt rescheduling and therefore choose the option of a forward loan in order to avoid the risk of rising interest rates. However, this option only applies to loans with fixed interest rates that expire in a maximum of three years. Clarification is also necessary, because not every bank that provides credit is willing to do so. In the event of a redemption at the old bank, an offer from another bank is now required. In order to make a financing decision at the new bank, the borrower must bring all property documents.

Alternative 4: Borrowers can make early debt rescheduling within an existing loan. However, the approval of the financing bank is required for this. Not all banks agree to early loan termination here – they are not even obliged to do so! If the bank declares its consent, the borrower has the right to cancel his loan within a period of 6 months. If the loan is terminated prematurely, banks have the option of claiming a prepayment penalty with an additional surcharge of up to 100 percent according to current BGH case law. Costs between 5 and 10 percent calculated on the total loan amount quickly accrue here.

Borrowers have many options, as the various examples show. Ultimately, however, everyone has to decide in their own individual way.

The subordinated forward loan

Anyone applying for a forward loan usually has to secure their loan with a first-rate land charge. If the borrower already has a land charge entry, this can be assigned to the new bank from the old bank. This in turn is associated with significantly lower costs for the borrower. This loan from the new bank must now also be secured in the form of a senior land charge in the land register. However, an exception can be made. Because in many cases follow-up financing is desired at a time when there is already older financing for the same financing object.

Example: A family financed their former condominium worth 120,000 USD through two loans: the first loan of 100,000 USD had a borrowing rate of 10 years, the second loan of 20,000 USD a borrowing rate of 5 years. In the end, the loan of 20,000 USD should be repaid entirely from own funds. For this reason, this combination was chosen in our example. However, due to major restructuring measures, these own funds were no longer available. It was therefore decided to secure this share of the financing with a forward loan. If the family does not receive a correspondingly attractive offer for follow-up financing from the current financing bank, they can either redeem the corresponding loan or reschedule to another bank, but the current financing bank remains a senior creditor in the land register.

Although the family only wants to finance the small part in the amount of 20,000 USD, the new bank that carries out this follow-up financing will always stand behind the primary land charge. This in turn brings with it the problem that the family will not find a financing provider at all for this constellation. This problem can be avoided with a subordinated forward loan.

The loan-to-value loan

A loan-to-value ratio is to be understood as the percentage that falls under the external financing. And it also represents the long-term achievable sales price of the property to be financed. The bank estimates between 70 and 90 percent of the actual purchase price. This serves as risk protection for the bank in the event that the borrower no longer meets his monthly obligations. The mortgage lending value thus serves the long-term risk assessment by the lender (so-called mortgage lending limit).

Within the mortgage lending value, a distinction must be made between owner-occupied property and rented property. If you own your own home, the mortgage lending value is based on the real value of the property (land value, building value). In the case of rented properties, on the other hand, the mortgage lending value is based on the estimated income through permanently achievable income. In order to be able to counter any fluctuations in the interest rate market, the credit institutions levy a security discount, which can be between 10 and 20 percent. The loan-to-value ratio thus reflects the relationship between the nominal amount and the loan value.

In order to determine the mortgage lending value of a property, this can be calculated in advance by each property owner himself under 1.3.1. For the bank, however, an appraisal by an independent building expert is required. In this way, interested parties can influence the conditions that the banks offer their customers for real estate financing in advance. Only those who correctly assess the value of their property will receive a correspondingly low building rate. So if you want to save a lot of money for your financial structuring, you should plan the loan expiration accordingly in your financing in addition to your early calculation. Example:

This example makes it clear that prospective buyers of forward loans should always make sure that the bank takes into account any mortgage loan deductions. An optimal comparison therefore always takes place under identical conditions by specifying the loan amount and the market value of the bank to be financed. The result of the banks in this calculation then always includes all customary bank surcharges and discounts that arise depending on the loan amount. However, if the market value is calculated by the banks, it rarely turns out to be identical for all. However, a different market value again has an impact on the interest condition, which can be significant.

New standard in property valuation

The value of a property depends on many factors. Not only the experience of the expert counts for the evaluation, but also constant market and economic observations. Therefore, experts do not rate real estate as a statistical system, but as a dynamic economic asset, the value of which is determined not least by private, economic and social events.

How to calculate the value of a house

With the market-oriented valuation of a house or a condominium, the sales success depends on and fails here with many. Buyers and sellers have to be clear about what their house is really worth and have to be aware: Even if it hurts at first, the value of an object is always exactly where supply and demand meet. For example, it is conceivable that a house or condominium in the same district could easily cost 15,000 USD more or less; This is despite the fact that both houses are equivalent in size and equipment – but they can differ in their surroundings. These criteria, which can have a significant impact on the price, are, for example, south-facing / north-facing, residential street / thoroughfare or a clear view or a view of the upstream buildings.

Another aspect is the evaluation of the offers. The purchase price, living space, plot size, construction method, features (i.e. basement and attic expansion for houses or the number of residential units in a property for condominiums), garages or parking space and, last but not least, the assessment of the direct location are of enormous importance. Not to forget that the most important thing when selling real estate is the location and always the location. Remember that a beautiful carpet, the new wallpaper on the wall or the hobby room that you have painstakingly expanded are generally not decisive for the purchase.

Therefore, prepare yourself for the visit and the sales talk in peace. When opening the conversation, it is important whether the contact is the first to get to know or a follow-up appointment. Therefore, come to the facts right after the opening of the conversation. Give the prospect all the information he wants; do not try to gloss over clear facts or even cover them up. The slightest insincerity that the buyer notices can end the sales pitch.

You can use the following questionnaire to calculate your house or apartment with certainty. Enter your points, you can also use intermediate values, but do not give any minus points.

The alternatives to the forward loan

The alternatives to the forward loan

There are only a few fully-fledged alternatives to forward loans. If you want to hedge against rising mortgage interest rates, you can also achieve this with interest rate derivatives. But this alternative is far too speculative for real estate financing. On the one hand, the value can be multiplied, but in reverse, the entire system can also become worthless. This type of protection is also quite expensive. But even the conclusion of a building society savings contract is not a real alternative, because if you wanted to secure at least 50 percent of the remaining debt of 120,000 USD in 3 years, for example, you could only achieve this through a building society contract worth 60,000 USD. The monthly contribution required for this, which would be between 800 and 1,200 USD, would no longer be sustainable for most.

An alternative would be the option of a special repayment within an ongoing financing. In this way, the current repayment at the time of follow-up financing could be drastically reduced. Another alternative to the forward loan would be to immediately repay the loan by repaying the loan through new financing. If, however, at least ten years of the fixed interest period have not yet expired, the banks only have to agree to immediate termination in exceptional cases, such as when the property is sold. Interest savings can also be made with a savings plan. However, most savings plans that are used to save capital for real estate financing are based on investment funds. However, the average expected performance is an annual percentage between six and ten percent.

But here too, the higher the expected return on a fund, the higher the risk. In the worst case, the entire stake can be lost, even if total losses are uncommon for non-leveraged investment funds. However, a price drop of over 50 percent in a year is realistic and must be taken into account. It is therefore by no means certain that the desired capital will actually be available when it is needed. A high risk for every mortgage lender.

Secure low building rates now up to 60 months in advance

If you want to secure low interest rates for your follow-up financing now, you can request a free financing offer from our partner, Interhyp AG.


Property Separation and Creditworthiness

credit loan

Banks distinguish between two types of borrowers who can take, for example, a mortgage together. These are marriages covered by the property community, and couples (marriages covered by interfaith, life partners and even unrelated persons) who do not build joint property.


Property separation and credit


If a couple with a property community buys an apartment on credit , each of the spouses becomes the owner of half of the property and half of the liability towards the bank. The couple is jointly and severally liable for repayment of the debt incurred.

If people applying for a loan jointly have property separation (or simply live in an informal relationship), then they can shape the provisions of the contract to a much greater extent , e.g. divide assets and debt differently than equally. In a sense, the bank treats them as a company, not as a marriage.


When is it worth deciding on property separation?

When is it worth deciding on property separation?

Separation of assets is essential if, for some reason, you do not want to be limited in important financial decisions. Separation is also recommended if you want to protect money from the effects of unsuccessful investments or unsuccessful projects. Only with the separation of property will a husband or wife not be liable with their property for the repayment of personal obligations of the second half.


The property community and the spouse’s consent to the loan

The property community and the spouse

It is worth remembering that the property community gives spouses the opportunity to conclude smaller loan agreements individually (e.g. consumer loans or payday loans) without the partner’s knowledge and consent. This is, moreover, one of the reasons why couples, in which one of the people is known for irresponsible use of financial services, decide on the separation of property. They do not want to bear the consequences of the spouse’s recklessness (e.g. having to pay back arrears or entering in the register of debtors).


How does asset separation affect creditworthiness?

How does asset separation affect creditworthiness?

Does therefore property separation have any effect on creditworthiness? Can have. An example is the situation when – thanks to the separation of property – one of the spouses manages to avoid liability for the spouse’s errors, including the burden on their own creditworthiness, income and assets. A married person who has a “clean account” still remains a reliable customer for the bank.

In the case of mortgage loans, asset separation is a neutral signal for the bank. The key to calculating creditworthiness will be how much your spouse earn, what other obligations they have, and how many people they support. The advantage will be, for example, the fact that both husband and wife earn, or that they do not have debts, including past due, in other financial institutions.

Whether the couple has a community or property separation will affect the way the bank constructs the loan agreement, but – under the normal scenario – will not directly affect the pair’s ability to take out a loan.


Mortgage loan with property separation

Mortgage loan with property separation

To sum up, when it comes to large loans (e.g. mortgages), banks have the tools to effectively handle marriages with a property community and with property separation. These arrangements between spouses will not directly affect the couple’s creditworthiness.

Property separation can be a practical tool to protect your personal creditworthiness from the consequences of financial errors of the second half. This applies especially to smaller loans, which can be taken without the knowledge and consent of your spouse or the effects of business failures.


A Few Things you should Know about Creditworthiness

credit loan

Creditworthiness is, in a nutshell, our ability to regularly repay a loan. Depending on many different factors, our ability may be greater or smaller – the greater, the more credit can be given to us.

How do banks calculate our credit standing?

banks credit

Basically, every bank counts our creditworthiness in its own way. In another example simplification, you can define creditworthiness as the difference between our income and monthly expenses (including other loan installments). In this way, we know the amount that we can spend on paying off a new loan. Please note that after the T recommendation comes into force, our monthly credit obligations may not exceed 50% or 65% of net income. Otherwise our application may be rejected.

Of course, the most important parameter that is taken into account by all banks is our earnings. When applying for a loan, we usually have to provide a certificate from the employer confirming the amount of monthly salary. In the case of a fixed-term or indefinite employment contract, the matter is simple. In the case where we run our own business, we work on a mandate contract or for a specific task, the assessment of our ability is more complicated, as we become more risky clients for the bank. In this situation, banks decide to be much more cautious to assess the client’s ability. Therefore, it should not surprise us that having the same disposable income (it is the part of our income that we can spend on consumption, investment and savings – that is, after deducting fixed costs of living) as a person employed under an employment contract, we have lower credit standing.

Detailed calculations of our ability

The calculations have a big impact on the particular bank’s approach to the main issue – how much does a given person need to maintain monthly? Banks usually calculate these amounts very differently – from PLN 400 per person to even PLN 600-700 per person.

Sometimes banks include all loans, including “mobile” loans – an account loan or a credit card. It also happens that the banks count other maintenance costs – e.g. PLN 300 per car. Some scrupulously include every household expense, bills, etc., while others have a general, not very precise amount per head. Therefore, if a bank calculates your low or even lack of creditworthiness – try to check with another bank.

Credit problems

Credit problems

An important factor to which we should pay special attention is the form of our employment. Unfortunately, banks can reduce our creditworthiness by up to one fifth if we work on a specific contract or work contract compared to a person with an employment contract. For banks – which is sad – it doesn’t usually matter that a person has been getting the same income for a long time – and that he is comparable to a full-time employee.

Ways to increase creditworthiness

If you have several loans on your mind, it’s worth considering improving your financial rating – in the eyes of the bank. There are a few simple ways to do this. First of all – we are closing our overdraft. Opting out of credit cards can also help us – then “mobile” loans, which can be variable each month, will not be taken into account.

We can also submit applications for extension of repayment for other loans – this will reduce the installments and thus the cost of monthly liabilities.

Another method is a consolidation loan, which should reduce the amount of the total installment and thus improve the creditworthiness.

What has changed the provisions of the T Recommendation?

loan recommendation

First of all, the possibility of taking too much loans was limited – people earning below the national average cannot repay installments above 50% of their net income. For people earning above the national average, the limit is 65%. We must also have 20% own contribution, and if we do not have it – it is mandatory to insure it.

BIK – Credit Information Bureau


All information about our debt usually goes straight to the Credit Information Bureau – including unpaid installments but also information about recent loan applications from other banks. Since this is the first place that analysts of the bank that grant us the loan will look, it would be good to have a “clean file”. If we are not sure about the data regarding our person, we can get a report from BIK about our current obligations for a small fee.


Benefits of having a pre-approved personal payday loan


One of the things that most bothers people who are looking for a personal payday loan is to have to meet the requirements and paperwork requested by the financial institution they attend, in addition to having to wait for the evaluation to be carried out and decide if the Credit is approved or not. However, if you are a responsible customer, you can skip all this thanks to pre-approved loans.

These personal payday loans are granted before the client asks for them, that is, their credit history is evaluated, as well as their financial movements and if they do not have any debt and have been reported as a good payer, the bank decides to grant a loan for a X amount that he can decide whether or not to accept.

Having a pre-approved loan does not mean that you have a debt with the bank, but if you wish, you have the possibility to accept that credit because you meet the necessary requirements. But what are the benefits of having a pre-approved loan? Next, three of them:

You don’t need to comply with the paperwork to get it

First, the bank has already made an evaluation of your history and customer profile and if it was offered, it is because you are approved.

That’s why you no longer need to submit more papers or justifications. In most cases, just submit your ID to accept the credit.

It tells you that you have a good credit history.

It tells you that you have a good credit history.

Banks will not risk pre-approving a credit to someone who represents a risk; that is, if they notify you that you have a pre-approved loan, it is because they consider you a good customer and therefore allow you to access these types of products.

You can access it in less time than a regular request

You can access it in less time than a regular request

While on a regular basis it would be necessary to wait a few days for the bank to analyze your profile, your data and your documents, as all that was previously done, you will be able to access the cash in a much faster way.

If you have a good track record, you might even have several pre-approved loans, but that does not mean that it is wise to accept them all; On the contrary, the ideal is that you compare the alternatives and see which one suits you best.

If you want to check what pre-approved loans you have, use Lily Bart’s personal payday loan comparator and enter your ID to get that additional information.


Cheap Payday Loan on Bank

Novabank offers its clients a cheap payday loan. The bank’s customers will be able to take advantage of the new and cheap payday loan. Novabank encourages its clients to take advantage of their offer through a low interest rate on the loan. In addition, the loan amount you can apply for is up to PLN 120,000, while the loan period can be set up to 108 months. The possibility of using money for any purpose is a very important issue.

For its part, the bank does not impose on its client for what purpose it should use the learned money. An important feature of the loan is also the possibility of obtaining a decision within 15 minutes. Novabank also informs that in order to enjoy a low loan interest rate, you should regularly transfer employee remuneration or pension benefits.


Additional possibilities

credit loan

Novabank offers customers the opportunity to take advantage of credit holidays. Credit holidays are available once every twelve months, subject to repayment within the first 6 installments. The customer also has the option of choosing on which day he wants to pay off his installment.

A very convenient solution is also a text reminder via SMS about the upcoming installment repayment date. In addition, the bank allows you to combine income with other family members, so that the client is able to apply for a higher loan. It is also possible to set up an automatic bank transfer, so that the customer does not have to worry about timely repayment.


More options and safe

credit insurance

The customer can also take advantage of credit insurance in one of several packages available. Basic insurance applies in the event of death and permanent disability, the additional option insures against job loss, temporary disability and serious illness. The full insurance package includes all the forms listed above.

However, if the customer decides that the amount of credit he has taken out is too small, he can apply for additional funds the next day.

Novabank is directly focused on the customer. The products at its disposal are definitely focused on the borrower’s convenience and do not allow any inconvenience.


Start Exercising With a Credit Card

credit loan

The fashion for “being fit” is probably one of the most useful trends in recent years. Poles fell in love with physical activity, as evidenced by parks full of runners or crowds at gyms. And that’s good, because sport is health, even in a recreational version. City Snowlowry decided to reward those who take care of their form on a daily basis and encourage those who lack motivation to exercise.


Promotion of City Snowlowry and WideFit – what’s going on?

credit card

He just wants to exercise with the latest credit card from City Snowlowry. We are talking here about Black Bar, which is one of the best “loans” on the market . The card is deprived of one of the most annoying fees, i.e. the annual fee for using the card . If you use it, the bank will give you a voucher for PLN 300 to one of the most popular fitness networks in Poland WideFit.

If you think that using a credit card you will lose more than you gain, you are wrong. No annual fee alone, compared to other offers, saves up to several hundred zlotys a year! Added to this is one of the longest interest-free periods on the market, lasting up to 56 days for all non-cash transactions.

Having a Black Bar credit card, you will be able to use a special installment program, thanks to which you will spread each transaction into installments, or you will get additional cash for any purpose. However, this is not the end of the benefits. The Black Bar card is free of charges for SMS notifications, as well as fees for notifications of defaults.


Three steps to good form and a credit card                                             

Three steps to good form and a credit card                                             

To take advantage of the promotion, thanks to which you will get one of the best credit cards on the market and a gym voucher, all you have to do is go through 3 simple steps.

  1. Complete a simple form and wait for a response from a bank adviser.
  2. After receiving the credit card, log in to CitiBank Online no later than two months after signing the contract.
  3. Make a min. 5 transactions in the first and second month of concluding the card agreement. The next month you will receive a voucher. It’s really easy!


What can you do with the 300 PLN voucher for WideFit?

credit loan

It’s really up to you what you do with the voucher you receive. You can spend it on a several-month gym pass to the WideFit network for yourself or your loved ones. However, this is not the end. You can use the e-bon in the WideFit online store, where you will find a whole bunch of dietary supplements and nutrients that will allow you to keep fit.

Thanks to the voucher, you can also buy various types of training accessories, such as dumbbells, sports bags, or recently popular massage rollers. Keeping in shape with a City Simplicity credit card has never been easier and more enjoyable.


Who can take advantage of the promotion?

Who can take advantage of the promotion?

To take advantage of the promotion, you must be an adult who can boast a stable income of at least PLN 1,200. On the day the contract is signed, you must be employed at your current workplace for at least 3 months. After completing the simple form, a bank adviser will ask you to send a scan of your account statement or other document that certifies your regular income.

Interestingly, companies can also take advantage of the promotion. If you run a business, you must meet similar conditions as for individuals. The promotion is intended for people running the company for at least 2 years who have a monthly income of at least PLN 2,500 net. Remember that the decision to grant a credit card, regardless of whether you are a private individual or run a business, depends on a positive assessment of your creditworthiness.


Disposition Credit

credit problem

With a disposition credit, which is also known to many as an overdraft facility or, in short, a disposition, the account-managing bank grants the customer a credit line in connection with the management of the checking account. This credit line may be used by the customer as required. An overdraft facility is intended to bridge short-term financial bottlenecks. It is not a loan that is suitable for major purchases and certainly not to cover the running costs of living.


Who will be set up a disposition credit

Who will be set up a disposition credit

Disposition loans are now generally relatively generous, and often without the fact that the customer must apply for it extra, with regular salary received automatically. With the dispensary, which, if used regularly, is a fairly expensive loan, the banks earn a lot of money without much effort. With regular salary or other income of a regular nature, such as a pension and a faultless Schufa information, it is not a problem to be granted a discretionary loan from his bank.

How high the credit line is then determined by the income. Two or three net monthly salaries or pensions are usual. Customers who have been with the bank for a long time and may have credit balances on other accounts also get a significantly higher credit line if they wish. Further collateral does not demand the bank. Usually the disposition credit is established indefinitely. The amount of interest is variable. Theoretically, they can change daily according to the conditions on the financial market.


Dangers for consumers when using the Dispos

borrow money

Anyone who uses his discretionary credit constantly, partly disputes the cost of living and makes regular purchases, not only has to reckon with high costs for the accrued interest, but also runs the risk that the dispo can never be compensated. This is what consumers call colloquial dispo trays. In addition, the bank will then have the right to terminate the system without notice if the credit line is regularly overdrawn or to reduce the credit line if the income changes.

In this case, the bank will pay the debit amount immediately. If the account holder can not compensate the dispo, it may threaten to terminate the current account, which then entails a negative Schufa information.


Use the Dispo correctly

Use the Dispo correctly

The dispo should always be used only if short-term liquidity bottlenecks are to be bridged. For example, if the repair of the car is more expensive than expected. A down payment is due on the booked holiday trip, and the holiday pay is paid in two months or pay an invoice is urgently pay.

A rule of thumb is that the discretionary credit is always the right choice if a customer is able to rebalance the account within three months.


Interest for the Dispo

Interest for the Dispo

Each account holder using his / her Dispo is obliged to pay interest to the Bank. The interest rates for disposition loans are extremely high for some banks, which consumer advocates regularly criticize so far unsuccessfully. Once a quarter, the customer gets the interest charged.

If the repayment credit is used regularly, it may make sense to change the bank if the discretionary interest is too high. There are providers that charge just under eight percent, which is relatively cheap and there are banks that charge their customers 13 percent interest or more.

Anyone who as an account holder constantly uses his dispoise and can not manage to repatriate it for many months should, as an alternative, think about an installment loan in order to make up for the MRP. If at the same time credit is available on a call money account, this balance should be cleared for the dispatching. Credit interest is always lower than debit interest, so the bottom line, the balance of the balance is more appropriate.


The exaggerated dispatching becomes really expensive

The exaggerated dispatching becomes really expensive

Anyone who has to cover the credit line granted to him by the bank should inform the bank accordingly. However, authorized and unauthorized overdrafts of the credit line are really expensive and, in individual cases, may also lead to the cancellation of the loan or current account if the account is not cleared.


Alternatives to the dispo

credit loan

A good alternative are call-off loans, which unfortunately are not available at many providers yet. Call-off loans are also credit facilities with a corresponding credit line, but these are not linked to the management of the current account at the bank. The interest rates for call-off loans are significantly lower, so that savings can be made with regular use.



All you need to know about your loan before buying your first property. Amaryllis gives you the smart advice to carry out your operation in the best conditions.


Financial envelope

Before signing a sales agreement, evaluate your borrowing capacity. This will allow you to direct your search for good in the price range corresponding to your purchasing power.


Personal contribution

Financial envelope

Ideally, do you make a minimum contribution to pay the notary fees is 7% of the purchase price in the old and 2.5% in the new. Indeed, fewer and fewer banks agree to finance loan files in 110%, without any personal contribution.


Information on the loans granted :

  • If you buy in the new, inquire about the possibility of taking out a 0% rate loan and / or a 92 loan if you buy in the Hauts-de-Seine.
  • If you live and buy in PARIS, examine your right to Paris Housing Loan.
  • If you buy your principal residence, and your employer is contributing to an employer loan organization, you may be eligible for a 1% loan.
  • If you are eligible for APLs, remember to find out about the PAS loan that will give you access to these aids that will be deducted from your loan maturity.


Optimize your loan setup:

Information on the loans granted :

Mixed rate loan

Mixed rate loan

 This type of loan is fixed for a given period (5, 7, 10 or 15 years), then revisable afterwards, most often capped 2. The customer then benefits from a lower rate that allows him to shorten the duration of his loan. This loan avoids the risk of a rise in the interest rate during the first years, years during which the interest to be repaid is the highest. This formula is very interesting for first-time buyers who have a high probability of selling their property before 7 years.

Evolutionary Loan

Evolutionary Loan

Some banks offer a so-called “scalable” loan which is fixed rate for the duration of the loan, but which is accompanied by an automatic maturity adjustment of 1% per annum. As a result, the initial monthly payment, from which the debt ratio is calculated, is lower, which makes it possible to borrow more or reduce the duration of the loan.


Opt for insurance delegation

Opt for insurance delegation

By negotiating a delegation of insurance, you can save up to 60% * on the total cost of loan insurance, and benefit from a powerful insurance solution, even in specific cases of aggravated risks, such as the practice of a dangerous sport or a profession at risk.


Know how to sell your strengths

Know how to sell your strengths

you do not have a big income or your financial income is irregular? Insist on your young age, your strong professional potential, the stability of your complementary income, the seniority with your employer, or a reduction in your fixed costs in the years to come. A proven savings capacity will undoubtedly be an asset: reserving a sum of money every month to your savings can only reassure the banker of your ability to cope with some financial pressure. He will prefer a low-income client with the ability to save rather than a high-income client but no savings effort.