How much do you have to earn to get a cash loan?

The amount of income of the person applying for a cash loan has a decisive influence on the bank’s credit decision. It is worth knowing how much you really need to earn to make it positive.

It is worth noting that the growing sales in terms of value was due to increased interest in medium- and high-value loans. The Retrodatabase study shows that in the first half of 2019, the dynamics of the increase in the number of consumer commitments granted in the amount of 15 to 50 thousand USD 7%, from 50 to 100 thousand USD 15%, and above 100,000 USD 11%. The obvious conclusion is that there is a relationship between the amount of income and the creditworthiness of customers and the amounts of liabilities actually incurred by them. In other words, Poles earn more and more, which is why they can count on increasing cash and installment loans.

Income and chances of getting a cash loan

Income and chances of getting a cash loan

After receiving an application for a cash loan, bank analysts proceed to assess the customer’s creditworthiness, i.e. analyze the maximum loan amount he will be able to repay. The most important factor they take into account at that time is his earnings – as a rule, the higher they are, the more he can borrow the sum.

What is important, however, is not only the amount, but also the “quality” of the client’s income, including the legal form of employment and seniority of the current employer. Based on this information, analysts can see if income is stable and regular, and what are the chances of it being maintained during the repayment period.

Banks like clients with an indefinite employment contract the most, but entrepreneurs or employees working under civil law contracts are not in a lost position. Lenders take into account any regular, documented income, but the fact is that some sources of earnings are discriminated against in some ways. For example, in the case of specific work contracts, they usually reduce their income by tax deductible costs (i.e. by 20 or 50%), while for flat-rate activities by up to 60%.

Impact of expenses and other obligations on the credit decision

Impact of expenses and other obligations on the credit decision

A cash loan can be obtained by a client who earns enough to be able to cope with current expenses as well as monthly repayment. Therefore, it is important for the bank not only how much he earns but also how much he spends. By comparing the client’s monthly income and costs, he can find out what amount is at his disposal.

In the case of cash loans, banks do not, as a rule, review clients’ expenses in detail, but are based on average data provided by the Central Statistical Office. At the same time, they focus on the most important cost category, i.e. expenses related to maintenance: for the purposes of calculating creditworthiness, they assume that in single-person households they amount to about 1000-1300 USD, and each subsequent household raises their amount by about 800-1000 USD.

Under this approach, a self -supporting single with a net earnings of USD 2,000, net of costs, has a maximum of around USD 1,000 available. This amount must be sufficient for him to repay the cash loan installments and to pay all other expenses.

It should be emphasized that the bank always checks the database of the Credit Information Bureau, where it checks the current state of the applicant’s debt. If he finds out that he repays a loan, a revolving limit or an installment purchase, he will reduce his creditworthiness proportionally. A large number of high obligations does not have to result in the rejection of the application, but only if the client has a sufficiently high income.

What else does creditworthiness depend on?

What else does creditworthiness depend on?

The Retrodatabase database also verifies information about previous customer commitments. Thanks to them and the data collected by economic information bureaus, the bank can assess the payment reliability of a given applicant, and thus the risk of lending funds to him. If he has relatively high income, but at the same time has some negative entries in the Retrodatabase or BIG, his loan application will most likely be rejected.

In addition to these factors, the customer’s creditworthiness depends on several other issues. Some of them have more or less influence, but there are also some that are completely independent of it. The latter include, among others: the amount of current interest rates, bank margin, or the algorithm used by the bank to calculate creditworthiness.

However, more important are the elements concerning the applicant, i.e. his marital status, age, education or occupation. On their basis the bank calculates the so-called credit scoring – assessment of customer credibility, which affects the credit decision, and often also the credit terms.

In practice, next to the client’s financial standing and credit history, the parameters of the potential loan: the amount and repayment date have the greatest impact on the bank’s decision. This is due to the fact that they determine the amount of loan installments, on the basis of which creditworthiness is calculated. The lower the amount of the commitment and the longer its repayment period, the lower the monthly installment, and thus the greater the chance of a positive response.

How much cash loan can you get?

How much cash loan can you get?

Only a few years ago, when calculating creditworthiness, banks had to comply with the restrictive recommendations of Recommendation T of the Polish Financial Supervision Authority. Its provisions assumed that the ratio of the sum of the borrower’s liabilities to his net income (the so-called DTI ratio) cannot be higher than 50 or 65% (with earnings above the national average). Today, every lender has complete freedom in determining the level of this indicator that is acceptable to them, and at the same time sets the rules for calculating creditworthiness. Therefore, individual banks may offer completely different amounts of cash loans to the same customer.

Banks use different algorithms for calculating creditworthiness, but for each of them the most important criterion for assessing the application is the amount and source of the client’s earnings, as well as their liabilities. If he earns around USD 2,000 net and does not repay any other loans, any bank will be willing to borrow at least several thousand, and with a sufficiently long repayment period, even several thousand zlotys. However, it should be remembered that each case is considered individually, and the lender also analyzes other, previously mentioned factors.

It is worth knowing that the amount of cash loans can be up to USD 255,550 (this limit is imposed by the Consumer Credit Act), with the banks themselves most often applying an upper limit of USD 150,000 or USD 200,000. To be able to borrow such a large amount, you do not have to earn several thousand zlotys a month. In fact, assuming a 10-year loan period and 10% interest rate on loans, the highest possible loan amount is likely to be obtained by a childless couple with incomes around the national average.

What else is worth knowing?

What else is worth knowing?

Pursuant to the provisions, if a client applies for a relatively small cash loan (up to 4 times the national average) or has been cooperating with the bank in which he is applying for funding for at least 6 months, a simplified application examination procedure is used. In this case, the lender verifies only basic information about it, such as the amount and source of earnings and the credit history. Thanks to this, he can immediately get a credit response and the amount of funds due.

Loan for individual entrepreneurs. Concepts, types and functions

Loans have long entered our lives and are very popular not only among ordinary people, but also among individual entrepreneurs and organizations. Entrepreneurs have recently shown the greatest demand for them.

The fact is that a loan for individual entrepreneurs is a special type of loan that can be issued either to open your business or to expand it. Their main distinguishing feature is the reduced rate on it, as well as the possibility of getting more money for a longer period (as opposed to individuals).

Today, all loans to entrepreneurs are divided into two categories. The first of these are issued for starting a business. The second – to expand the existing business. The first loan for individual entrepreneurs is issued by those entrepreneurs who want to start a business. It should be noted here that a small number of banks issue loans to start-up entrepreneurs.

 

Loans to entrepreneurs

Loans to entrepreneurs

This is due to the fact that at present more than half of all start-up entrepreneurs fail in the first two years, which means that they are losing their ability to repay debt. To obtain such a loan, you must submit documents listed in the bank. The business plan is a mandatory document.

The second type of loan is intended for those who are already doing business, but want to expand the scope of their activities. This type of loan is issued by a much larger number of banks. This loan for individual entrepreneurs make much easier than the first. However, it should be borne in mind that it is an objective and will have to report for the money received. This loan is issued for the following purposes: to increase the volume of current current assets, to purchase materials and various raw materials for commercial expansion and to increase profits, as well as to acquire various assets.

 

Loans to start-ups

Loans to start-ups

It should be noted that to obtain such a result credit without a business plan is not possible. After all, it is in this document that the borrower must not only indicate the objectives of the loan, but also to prove, with the help of calculations, the rationality of their acquisition.

But despite the fact that the loan is for individual entrepreneurs it is very popular that such a loan is made under a program to help small businesses, getting such a loan is not so easy and simple. The fact is that many banks are simply afraid to carry this type of loan because of the high probability of not getting back the money. Therefore, many entrepreneurs cannot continue in active business because of lack of funds or lack of necessary collateral. Many entrepreneurs are therefore forced to either trade or seek alternative sources of funding.

Avoid 6 mistakes when refinancing a building savings loan

If there are offers with lower interest rates to repay the loan, as it is now, it is obvious to look for refinancing of the building savings loan. Why? Building savings loans have the same interest rate throughout the loan repayment period (unlike mortgages with a period of approximately 5 years fixed interest), usually around 5% (mortgage interest rates are lower). But even in refinancing the loan you may come across , so avoid the following 6 mistakes.

 

1. Refinance in the bridging period

1. Refinance in the bridging period

Without at least two years of building savings, reaching at least 40% of the target amount and reaching the required rating number, you are in a bridging loan that is not very convenient for larger loans. Before paying off the loan at all, you pay interest on the target amount, you grow up and you do not actually die. The interest rates are between approximately 4.5 and 7%. If you want to switch to refinancing at this stage, you will also have high fees or penalties – the bridging period is fixed – and complicated refinancing conditions to limit the outflow of clients from building society loan providers. Therefore, it is sometimes better to wait for the refinancing of the loan until the bridging period is over. Or check that you have no fixation in the loan agreement agreed for the bridging loan phase – which, as with a mortgage, gives you the option of early repayment without penalties at the fixation date.

 

2. Unpredictable mortgage interest

This is not the fault of the payer of the loan, but rather a statement about the market situation. Although the current situation in the mortgage market is very good and mortgages with interest rates of around 3 to 5% are on offer, no one will guarantee that further developments will not have an upward trend. On the other hand, the building savings loan has the advantage that its interest rate remains the same throughout the loan repayment period . Therefore, it is worthwhile to consider and refine the market and your own wallets when considering refinancing.

 

3. You do not work with complete information

Yes, it is difficult to understand the offers of individual banks. But if you do not have complete information from everyone, it is difficult to compare it successfully. Do not be afraid to look for the information you are missing in the proposal and then ask your bank to add it.

 

4. You are putting aside home furnishings

financial loan

When refinancing a building savings loan, the loan can be increased and the given amount used, for example, for other household equipment. If you know you need to replace windows or finally buy a new kitchen, consider incorporating these costs into one contract.

 

5. You are a decision, but you forget to take all documents to the bank

bank loan

If you decide to transfer the loan to another bank, you need to have all the final building inspections (those that were secured in the original loan) and the current address of your permanent residence registered at the cadastral office. If you also want to change the property insurance, check the current risk assessment (eg floods) to see if the property is newly included in the more expensive zone.

 

6. You do not count all the costs

Only after you have calculated all the additional costs do you have to answer the question whether refinancing the loan is still beneficial for you. In addition to the account maintenance fee, there are other fees that the bank requires when handling a mortgage: a loan processing fee or a new estimate fee. In addition, your original building society may charge a fee for issuing a quantification on a specific date and an early repayment fee in the bridging period. You will pay a thousand dollars for the entry of a new contract into the Land Registry .  

What are the elements, other than income or expenses, which are taken into account for the assessment of a tenant credit refinancing file?

The calculation of charges and income is used to determine the debt before and after restructuring the home.

But if debt remains an essential element in the assessment of a loan file, other criteria are important:

But if debt remains an essential element in the assessment of a loan file, other criteria are important:

The “remaining to live”, or family quotient, which is the difference between the cumulative of your income and the cumulative of your expenses (that is to say what you have at the end of the month to live). 

The good management of your bank accounts and the absence of expenses that are too regular could suggest that there is an addiction to games of chance for example.

The credit repurchase institution assesses a repurchase file as a whole. This means that none of the criteria cited above justifies an agreement or refusal of a loan. The supporting documents for a credit file must correspond to all the criteria and are analyzed as a whole, the decision of the credit institution is made on the whole of the file and not on a few points taken separately.

How does the tenant loan buy-back work?

When a tenant can no longer make ends meet or their living space is too low, they can look for a bank to buy their consumer loans. This operation is intended for borrowers who have subscribed to at least 2 consumer loans and who rent their main residence or who are hosted by their families. It consists of combining several bank loans into one in order to benefit from a reduction in monthly payments. The reduction of the amount of the single monthly payment can reach 60%.

The credits that can be grouped are as follows: revolving loans, assigned credits, personal loans, work loans as well as bank overdrafts, unpaid rents, family debts, unpaid taxes. In some cases, this assembly can relate to the financing of secondary residence.

This operation, which can be carried out by a bank, a credit institution or a broker, allows you to benefit from a single loan granted at a fixed rate over a longer period. Revolving loans at the adjustable rate will thus be transformed into a fixed rate. The total amount of debt that can be grouped is limited to 100,000 USD. This amount will be reimbursed over a period of 10 years. This type of transaction does not require a bond or mortgage guarantee.

This arrangement, which simplifies the management of its budget, does not require a change of direct debit. The bank can also agree to grant an additional amount called “cash” as part of this operation if the borrower is eligible for this additional loan. This optional envelope is integrated into the total cost of the operation and therefore benefits from the same renegotiated rate for the repurchase of tenant loans.

Just like other conventional loans, the borrower must provide a certain number of files when setting up this operation, here is the list:

  • double-sided copy of the subscriber’s CIN or passport as well as his family book
  • copy of marriage certificate or divorce decree
  • documents justifying direct debit (telephone or electricity bill)
  • photocopy of the rent receipt and the housing tax
  • RIB and its last three pay slips as well as bank statements for the last three months
  • copy of the last tax notice
  • copy of the loan amortization schedule and a document showing the principal owed

If the redemption candidate wishes to obtain this debt consolidation quickly or if he wishes to maximize his gain with this operation, he will do better to call on a broker who helps him find the most affordable interest rate while negotiating the other elements of the redemption. Note that the assistance of a broker pays only if the borrower finds satisfactory the loan repurchase offer that he has found for him and that he signs it. This signature of the buyout proposal allows the effective implementation of the transaction.

What to do in the case of a tenant with a FICP file or who is highly over-indebted?

What to do in the case of a tenant with a FICP file or who is highly over-indebted?

Some candidates for this operation are victims of a hazard in life which affects their ability to repay. This prevents them from honoring their monthly payments over time. Difficult ends of the month and rejection of direct debits can then go as far as FICP filing or an explosion in their debt ratio.

Before knocking on the door of the Cream Bank to file an over-indebtedness file, these borrowers can use the simulation tool on our site. We study all profiles and under certain conditions, this type of borrower can claim the repurchase of tenant credit.

Credit for young families.

Loan for young families can help to cope with the costs

Loan for young families can help to cope with the costs

Unfortunately, young families do not only enjoy happiness. With the offspring, the expenses also come to the new parents. The joy of the offspring is limitless and the proud parents want to put the world at their children’s feet and fulfill all their wishes. How difficult it is often to look no further than to look into the bright eyes of a child. But nothing is as constant as the change in childhood. If the family’s budget has just recovered from spending on baby equipment, the purchase of a children’s room must already be considered and planned.

In addition, the children are constantly growing out of their favorite clothes and, incidentally, the desires for toys and more are immeasurable. But it is not only for the children themselves that expenditure is increasing more and more . When starting a family, parents also face decisions that involve some costs. It is not uncommon for the offspring to buy a family-friendly car. New and above all larger household appliances such as refrigerators, washing machines and tumble dryers are often required.

Sometimes the enlargement of the family even requires more space. Then only a move to a larger apartment helps, which means additional costs for the young family. Since these expenses often do not go hand in hand with the right budget, in most cases only a loan for young families can help to cope with the costs.

In principle, children are no obstacle to a loan.

In principle, children are no obstacle to a loan.

As with any other loan request, a lender assesses the applicant’s creditworthiness when it comes to a loan for young families based on their financial and income situation. It is therefore no longer a hindrance to the credit prospects of a young family if one parent takes care of the household and raising children at home, while the other parent is responsible for the livelihood of the entire family. If the working parent’s income is sufficient to service the loan, there is nothing standing in the way of a loan for young families.

Like any other non-earmarked loan, a loan for young families is issued by the house bank or a direct bank from the Internet. The individual loans differ according to the loan amount, the term and the interest rate requested by the lender. The lender sets the interest rate taking into account the creditworthiness of the applicant. The current financial needs of the young family is the most important factor influencing the loan amount applied for. The maximum possible monthly charge from the loan repayment rate has a significant impact on the term of the loan. On the one hand, every applicant wants to repay the loan as quickly as possible in order to avoid unnecessary costs due to interest, on the other hand, the amount of the installment must not be so high that the family’s remaining budget is insufficient until the end of the month.

As unexpected costs often arise, especially for young families, the term of the loan applied for should not be underestimated for safety reasons. Additional collateral for the lender, such as grandparents as guarantors, can result in the required interest rate falling and a longer loan term becoming possible. This option can provide considerable relief, especially for families with relatively low incomes.

What happens if you do not pay the loan?

The credit system is now fairly well developed and deserves popularity both among the population and among organizations. The financial loan system, developed by banking experts, covers almost all the problems that arise in this service market. Currently, a wide range of different programs are offered: consumer, mortgage, education and many more.

 

What happens if you do not pay the loan and break the agreement with the bank?

debt problem

What measures will the bank take and how soon will it happen? Will this result in termination of the contract or loss of security? What are the real consequences if you don’t pay your monthly installments on time? We will try to consider the possibilities of developing these situations.

Failure to pay loans, unfortunately, just a common phenomenon. This happens for various reasons: the borrower did not get into the money or just forgot to transfer the necessary amount in time to the bank. Errors could have been caused by the erroneous transfer of money by inactivity or the debtor deliberately decided to break the contract with the bank. Each case is considered in terms of the contract concluded with the bank. It clearly sets out what happens if you do not pay the loan. The measures taken by the Bank in relation to defaulters are also the result of a contract.

 

Bank knows exactly what will happen

If it does not pay the loan and usually provides a repayment guarantee. Most often a deposit is required, which is open in the same bank. Either it can be a reimbursement or the debtor’s real estate guarantee. For organizations that purchase equipment through a bank, the technique itself can be a mortgage for the loan. There are contracts that are compiled so that, in the event of a refusal to pay money, the bank claims the co-owners or guarantors of the loan.

It turned out that you cannot return funds, but in return you lose some property – this is the only sure way to legally not pay the loan.

But if you have a temporary financial problem, a real opportunity to get a deferred payment. For example, you can make a written request to your bank manager to request a change in the loan repayment terms, stating the reasons why it cannot be repaid on time. The decision will depend on the bank’s policy towards defaulters.

If you really do not have the opportunity to pay the loan in the distant future, then we must act by law. If the amount of the debt exceeds the total cost of collateral, the bank will file a claim for damages and try to delay the process as long as possible to obtain as much interest as possible. However, too much consideration of the claim is not included in your bank’s plans, as all your financial claims will be terminated after three years.

 

Try to make monthly amounts equal to your income

Try to make monthly amounts equal to your income

For the court and the bank it is important that you refuse to pay but simply cannot. Now the court will decide what happens if you do not pay the loan.

Keep official correspondence if there is a need to discuss a statement of claim. Don’t worry about collectors, as much as they can – it’s boring on your phone that you can simply turn it off. If you do not have the property for which you are registered and have nothing to judge, just wait for the court’s decision.

If I can’t pay the loan, what do I do? Credit holidays. Insolvency (Bankruptcy) Act

The credit market in the Russian Federation is constantly growing. Along with this, the number of overdue loans is increasing. The greater the amount of credit and the longer the delay, the greater the burden on the client. It turned out a vicious circle. If the client did not pay the loan for a long time, they sued him. Without a good reason, postponing your position will be very difficult. How to get out of debt hole?

 

A note for the novice

money loans

When a person applies for a loan in 2007, the bank roughly represents the sources from which to repay the debt: salaries, pensions, deferred funds. However, unforeseen situations may occur in each. In order to prevent the loan from becoming a burden, certain measures need to be taken in advance. Otherwise, you have to ask your brain to find the answer to the question: “If I cannot repay the loan, what should I do?” What can I recommend in this situation? 

First, remember the debt. Although collectors still do not ring at the door, the bank still charges interest and penalties. Credit history is deteriorating.

Second, do not avoid contact with bank employees. Otherwise you will quickly fall into the category of cheaters, and will not be reputable customers.

Third, try not to panic. Yes, the situation is not pleasant if the bank’s employees threaten the court. Credit debt is a financial problem. In such a situation you definitely do not need to get a new loan to repay the old. It is necessary to focus on dealing with the bank and try not to bring the case to court.

 

How to build dialogue?

The bank offers

If the problem of debt repayment is temporary and is linked to a change in work, it is better to agree on a new payment schedule. Read more about how to take a credit holiday, read on.

If the financial problem is not resolved quickly, you must ask the bank to review the terms of the contract and to provide evidence of insolvency (medical report, birth certificate, death certificate, etc.). You will also have to explain to the bank where the money comes from. First, it is better to request a delay of 2-3 months. A loyal bank does not even have to charge interest if it is convinced of the client’s good faith. In case of violation of the terms of the agreement on new concessions by the bank, you may forget.

 

Restructuring

Consumer Loan “Comfortable”

If I cannot repay the loan, what should I do? You can try to agree on debt restructuring, ie “Loading” the terms of the loan. The principle of operation is exactly the same. It is necessary to prove to the bank the fact of insolvency for good reasons, to explain where the money will arrive on time. The credit institution shall have an interest in recovering the funds. If the bank realizes that it is dealing with the customer in good faith, it will reduce the amount of the payment and extend the term of the contract.

The outcome of the restructuring largely depends on the customer’s reputation and common sense. Consumer loan of 20 thousand rubles. extended by 3 years does not work. Especially if it is known that the source of funds will be a new loan.

 

Credit holiday

Cash withdrawal

If I cannot repay the loan, what should I do? One solution to the problem may be the proposal for a ‘credit holiday’. What is it? There is no official interpretation of the term in any legislative act, but banks often use it to communicate with clients. Credit holidays are deferred loan repayments, revision of repayment schedule. The service is provided only for long-term loans (mortgages and car loans). The Bankruptcy Act provides for two options for “credit holidays”. Each has its own characteristics.

Full deferral of the loan repayment without change in the duration of the contract is granted once for the entire period of use of the loan and most often on a paid basis. The basis of such a ‘holiday’ should be a good reason to demonstrate: poor health, dismissal, etc.

It is preferable for the bank to provide the customer with a partial delay in the repayment of the credit authority, but subject to the timely payment of interest on the loan. The service may be provided twice during the term of the contract, but no later than 3 months after its conclusion. As interest accounts for most of the payment, the payment itself is slightly reduced. If the loan period is not extended, the monthly payment is increased at the end of the ‘vacation’. In any case, the total overpayment under contract increases.

 

How to apply for rest?

Benefits of consumer loans

Lenders provides credit holidays to obtain evidence of financial distress. Some organizations provide this service at the client’s request, but on a fee basis. How to get a credit holiday at Lenders?It is necessary to collect and provide documents to the credit officer confirming the difficult financial situation, to write a request for deferred payment. After a positive decision you have to sign another agreement to change the terms of the loan.

Holidays can be a temporary solution to the problems. If you took out a loan, you cannot repay the debt on time. However, the conditions for the provision of services need to be studied in detail so that they do not fall into new slavery.

 

Debt

If I cannot repay the loan, what should I do? The first step is to calm down and get in touch with the bank yourself.

If there are lots of loans, you have to collect them in one, pay off your debts once a month and not collect fines. The debt may be consolidated in another credit institution.However, the new lender will require a larger package of documents and a fee for this service.

Do not confuse refinancing and receiving a new cash loan. The first service is provided to reduce the credit burden.The client receives a new loan for repayment of old debts.

The Bankruptcy Act provides that collateral can be sold. It is better if the borrower takes such a step voluntarily.Otherwise, the bank will sell the property at half the market price.

The credit must be notified in advance to the institution for the sale of collateral. If trust in the client is compromised, the bank will send a representative to complete the transaction. There’s nothing wrong with that. The credit institution wishes to solve this problem. The expert will help you find the buyer and compile the documents for the transaction.

 

I do not pay loans: consequences

Cons Consumer Loans

Credit debt is a financial problem. It is difficult to solve, but it is possible. The main thing is not to give up. What happens if you don’t pay the loan at all?

Debt accumulates like a snowball. Sooner or later, interest, penalties and loan body will exceed the annual income. Such debt will have to be repaid before old age.

Sooner or later the bank will contact. Call center staff first, then professionals. Their goal is to pay off the debt. Collectors use more aggressive methods at work: call guarantors, work, leave messages to friends on social networks.

What happens if you don’t pay the loan at all? Sooner or later the case will go to court. If an amicable agreement is not resolved, there are no good reasons to postpone debt, then there is no point in fighting lawyers in court. All costs will be borne by the defendant. After the court decides, the lawyers describe the property and put it up for sale.

 

Exam

Another thing if the cause is respectful debt. If you have a medical report on ill health or a copy of the reduction order in your hands, you can and should defend your rights from the banks. If the credit institution fails to take these documents into account, it is better to go to court itself. The relevant lawyer will help to challenge the bank’s claims. There’s something to complain about. Insurance is imposed, fines are distorted and errors in documents. You must be patient in order to defend your rights in court. The court may reduce the amount due by 50% and require the defendant to provide more than 20% of the monthly income to repay the debt.