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Reasons for credit rejection

When you get a loan or a plastic, it is because you have surely kept an eye on your financial situation. However, when it is not approved it is difficult to recognize what was the reason why a positive response was not obtained. That’s why today we will tell you about

Bad behavior in credit history

Bad behavior in credit history

Stop paying, have recurring delays and only deposit the minimums contribute to your history being classified as deficient or bad. So try to keep track of your finances, specifically with your debts.

Relevant credit score

So that your Score is relevant, in addition to having a good behavior, try to use it for important purchases, but that you can pay without problems. Remember that it is a score or rating that is constantly updated and summarizes the behavior we have with our cards or loans. The higher the number of points earned, the better your relationship with the credits. Being in a range equal to or less than 640, is one of the most frequent reasons for rejection. If you are late, it is best to contact debt experts.

Debts exceed your ability to pay

Debts exceed your ability to pay

When you spend more than you can, it is possible to put your own financial stability at risk is not favorable for you or for financial institutions. Remember that they always worry about making sure that the borrower does pay the requested amount and in full.

Not having the amount of income required

Remember that to access certain types of credits it is necessary to meet requirements and among them is how much money goes into your pocket. The objective is to verify that you can pay off future debts.

You do not have seniority

If you have just entered a new job, it is better to wait at least 6 months to apply for a loan. This is another factor that helps prove that your financial stability is strong.

You do not have the age to acquire a loan

You do not have the age to acquire a loan

If you are under 18, your request is likely to be rejected. Although there are exceptions, since there are cards that are exclusive to students or if you already have a job.

You did not fill out the credit application correctly

If at the time of applying to obtain a credit you forgot to place important information or you simply did not take care in doing so and the data was misplaced. Then it will be very likely to be rejected. Always verify that everything you are placing is correct and if it is filled with block letters, that it is legible. Fortunately when you apply for a credit online, the forms tell you when something is wrong or missing.

How to Build a positive credit history?

The value of loans for the first half of 2019 exceeded USD 3.8 billion, the number of clients of companies granting loans is also growing. Why do we decide on debt and if and how we pay it back, the leader of consumer loans Good Credit loans checked for the second time.

How many people still don’t read contracts?

How many people still don

Do we prefer to borrow from the family or in specialized companies? What are the most common goals for us? The Index Good Credit practices answers these and other questions about the motives for incurring and repaying Poles’ financial obligations. Build a positive credit history.

” The second edition of opinion poll conducted by Biostat shows changes in consumer behavior conditioned by awareness, needs and development of loan tools. Many index partners, including the Conference of Financial Enterprises, Polish Association of Loan Institutions, have engaged in substantive support and dissemination of the topic.

The survey diagnoses the level of Poles’ awareness about paying bills, fees and planning expenses from the family budget. The report presents 5 strategic areas that answer questions about the behavior of borrowers:

  1. Budget planning – what are we ready to take out a loan for, and what expenses do we finance from savings?
  2. Repayment – how do we prioritize expenses?
  3. Financial problems – to whom do we go for the necessary financial injection?
  4. Debt – why do we need reminder about arrears and are we aware of the consequences of late repayments of installments
  5. Awareness – what are we most afraid of taking loans?

Due to the gender division

bank

We learned some interesting facts about the credit preferences of women and men. The former will take out a loan to improve housing conditions. Therefore, more often than men, they will take out a loan for the purchase of refurbishment and retrofitting a house or apartment. Men would rather spend extra money on electronic equipment or a car. Women are also more afraid of taking out a loan – 58.2% have compared to 51.6% men.

Compared to the previous survey, one can notice an increase in the number of Poles who are more willing to borrow money for holidays, renovation of apartments or electronic equipment than for expenses related to the car or apartment.

This means that Poles are increasingly trusting the offer of non-bank companies, and they do not take out loans only in the event of an urgent necessity (renovation of a flat, car repair), but they also give themselves little pleasure.

Based on the collected Good Credit data,

Based on the collected Good Credit data,

Loans build awareness of budget organization and the consequences of late installments. We are pleased that Poles’ knowledge of financial management and timely payment of obligations is becoming more and more favorable. Therefore, thanks to planned activities supporting Index Good Credit practices and the commitment of our Partners, we want to educate our clients by showing them the importance of building a positive credit history in life – says Monika, Communications & PR Manager in Good Credit loans.

Interestingly, Poles are more afraid of hidden fees and high costs of borrowings than the inability to pay their debts, with only 55% of clients declaring that they read contracts carefully.

That is why Good Credit loans are running an educational campaign on private finance for the second year in a row.

Reasonable financial management, settlement of obligations and skilful saving for many Poles is a challenge. A large group of this year’s Research Partners motivates us and confirms our belief that “Index Good Credit practices.

The Forward Loan – What Is It Exactly?

Follow-up financing poses a financial risk that should not be underestimated for both property buyers and builders. Because: If the interest rate increases during the fixed interest period, the entire construction financing may become drastically more expensive.

This risk can only be contained with a repayment loan. This means that the borrower pays off the entire loan during the fixed interest period. However, this option is usually only suitable for borrowers if they have a correspondingly high income. Here, the forward loan is a cheap alternative. In the following guide we will introduce you to what it is and how it works.

The Forward Loan – What Is It Exactly?

The Forward Loan - What Is It Exactly?

Forward loans can only be used to carry out follow-up financing after construction financing. This means that as a borrower you have to have completed real estate financing in order to apply for a forward loan from a bank. Until a few years ago, only non-profit or municipal housing associations were entitled to such a loan – today, however, more and more private borrowers are turning to the offer for such a loan.

The basic principle of a forward loan is primarily based on being able to conclude new loan agreements before the end of the fixed interest period – this is how you can secure particularly favorable interest rates in the future. Strictly speaking, a forward loan is nothing more than an ordinary annuity loan, the rate of which is always the same.

The special thing about it, however, is that the payment date for the loan can be moved backwards. In this phase, the borrower does not have to pay any installments and there is no lending interest from the lender. For this reason, you should let the lender make a non-binding offer in advance.

Never without comparison: This is how the forward loan works in detail

Never without comparison: This is how the forward loan works in detail

A forward loan enables borrowers to benefit from favorable interest rates even during the phase in which real estate financing is still within the fixed interest period for a few years. The situation is different with normal follow-up financing, which can only be concluded about 6 to 12 months before the end of the fixed interest period.

Depending on the conditions of the lender, this may result in expensive commitment interest for the borrower, although this is not the rule. The disadvantage is clear that a subsequent loan cannot be planned in the long term, but always only before the end of the fixed interest period.

Here you have a decisive advantage with the forward loan: The borrower has the opportunity to secure himself favorable interest rates for the future many years before the end of the fixed interest period. Financial experts also refer to this period as the so-called forward phase. The interest rates that accrue for follow-up financing correspond to those for a forward loan at the time the contract was concluded.

The lender may add additional interest depending on the lead time. This approach is basically only fair, because if interest rates increase drastically, the lender may have to forego a high return through an inexpensive forward loan. However, the lender benefits from good conditions and can plan safely for many years.

Plan long term with an offer for a forward loan

Plan long term with an offer for a forward loan

Forward loans ensure enormous planning security for follow-up financing for construction projects or property purchases. As a borrower, you can secure yourself cheap interest rates many years before the end of the fixed interest period, so that you know exactly what the costs will be. Most lenders can apply for a forward loan up to five years before the payment date. As a result, it is possible that borrowers will not have to take any financial risks for the next 20 years and know exactly how much they will have to pay – to the cent.

The maximum length of time without commitment interest between the conclusion of the contract and the time of payment depends on the respective lender. Depending on the lender, very different conditions can be set here. In principle, a forward loan can be taken out if the real estate financing will not run for more than five more years. A loan comparison should also be carried out before taking out a forward loan. The easiest way to do this is via the Internet, where you can compare the individual loan offers free of charge.

Real and fake forward loans – what are the differences?

If you want to take out a forward loan, sooner or later you will come across the terms “real” and “fake” forward loans – but what exactly are they? Basically, the real forward loan refers to a follow-up loan with an interest rate fixation in the future, the terms of which are already clear at the time the contract is concluded. Every month that passes before the loan is paid out, lenders may charge an interest surcharge. This averages between 0.01 and 0.04 percent of the loan amount and always depends on the lender. It can also happen that the lender does not charge any additional interest at all.

This is offset by the fake forward loan, in which the new fixed interest rate begins immediately when the loan contract is concluded. Nevertheless, the payment will only take place when the existing financing has completely ended. Up until the point of redemption, there is a phase without commitment interest, the conditions of which depend on the bank, however.

What is the cost of a forward loan?

What is the cost of a forward loan?

The cost of a forward loan varies depending on the bank. On average, interest rates can be between 0.5% and 1% of the total loan amount – it is worth comparing them here. In general, if savings banks and banks require higher interest premiums for the forward period, then it can also be assumed that the interest rates for building money will increase.

The forward loan and its impact on the land charge

An aspect that should not be underestimated in the case of subsequent financing is the fee that is payable by changing the land charge. If a new bank takes over subsequent financing after the end of the fixed interest period, the land charge must also be adjusted accordingly in the land register.

For this reason, quite a few borrowers are afraid of changing the bank so that these costs are not incurred. And a change in the land charge can well add up to several hundred euros. However, nowadays there are more and more banks that want to win potential new customers by covering these costs. So it can pay off if you pay attention to it when making a comparison on the Internet.

Who is currently benefiting from taking a forward loan?

Who is currently benefiting from taking a forward loan?

As with an annuity loan, borrowers also want a forward loan to benefit from the lowest possible interest rates for the future. Strictly speaking, this is nothing more than an interest rate bet. If the interest rate increases in the future and exceeds the previously set interest rate, the forward loan will definitely pay off. But if interest rates fall, then as a borrower you pay more for your loan than is actually necessary.

You should be aware of this risk – however, the forward loan offers another decisive advantage: As a borrower, you can plan your building finance without any speculation. So you know many years in advance how high the monthly installments will be. There are no nasty surprises like sudden interest rate hikes and other costs.

How do we deal with repayment of loans and borrowings

Over half of Poles declare that they read the contracts thoroughly before signing, but as many as 12% read them only after signing. Almost 40% of people participating in the study only guess what the consequences of not paying back the loan may be, because they are not familiar with the part of the contract that applies to them.

One-third suspects they may have problems repaying the liability before it is incurred. These are the results of the latest report, a company hapi-loan, which shows how Poles manage their finances.

How do we deal with repayment of loans and borrowings

How do we deal with repayment of loans and borrowings

For the third time, Online Payday Loans conducted a public opinion poll to check Poles’ attitudes towards meeting their financial obligations. How do we deal with repayment of loans and borrowings, what do we usually borrow money for, do we know and understand the provisions of contracts signed, or do we understand the consequences of non-payment of financial obligations.

According to the data of the Credit Information Bureau, Poles are increasingly willing to borrow money from financial institutions. Last year, banks and loan companies granted USD 78 billion in cash loans and borrowings, with a rise of a few percent in RdR.

The total debt of the loan sector clients is USD 28 billion (USD 5.2 billion of this amount was borrowed from loan companies and USD 22.8 billion from banks).

Poles are bolder in using financial products

Poles are bolder in using financial products

Such as loans and credits. Most often, the purpose of financing is buying a car, renovating an apartment or house, and a paid surgery or surgery. However, it still happens that consumers do not read or understand the contracts they have signed. Therefore, effective education of clients as well as further simplification of contracts is important for the entire industry – says Monika, Communications & PR Manager in Online Payday Loans.

The latest report shows that almost 56% of those surveyed read the contract thoroughly before signing it, which is a slight increase compared to last year’s survey. However, it is still almost 7 percentage points less than in 2017. Superficial check of the contract

this year it was declared by 1/4 of respondents. Only after signing the contract does it analyze 12.4% of respondents, while 3.5% of respondents do not read the content of the contract at all.

Interestingly, despite the fact that more than half of the people participating in the survey declared reading contracts, and 25% their superficial reading, almost 40% of respondents declare that they do not know the records regarding the consequences of non-repayment or delay in repayment. 53.3% of respondents have very good awareness of this type of conditions (a level similar to the 2017 and 2018 survey). 8.3% of respondents do not know the consequences of delay or lack of repayment.

According to the study

According to the study

The most popular loan targets are still a car, renovation of an apartment or house and paid operations or procedures. Almost half of the respondents (46.9%) would borrow money for the car, a slightly lower percentage of responses (about 45%) concerned renovation. Paid operations or procedures are costs at which 30% of respondents are willing to take a loan. Less than every fifth respondent would take a loan for the purchase of electronic equipment, and every tenth – for a holiday.

The highest percentage of such responses was recorded in cities with 20-50,000 inhabitants and over 100,000 inhabitants – nearly 40% each. However, a large proportion of respondents believe that they will best compare offers on their own. 4 out of 10 respondents indicated that if they considered taking a loan, they would decide to analyze the offers themselves.

Forward loan when financing a property

 

The forward loan is an annuity loan that plays a role in real estate financing. It will only be paid out after a certain lead time after the conclusion of the contract. In this so-called forward period, ie in the period between the conclusion of the contract and the start of the term, no loan or commitment interest is due.

A forward loan is usually concluded when a certain interest rate is to be secured for the future at the time the contract is concluded. That is why forward loans are usually also used in follow-up financing.

In order to guarantee interest rate security, the borrower must pay an interest premium, which is calculated based on the duration of the interest rate fixation and is also dependent on the duration of the forward period and the current interest structure.

When is it worth taking out a forward loan?

When is it worth taking out a forward loan?

Basically, it can be said that a forward loan is not worthwhile when there is a period of high-interest rates. This is the case even if all the signs look as if interest rates for real estate financing would decrease in the following years.
However, if there is a low-interest rate phase, a forward loan is a wise decision. This will secure the currently low-interest rate for follow-up financing.

Put simply, a forward loan is a bet. At low-interest rates in the future.

Use of low-interest rates for forward loans

Use of low interest rates for forward loans

A forward loan is used to conclude real estate financing for the future with the current conditions. For this reason, it is worthwhile to use the economically favorable location and the low-interest rates for financing. However, when interest rates for mortgage lending have bottomed out, there is usually a hint of a turnaround.

Interest rates will not continue to fall, rather there will often be a trend of rising interest rates. Of course, interest rate developments can never be predicted, but low-interest rates are always a good argument to take out a forward loan. This reduces the risk of rising interest rates for real estate financing.

Early completion is worthwhile

Early completion is worthwhile

A forward loan can be taken out up to 60 months in advance. If the current debit interest rate commitment for real estate financing ends within the next five years, a forward loan can be a cheap follow-up financing.

Anyone who chooses a forward loan must – as already mentioned at the beginning – pay an interest premium for the forward period. This is about 0.01 to 0.02 percent per month. If it is to be assessed whether the conclusion of a forward loan is worthwhile at the current time, this interest premium must be included in the costs.

If the interest for the construction money increases during the time of the forward period beyond the interest premium, then it pays off to have taken out a forward loan. With shorter forward periods of up to twelve months, some banks are now also waiving the interest mark-up. There are always certain offers that do not include a surcharge. For this reason, an in-depth comparison is of course always useful.

Benefit from the forward loan after canceling a long interest rate fixation

Benefit from the forward loan after canceling a long interest rate fixation

In addition to follow-up financing, a forward loan is also suitable for rescheduling. Borrowers in particular, who once agreed a long fixed interest rate with their real estate financing, can exercise their statutory right of termination after ten years.

According to Section 489 of the German Civil Code, it is, therefore, possible, ten years after the full payment, to cancel all or part of the current real estate financing. In this case, you do not have to pay a prepayment decision. A look at the contract documents and a comparison of cheap forward loans can help you find suitable follow-up financing and save money.

The advantages of a forward loan also have limits

The advantages of a forward loan also have limits

Although there is little reason not to take out a forward loan during a low-interest rate phase, it is not so easy to cancel a contract. If the loan was concluded at a rather unfavorable time and borrowers want to terminate the contract prematurely, banks usually charge a so-called non-acceptance fee. This usually corresponds to the loss of interest earned by the bank. It therefore only makes sense to not use a forward loan if there is another alternative that also compensates for the compensation payment.

Calculation of a forward loan

Calculation of a forward loan

Two factors are decisive for the calculation of a forward loan: the remaining term of the current real estate financing and the duration of the interest rate commitment of the forward loan. The interest premium for the forward period is calculated from these two variables. The longer the current loan contract runs and the longer the selected fixed interest rate for the forward loan, the higher the interest premium will be.

However, other factors are important for the concrete calculation of a forward loan. The duration of the fixed interest on the follow-up financing, the loan amount chosen and the desired repayment also play a role. Since the calculation is very individual and always depends on the individual needs of the borrower, this should be done by a bank or an independent credit intermediary.

Weigh the pros and cons of a forward loan

Weigh the pros and cons of a forward loan

Whether the decision for a forward loan is good or bad depends, among other things, on the borrower’s life situation, their own expectations of interest rates and their interest in financial issues in general.

Borrowers who rely on stability can of course secure long-term interest rates with a forward loan. In the event of changes in life (eg change of residence, change of employment, own use of the property), a forward loan can also become a financial burden.

If the questions about the current and planned life situation are answered, a forward loan can certainly contribute to more security in the personal planning of finances. For example, the monthly rate has been fixed for a long time and a sudden rise in interest rates does not have a negative impact on monthly expenditure on financing.

In view of these facts in particular, the premium for the forward loan helps to hedge against rising interest rates. It is a kind of insurance premium. Such protection often proves to be sensible and necessary if borrowers have only a small amount of equity. In addition, of course, very few customers want to monitor the development of interest rates over several years in order to find an optimal time for follow-up financing. In this case too, it is worthwhile to secure today’s low interest rates for later with a forward loan without regularly keeping an eye on the development of the interest rate level.

Obtain offers for forward loans in good time

Obtain offers for forward loans in good time

Many savings banks, banks now offer forward loans, but only a comparison of different offers leads to the best loan for the individual situation.

Borrowers should obtain their first offers at the latest when the current fixed interest rate on real estate financing is less than 36 months. At best, the desired loan amount and a previously selected fixed interest period should then be used to search for corresponding offers. Independent credit intermediaries can be of assistance here.

Borrowers who are not yet sure whether a forward loan is actually a good solution for them can still obtain offers about twelve months before the end of the fixed interest period and usually still benefit from the fact that due to the short forward Period no interest premium is calculated.

About Online Payday Loans

Spring is the perfect time to implement your plans and make your dreams come true. The days are longer and it is getting warmer. This affects our physiology and well-being – we feel better, we have more energy and we are willing to take on new challenges. hapipans wishing to support their clients in their implementation have extended the offer of long-term loans.

Online Payday Loans, the brand awarded by Good Finance in November 2019 in the category of the best non-bank loans, is aware of the growing needs of its customers and the need to enrich your offer on a competitive market.

The repayment period has been extended

The repayment period has been extended

Therefore, it decided to increase the amount of available loan up to USD 15,000. In addition, the repayment period has been extended – up to 36 months. The offer is available from March 6. Until now, clients could take out a loan of up to USD 10,000, with repayment options up to 24 months.

The new offer still gives you the opportunity to take advantage of consumer benefits, such as the possibility of starting repayment even after two months from receiving money or taking advantage of credit holidays allowing you to postpone repayment of the next installment by a month.

“Raising the maximum available amount to USD 15,000 means for our clients the possibility of realizing even more interesting dreams and additional unexpected needs. On the other hand, extending the loan period to 36 months means spreading the loan over a larger number of installments, which results in a smaller monthly burden on the household budget, “said Joanna Izdebska, Country Manager at Good Finance.

About Online Payday Loans

cash

The company Good Finance offers non-bank long-term loans under the hapi brand loan, addressed primarily to customers in need of funds to implement their plans and intentions, and who would like to be able to repay the loan in convenient installments, even for 36 months.

The company Good Finance was founded in December 2009. Since December 2014, it has been offering loans under the hapi brand loan. In March 2015, Good Finance based in Leeds (UK) bought the company MCB Finance operating in the Baltic States and Australia. The new company started operating under the name Good Finance Digital, and Online Payday Loans were included in the portfolio of brands and products managed by the said company. Today, Good Finance Digital offers its loans in 8 countries: Lithuania, Latvia, Estonia, Finland, Poland, Spain, Mexico, Australia.

Credit comparator – what are the most important advantages

Do you need to take a loan soon? The trouble, however, is that you work and you do not want to lose your vacation before the holidays? What to do in such a seemingly stalemate situation? After all, usually banking or non-banking institutions work at standard hours (from around 08:00 to around 16:00).

Fortunately, there is a solution. These are loan comparison websites that are constantly gaining popularity. What are their most important assets?

What tools to use

What tools to use

It’s definitely important to note that these types of financial tools give you the chance to save money. How is it possible? There’s no denying that using compare loans you can instantly look at the available options. You only need a few seconds to enter such a portal, select specific loans, enter the amount, repayment period, etc.

Thanks to this you will quickly find out which proposal is currently the most attractive in financial terms. It will save you in the future. All because you will simply pay smaller installments. In that case, it’s probably worth choosing such a solution, right?

Credit comparison

Credit comparison

It is important to know that loan comparison websites also give you the chance to save time. Why? It is worth noting that these are tools that allow you to compare offers of several, several or even several dozen entities with credits or loans at one time. You don’t need to convince anyone that searching for and checking such information on your own job.

It can not be hidden that everything is extremely time consuming and frustrating. Therefore, it is better to immediately decide on helpful internet tools that are really very popular. Considering all these advantages, however, this is probably not surprising at all.

No wonder that there are plenty of people who choose specific loans and use comparison websites. Of course, these are functional tools and adapted to the requirements of even the most demanding customers. It is very important, however, that each offer should be verified again afterwards.

Even the best comparison websites may miss information about, for example, a new player on the market or a change in the conditions in a specific bank, etc. If you are interested in a specific offer, then check everything before starting cooperation with a given entity.