Lightning Credit for the Self – Employed.

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Anyone who has set up their own business or at least thinks about it knows that this is definitely a financial risk. After all, you can never predict exactly whether the company or the activity is really making a profit and, if so, how much. However, some payments for insurance and the like continue month after month, so a certain basic income is required.

In the event that the business or the company gets into trouble, a lightning credit for the self-employed is often a good choice. However, you should consider carefully whether this financial injection can really help in the long run. It certainly makes sense if the crisis can be traced to something that can easily be changed again.

For example, have you been ill for a long time and the business was not going well? Then of course you can have the justified hope that it will be uphill again when you return. Then a lightning credit for self-employed is certainly a good option.

You will quickly find what you are looking for on the Internet

You will quickly find what you are looking for on the Internet

As a rule, loan applications to online banks are approved quickly and easily. Smaller amounts of up to 10,000 USD have arrived in your own bank account within a few days. But there are also offers especially for the self-employed that make more money available quickly. A lightning credit for self-employed up to a sum of 50,000 USD is also possible here.

The application is made very simply over the Internet, the contracts must then be signed and sent again by post. This largely non-bureaucratic processing without consulting appointments or visits to representatives goes very quickly. However, you should not be fooled by the good offers either. Because you should first seriously ask yourself how the financial difficulties could arise and whether the new investment is really worthwhile.

Because there is no point in getting further into debt when there is actually no way out in sight.

Because there is no point in getting further into debt when there is actually no way out in sight.

A lightning credit for self-employed is particularly recommended if you are at the beginning of your career and use it as start-up capital.

It’s better not to set monthly rates too high, because you can’t be sure how much profit the business is really making. It would be unfavorable not to be able to pay the installments right from the start, although independence in the long run could possibly be successful.

As with other loans, a precise comparison on the Internet is of course worthwhile. Because there are several banks that grant a lightning credit for the self-employed. A comparison calculator clearly shows who ultimately charges the lowest interest and who submits the best offer overall.

Does a forward loan always have to be accepted?

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The conclusion of a forward loan has many advantages – but above all, it can be used to secure long-term interest rates if you want to continue financing an expiring construction loan. This gives the borrower security but also takes some risks.

Experts recommend every borrower to look into a forward loan at least three years before the fixed interest period expires. Because it offers the opportunity to secure attractive interest for future follow-up financing at an early stage.

Interest rates are generally quite low at the moment – but are there any disadvantages here? Of course, even experienced financial experts cannot predict 100% how interest rates will develop over the next few years. Therefore, as a borrower, you always take a certain risk – because if interest rates fall even further, you have wasted money unnecessarily. It is therefore important to weigh up the advantages and disadvantages as carefully as possible and compare different offers before you prematurely sign a contract with a bank. An independent financial advisor can also be a good help.

When does a forward loan have to be taken out?

forward loan

Borrowers need to be aware that a forward loan must also be taken out if interest rates should go down in the meantime. So if you sign a loan agreement, you commit to accepting this loan. However, according to German law, there is of course still 14 days to cancel a contract – this also applies to loan contracts.

Should the interest rate decrease further until the forward loan is actually drawn down and you no longer want to take out the loan as a result, most banks still grant a withdrawal. However, one must then expect to have to pay a kind of compensation – here one speaks of the so-called non-acceptance compensation as cost compensation. It can best be compared to a prepayment penalty for ongoing loans.

We, therefore, recommend: Before you hastily decide on a forward loan, you should get a good overview of the current interest rates on the financial market. This makes it easier to assess whether an offer is cheap or not. A reliable indicator here is, among other things, the current yield on Friendly Lender at the National Bank. If this increases, building rates will most likely rise in the coming months. It is important to keep an eye on the course over several months in order to recognize trends.

Of course, the individual’s life situation should also play a role. If you are in a financially stable position, a forward loan is certainly not a mistake. However, if you plan to spend more in the near future or would like to resell your property, follow-up financing is a hindrance. Because of the current building loan has not yet ended, but a contract for a forward loan has already been concluded, both the non-acceptance fee and the early repayment fee are incurred – and that is not cheap.

The non-acceptance compensation – this is how it is calculated

loan calculator

The non-acceptance compensation refers to a type of compensation that the borrower has to pay to the bank if the building finance is not to be used after the objection period has ended. Because as soon as a contract is signed for a forward loan, you are obliged to ensure that the loan is also taken at the contractually agreed time.

However, if this does not happen, it is common for the bank to demand non-acceptance compensation. Because, of course, the lender has already incurred costs and will miss out on planned interest income. Therefore, the non-acceptance compensation comes close to a classic prepayment penalty.

When can the bank claim non-purchase compensation?

fast loan

There are several cases in which a bank can request non-payment compensation from its customer.

The first option is that the customer does not want to continue building construction that has already been completed. This is the case, for example, when a borrower finds a better offer somewhere else and therefore wants to make a change. In the first 14 days after the conclusion of the contract, the revocation is not a problem – however, the bank can then claim non-acceptance compensation.

It also happens that the borrower miscalculates when calculating a forward loan. You have the option of securing favorable interest rates for follow-up financing five years in advance – but the loan must then also be accepted. If you withdraw from the loan agreement because interest rates have decreased further or you no longer need a loan for personal reasons, you will also have to pay compensation from the bank.

There is also the case that the borrower has not exhausted his previous loan. Anyone who has taken out a higher loan amount than they actually needed and therefore can no longer take the remaining amount must also expect non-payment compensation.

The bank can use two methods to calculate the non-purchase compensation: There are both the active-active method and the active-passive method, which is used more frequently. This is because the current interest rates for mortgage Friendly Lender serve as the basis for the calculation. This can then be used to calculate the return that the mortgage Pfandbrief would have achieved with the same term. This return is then compared with the interest lost to the bank from the initial financing – the difference then results in the non-acceptance fee to be paid by the customer. The following always applies: the higher the difference, the higher the non-acceptance compensation.

The active-active math mode is used less frequently, in which the bank assumes that the money from the loan, which is not used by the borrower, can be used by other customers. The non-acceptance fee is calculated here from the amount of the interest on the loan not taken and the average interest rate of current construction loans on the market.

In addition to the non-acceptance fee, most banks also incur a processing fee – the amount is determined individually by each bank.

In this way, borrowers can avoid non-acceptance compensation

Some exceptions allow borrowers to receive no non-acceptance compensation if they do not take out a loan. For example, fees do not apply if the borrower decides against the loan within the first 14 days after signing the contract. There is also the possibility of incorrect cancellation instructions: If the bank has given its customer wrong or not at all, no compensation will be charged.

Formal errors in the contract or withholding important information such as deadlines and rights also entitle the customer to not have to pay non-acceptance compensation. Otherwise, you can not avoid paying the costs.

Why it makes sense to take care of a forward loan early on

It is highly recommended for borrowers to take care of follow-up financing as early as possible. If you only start looking for suitable follow-up financing a few weeks before the end of the fixed interest period, you will quickly find yourself under pressure and may take advantage of offers that are not as cheap as initially thought.

In addition, the development of interest rates on the financial market must always be observed: If borrowers assume that interest rates will increase in the near future, it is advisable to take out a forward loan as soon as possible. It is not uncommon for the interest rate to change weekly, which is why you should not wait too long to conclude it.

Why comparison of different forward loans is so important

loan comparison

There is now a large selection of banks and credit institutions in Germany that offer a wide variety of forward loans. Since the offers can differ greatly from one another, particularly with regard to their conditions, a careful comparison in advance is absolutely necessary. Under certain circumstances, there is even an inexpensive offer on the Internet: Many direct banks offer significantly more favorable conditions than branch banks since they have no branches and can therefore also offer lower interest rates.

However, each borrower has to decide for himself whether a personal contact person on site is important to him. In addition, attention should not be paid exclusively to the interest rate – the other conditions are at least as important, including the amount of a possible non-acceptance fee. It is calculated individually by each bank – there can be big differences here, too. A loan comparison can then be used to find the lender with the best conditions.

Loans despite debt as far as possible

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Loans despite debt are in many cases the saving option in financial emergencies. Basically speaking, from a legal point of view and from the perspective of the banks, there is nothing to be said against taking out a loan if the applicant is already in debt. Depending on at least a good credit rating, each bank grants loans despite debt. In addition, consumers need to take some things into account when borrowing.

Not welcome at all

Not welcome at all

Consumers who take out new loans despite debts to meet old payment obligations are not welcome guests by credit institutions. Especially not if the new loan significantly exceeds the amount of the loan already received. The Credit Bureau information shows the attitude to credit transactions very clearly. With the consent of the applicant, banks have access to their Credit Bureau file and can therefore understand exactly which loans have been used by the customer.

Of course, the bank asks for the intended purpose. If it turns out that this is a kind of loan repayment in the distant sense, the bank usually offers alternatives, such as debt restructuring. This option is usually accompanied by a reduction in the monthly charge and a lower interest rate.

Object oriented loans

Object oriented loans

The allocation of pure money is particularly difficult if the debtor already has payment obligations. This is due to the fact that the credit institution has to factor in a significantly higher risk of default with a “scratched” credit rating. On the other hand, it is easier to obtain new loans that, despite debt, provide for the financing of a car or other object value as a purpose.

Should the lender be able to track a failure of the monthly installment due several times, he can have the property acquired with the loan pledged to repay it. The Credit Bureau information is less important for this type of loan than the creditworthiness of the applicant. As a standard, a bank determines creditworthiness when it receives a credit request by submitting proof of income.

Debt is always a bad alternative

Debt is always a bad alternative

The danger is extremely high that the debtor will slide even deeper into the debt trap and ultimately suffer capital collateral damage. At this point it should be mentioned that Credit Bureau is not only a protection for banks, but also a security facility for borrowers.

By law, in the event that an application is rejected, this denial of funding should under no circumstances be subjectively assessed. The tendency or risk of over-indebtedness is so high in today’s society that, for example, the security device described can fully justify its existence.

Bank loan – Choose the best one

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A bank loan involves obtaining a sum of money from a bank, and repaying it within a well-established time frame, with the addition of interest and commissions. There are several types of loans, such as: car loan, mortgage loan, personal loan, shopping card, fast online credit, etc.

Do you want a house? You call for a mortgage. Do you want a car? Get a car loan. Want to go on a vacation? You get a personal needs credit or a shopping card. Do you have a medical emergency? Get a quick credit online.

How To Choose A Bank Loan?

How To Choose A Bank Loan?

There are many banks that lend. Taking a loan is a very important decision, as it is generally paid for a long period of time. That is why it is necessary to thoroughly analyze all the options.

We compare different offers and helps you find the best solution. We work at national level with the best partners in the financial sector and we take care to analyze objectively each offer.

Why Should We Consider Before Taking a Bank Loan?

Why Should We Consider Before Taking a Bank Loan?

When looking for the best bank loan, you should look at the following:

Borrowed Amount – this differs depending on your needs at the time, but also on the income you have. Each bank offers a credit simulator that will help you see exactly what amount you can get and what the monthly rate will be. Also, lender also offers a credit simulator, which brings together offers from several banks.

Return Period – varies greatly depending on the type of credit you want. For example, fast loans or shopping cards have repayment terms of several months, auto loans or personal loans for 1 to 5 years, and mortgages can extend even over a period of 30 years.

Monthly rate – this is calculated based on the amount borrowed, the return period, but also the interest rate and other commissions. The higher the amount borrowed and the shorter the repayment period, the higher the rate. A low rate is obtained when you borrow a small amount and pay it back in a longer time

Interest Rate – determines the amount to be paid to the bank for granting the loan

DAE – or Effective Annual Interest, includes both interest and all other fees and charges charged by the bank. So when comparing offers from several banks, do not just look at interest because you can be tricked and there may be many hidden fees. It is best to compare DAE.

What Are The Benefits Of A Bank Loan?

What Are The Benefits Of A Bank Loan?

The advantages differ depending on each type of loan. For example, fast loans, personal loans and shopping cards have the advantage that they can be obtained easily and quickly. Mortgages have the advantage that a very large amount of money can be obtained for the purchase of a home, an amount that many could not otherwise own.

Enter right now and do a bank loan simulation. Together with us you will find the best solution to have the money you want. We work with many banks and we will help you find the best credit. Apply now!

When you need money – you compare private loans

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With a private loan, you can have money in hand for consumption, investment in your accommodation, purchase of used car and the like. The requirements for being able to take out a private loan are quite generous and you can get your money paid off relatively quickly. Before you take out a private loan, however, there are some things to consider. Not all private loans look the same. You should compare offers of private loans from several banks and credit institutions before deciding. You can compare sms loans if it suits your needs better than a private loan. It is easier and faster to get sms loans but there are higher fees.


Terms for private loans

Terms for private loans

In order to take out a private loan, you usually have to be 20 years of age, have a fixed income and have no payment notes. The basic conditions are not very difficult to fulfill. However, what is considered a fixed income can differ between different lenders. In addition, some lenders may have limit amounts for different incomes. This means that you with a low income are limited to borrowing lower amounts. When it comes to payment remarks, there are some lenders who place less weight on them. However, you can expect to have to pay a little extra in interest if you have previously neglected your payment obligations.


Private loans

Private loans

The interest rate on a private loan is set individually based on the lender’s analysis of your current ability to pay. You should therefore not stare blindly at the target prices that different lenders present in offers. However, the highest interest rate in the offers is always the highest interest rate you can pay. The better your financial situation looks, the lower the interest rate you will get. However, you should be careful to compare the effective interest rate, that is, the annual interest rate with any costs included. Some lenders may offer low interest rates, but at the same time charge quite hefty fees. For smaller amounts of loans, the fees can be quite hard on the total.


Loan Amount

Loan Amount

According to current rules for the industry, a maximum loan amount of $ 350,000 applies. Regarding the lowest loan amount, $ 20,000 is normally a lower limit, although there are lenders who can also lend $ 5000 and $ 10,000 in the form of a private loan. Not all lenders in private loans offer loans of up to $ 350,000, so you have to look a little carefully if you need larger amounts.

Credit for funeral expenses

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Payment in installments and deferral by the funeral director

Payment in installments and deferral by the funeral director

In the event of an inheritance or a life insurance payment that is certain to be expected, relatives do not necessarily have to take out a loan for the funeral costs, since most funeral companies are willing to defer payment in such cases, for which they either charge little or no interest; in some cases, the interest is only calculated on designed external costs.

However, only a few morticians offer long-term installment payments, so that the bereaved mostly have to contact a bank for borrowing. In many regions, a coffee table is customary on the day of the funeral and is paid for directly in the restaurant, although it is rarely possible to defer payment.

The billing of further costs such as the amounts for the flower arrangement and the cemetery fees can be handled as a service by the undertaker. This procedure is useful if you need to borrow funeral expenses because the bank can be provided with a complete estimate.

Take credit for the funeral through a bank

Take credit for the funeral through a bank

Even people with a poor credit rating can easily borrow for funeral expenses, provided they can provide the bank with expected payments from an inheritance or insurance contracts. In this case, the financial institution secures the loan amount by assigning the corresponding payments up to the amount of the funeral loan.

If no inheritance or insurance benefits are to be expected, the approval of the application for a loan for funeral expenses is based on the creditworthiness of the borrower. In such a case, however, smaller financial institutions are more willing than large direct banks to lend despite their poor creditworthiness, as they perceive the special situation of the bereaved in addition to economic aspects.

However, the bank is obliged to partially offset an increased default risk with an above-average interest rate. A loan for funeral expenses is easy to obtain on personal loan brokerage websites because private lenders agree to pity lending to survivors.

Is there government aid?

Is there government aid?

If neither the assets of the relatives nor the expected inheritance including any insurance benefits are sufficient for a decent funeral, a loan for the funeral costs can be applied for through the social welfare office. When it comes to lending, the municipality has a lot of leeway; however, if the loan application is rejected, they must pay a simple social funeral without a claim for reimbursement.

Favorable loan for debt restructuring.

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Debt restructuring is used to combine expensive existing loans with a cheap loan. Usually, the number of existing contractual partners decreases with the borrowing for a debt rescheduling, which, however, is not a noteworthy advantage in itself, since the payment of the loan installments is usually made by direct debit and does not cause any work or costs. Since the borrowing rates for new loans have dropped regularly in recent years, rescheduling older loans makes sense in many cases.

Which loans are included in the debt restructuring?

Which loans are included in the debt restructuring?

A cheap loan for debt restructuring serves to replace most of the existing loan liabilities. Loans that were granted on particularly favorable terms are not included in the measure. Above all, this includes real estate loans and vehicle loans, but installment payment agreements with mail order companies and brick-and-mortar stores are often made at particularly favorable conditions or free of interest.

However, credit lines that are used are included in the debt restructuring on the current account and on the credit card account, since particularly high interest rates are charged for the overdraft facility and the credit card facility.

What to consider with debt rescheduling loans

What to consider with <a href=debt rescheduling loans” width=”640″ height=”426″ />

Borrowers only apply for the pooling of loans if a cheap debt for debt restructuring actually leads to savings. When calculating the cost savings from the planned rescheduling, debtors take into account not only the interest on the new loan but also any prepayment penalties that may have to be paid to their previous lenders.

In a few exceptional cases, a cheap debt rescheduling loan also makes sense without saving money. This only applies if the borrower absolutely has to reduce his monthly burden from the loan installments and the previous partner banks have rejected an application.

A cheap loan for debt restructuring is practically processed in such a way that the borrower sends the new bank a list of the debts to be paid and at the same time authorizes them to transfer the debt rescheduling loan to the accounts of the previous lenders.

This procedure is necessary so that the credit institution responsible for the rescheduling knows that the borrower is not taking out an alleged debt rescheduling loan as a new loan and may therefore no longer be able to meet its obligations.

Maintain discipline after debt restructuring

Maintain discipline after debt restructuring

A cheap loan for a debt rescheduling does not automatically reduce the overdraft facility on the checking account or any other credit line such as that of the credit card account. Thus, the recipient of a corresponding loan must maintain discipline after the debt rescheduling so that he does not accumulate a costly negative balance on the checking account or credit card account shortly after the successful measure.

An active reduction of the discount range by the account holder is possible at any time, but is rarely required to ensure solvency in the event of unforeseeable expenses.

Mortgage loan with the lowest commission

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When most of them need to buy, build or renovate a home, most people opt for a mortgage loan. Other types of garages are accepted for a real estate loan, but for a mortgage loan it is obligatory to guarantee with that house for which the money is taken.

Unlike quick loans or for personal needs that are usually repaid in 1-5 years, a mortgage loan will extend over a much longer period of time. Most mortgage loans are offered for 30 years, but there are some banks that offer a repayment term of even 35 years.

The amount borrowed is large, but so are the commissions taken by the bank (especially the analysis and granting commission). Penalties are generally granted if the loan is repaid earlier than the deadline.

How to Choose a Mortgage?

How to Choose a Mortgage?

There are many banks that grant mortgages. Taking a mortgage is a very important decision, because it will be paid for the rest of your life. That is why it is necessary to analyze all the options very well.

We compare different offers and helps you find the best solution. We work at national level with the best partners in the financial sector and we take care to analyze objectively each offer.

What Are the Steps to Obtaining a Mortgage?

What Are the Steps to Obtaining a Mortgage?

It depends on each bank or lending company what conditions it has. But most companies will ask:

  • Proof of salary or proof of income obtained (pensions, rents, dividends, independent activities, copyright, etc.).
  • A certain age at work
  • Age of minimum 18 years and maximum 65 years
  • An advance that differs from one bank to another (generally it’s 15%)
  • Other specific conditions

Why Should We Consider Before Taking A Mortgage?

Why Should We Consider Before Taking A Mortgage?

The most important aspect to be taken into account is the interest rate and the commissions received. Banks can grant a mortgage with a fixed, variable or mixed rate.

Fixed rate – the payment amount stays constant throughout the contract. The advantage of this method is that you will know in advance exactly how much is paid each month. You don’t have to worry that the rate will increase. A mortgage with a fixed rate usually has a repayment term of 20 years

Variable rate – this rate is reviewed annually or twice a year, and changes depending on market conditions and the index. The advantage is that the rate is lower at first, and sometimes it can even fall. It is also granted for a longer period of time, for 20-30 years. The disadvantage is obvious that the rate can increase.

Bad Payer Debt Consolidation – What Alternatives?

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Businessman cutting a credit card that canceled by financial institute due to negligent usage

Self-employed workers, employees and retirees can all apply for bad payer debt consolidation loans. With this in mind, large banks such as Likecredit, BeOne Bank, Sanjuan Finance, and companies with a more local connection, such as the various mutual banks, have therefore enriched their offer with this type of financing, which should have a fundamental objective to pursue: to make the burden of repayments linked to several ongoing loans is more “bearable”.


Personal or “purpose” loan?

Personal or "purpose" loan?

Simplifications of concepts, especially in the financial sphere, are useful but often misleading. For simplicity, finalized loans are defined as those that are granted for a specific good or service, while personal loans lack any form of justification. In the case of consolidation loans for bad payers, protested or financed with a good credit rating, we should speak of “purpose” loans instead. In fact it is a form of loans that is granted on a personal basis but to achieve the aim of improving the sustainability of one’s debt exposure.

This is a loan that can be obtained both when you have objective difficulties in repaying the loans that are already in place, and when you simply want to rearrange the various loans making them easier to manage as a whole (in terms of amount and number of installments).

Precisely for this reason, before becoming bad payers, you should act in a timely manner, given that banks can have very different “tolerance” thresholds. Some accept a number of payment “delays” equal to 3, while others can reach at least 6. Furthermore, when choosing the bank with which to take out the loan, one should look precisely at the credit relationship matured with it. Here we can have two extreme situations:

  • you have a loan in progress with a bank A that we are unable to repay. After the first delay when it is now clear that it will be difficult to keep up with the payment of the installments also in the future, it is useful to request debt consolidation with it before becoming chronic and aggravating the bad payer status;
  • you have an excellent relationship with bank B, with which you also have the current account through which the installments of loans already in progress are paid. It is appropriate to ask for debt consolidation with it even if the installments that it is difficult to pay are with other credit institutions.


Operation and choice

debt consolidation

In requesting a debt consolidation for bad payers, also in relation to one’s job position, a first investigation must be carried out aimed at knowing the tolerance thresholds of the various banks that offer this type of loan. Lenders who prefer a threshold higher than the accumulated delays are preferable (for example if you have 3 delays it is better to contact a bank that accepts 4 or 6 and avoid those that accept no more than 3 delays). Therefore, as with any other loan, various estimates should be requested, then a comparison should be made and the one that provides a lower outlay overall should be chosen.

Once you have found the best estimate, you must follow the procedure indicated by the chosen bank or financial institution: deliver the income documents, personal documents and the repayment accounts of all the loans you wish to consolidate. At this point all you have to do is wait for the outcome of the preliminary investigation phase and in case of a positive outcome, be punctual in repaying the only installment that will result.

What does it mean to consolidate?

debt consolidation

As mentioned at the beginning, the consolidation of loans or debts was created to make a loan more manageable. This is done by grouping the various installments into one monthly or periodic installment. In addition, it is possible to choose a ratio between rate and duration that allows to achieve a lower overall outlay. This means that if before we had 5 installments of 100 dollars each, now we would have to repay a single installment which is for example 400 or 450 dollars. For this reason, it is normally not recommended to request a debt consolidation by adding new liquidity.


When can I request it?

There are no limitations of “opportunity” if by requesting a consolidation loan an improvement is obtained compared to the previous situation. However, there are limitations dictated by the “time” that should not recommend a request for debt consolidation. For example, when loans that are coming to an end are included in the transaction (for which the repayment of the main portion remains), there is no convenience in refinancing a loan for which almost all the interest has already been repaid.

Furthermore, given that the reduction of the amounts passes both for the application of a normally lower interest rate and for an extension of the duration of the repayment period, a longer duration than necessary should not be chosen, unless this is dictated by the real need to have a decidedly lower installment than the sum of those already in progress. However, this is a decision that must be carefully considered.


The alternative of the transfer of the fifth

The alternative of the transfer of the fifth

Sometimes it can happen that the bad payer status is such as not to allow access to a normal debt consolidation. In these cases, with the exception of the self-employed, the transfer of a fifth of the salary can be requested. Thanks to the operation that characterizes it, it can in fact be used to pay off already existing loans, as well as to request new liquidity. However, each early repayment must be made by the applicant, having no relevance to the loans already present.


Examples of loans to consolidate debts

consolidate debts

Sanjuan Finance has already included Monorata in the loans section for some years. Also in this case the duration can reach up to 120 installments but the maximum amount obtainable rises to 75 thousand dollars. For those who want to protect themselves against the unexpected, the optional Loan Protection policy is provided.

Credit Card interest rate increase Notification

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Your credit card interest directly affects the cost of implementing a balance on your credit card. You can start with a low interest rate on your credit card, but your rate does not always remain the same for the life of your credit card. Your credit card company may raise your interest in certain circumstances, but they don’t always have to inform you in advance.


Mandatory interest rate increase Notice

interest rate

There are a few situations where a credit card issuer is required to send an interest rate increase in advance.

Banks must send an increase notification interest at least 45 days prior to the increase. This is a requirement of the Truth in Lending Act, a federal law that protects consumers from lenders.

You do not have to accept the higher interest rate. During this 45-day period, you have the option to opt-out of the interest rate increase if you prefer to pay off your balance with the current interest rate. Opting-out allows you to pay the existing interest from your balance. However, if you choose to opt-out, the creditor can close your account.

If you do not respond to the increase notification interest at all, the credit card company can apply the new interest rate to all new purchases made starting 14 days after the notification is sent.


When the rate increase Notice Cannot be required

credit card

Credit card issuers do not always have to send a notification interest increase before increasing your rate.

If the rate increase is due to a delinquency or default, the creditor does not warn you of an interest rate increase. These penalty increases are usually outlined in the small print of your credit card agreement. For example, if you are at least 60 days late on your credit card payment, your card issuer may raise your interest rate without sending a rise in interest notification interest or giving you a chance to opt out.

The credit card company also failed to notify you if your interest rate increased because a promotional rate expired.

Most credit cards these days have a variable interest rate that is linked to an underlying rate, such as the prime rate or LIBOR. If the underlying interest rate rises, your April credit card may also increase. Your credit card company does not have to send in advance to increase your rate in this case; Your credit card agreement will provide an overview of what rate your April is bound to and how it responds to changes in the index rate.


Dealing with Unfair Rate Increases

Dealing with Unfair Rate Increases

Contact your credit card company about an inexplicable increase in your interest. They will be able to explain why your interest was raised. If the increase has occurred an error, you may be able to get your old interest restored.

You can file a complaint with the Consumer Financial Protection Bureau if you think that your credit card interest was raised in the error or the credit card company raised your rate without proper notice of default.