Credit Bank – Opportunities for borrowing through the bank

 

 

If personal circumstances require borrowing, a multitude of factors must be taken into account by the interested party. Choosing a suitable loan agreement involves more than comparing effective annual interest rates. The fine print, as well as the financial situation and private planning of the loan applicant, have a decisive influence on the choice and the successful execution of the loan contract.

Borrowing from the bank

Borrowing from the bank

The banking system places high demands on prospective borrowers. An impeccable credit rating and a secure income are usually among the essential requirements for a positive credit decision. This means that many people are excluded from bank lending. But in addition to the banks’ loan offer, non-creditworthy prospects also have numerous options for borrowing. Private loans or loans from foreign banks are popular and proven forms of cheap financing.

The overdraft

The overdraft

A simple and quick way to increase the financial resources at short notice is the disposition loan. The overdraft facility is granted by the house bank as part of the current account agreement or the account holder explicitly applies for it.

The overdraft limit granted, and thus the amount of the credit line granted, is usually based on the regular monthly income of the account holder, which must actually flow into the checking account. The overdraft facility can be canceled by the bank at any time, but it is also possible to reduce or increase the granted credit limit. The overdraft facility, also known as overdraft facility or overdraft facility, can be used to respond to short-term financial bottlenecks.

However, the interest burden on the overdraft facility is relatively high, so that this form of financing can quickly become a ” credit trap “. If the high interest charges from the overdraft from the monthly available budget can no longer be managed, refinancing into a different type of loan is an option. The installment loan is usually used to replace the amount owed from the overdraft facility.

The installment loan

The installment loan

The installment loan is a suitable form of loan financing for orderly cash repayment and repayment in monthly installments. The installment loan can secure the liquidity of the funds to compensate for an overdraft or to purchase goods and services. This leaves the borrower with the option of also paying mandatory monthly payments, such as rent or energy costs.

Also known as a ” consumer loan”, the installment loan can be used for almost any purpose. The installment loan finances the car purchase, but also the vacation. From the furnishing of the home, the renovation of the bathroom, breast surgery or tooth restoration to recharging your batteries in the wellness oasis, there are hardly any limits to how you can use the installment loan. The amount and the term of the installment loan are among his most important selection criteria, because here the providers differ in their offers.

In principle, loan amounts of between 1,000 and 75,000 USD are possible with the taking out of an installment loan, whereby its term is usually between 12 and 72 months. As with the overdraft facility, the purpose of the loan application is usually to be specified, but is usually insignificant for the loan approval. This results from the fact that no collateral is required for the installment loan and it is therefore given as a ” blank loan”. However, the bank can request credit insurance (residual debt insurance) or a garnishment of wages and salaries if the borrower no longer meets his repayment obligations.

For people who are fundamentally excluded from lending, such as the unemployed, low-wage earners, the self-employed, and people with a negative Credit Bureau, a loan approval is usually still possible. In addition to the guarantee, the lender may also require residual debt insurance. However, the installment loan always offers much more favorable conditions than the overdraft facility. A processing fee of 1 to 2 percent is usually charged for its submission.

The credit line

The credit line

Similar to the installment loan, the framework loan is also an opportunity to be prepared for unforeseen financial burdens. The amount of the credit line is agreed, but its disbursement amounts are only paid on demand.

With the credit line, the borrower decides when and how much of the agreed credit line should be available to his account. The framework credit is therefore a permanent cash reserve that enables great financial flexibility. A usual credit line for the credit line is between 2,500 and 25,000 USD, whereby amounts of any amount – from 1 USD – can be called up flexibly.

Interest is only payable for the amounts actually paid, but not for the agreed framework. The credit line is also a cheaper option for financing than the credit line.

guarantee loans

guarantee loans

The lender can require the use of a guarantor for a large number of credit transactions. If the prospective customer does not have sufficient collateral available, the credit institution may request the provision of a surety to cover its risk.

As a guarantor, people who have the desired credit rating are responsible for the proper repayment of the loan. In the event of insolvency, but also if the borrower is unwilling to pay, the guarantor is liable with his entire assets. Even if the borrower has income or assets, the bank can fall back on the guarantor if the agreed loan repayment fails to materialize. The guarantee loan or the securing of an installment loan with a guarantor also enables people with little or no income to take out a loan.

The residual debt insurance as security

The residual debt insurance as security

With many types of credit, but especially with installment and guarantee loans, the conclusion and assignment of the residual debt insurance become mandatory for the borrower. As an alternative to the residual debt insurance, life insurance (capital or risk life ) may also be accepted, with risk life insurance only covering the death.

Capital life insurance may also have savings capital that can be used to satisfy the loan claims. The amount of the ceded security must ensure the proper repayment of the loan in the event of death, unemployment or illness of the borrower. The residual debt insurance and other accepted collateral are to be assigned to the lender, with which the insured person can no longer assert claims under the contract.

While the premiums for risk life insurance remain the same, the rates for residual debt insurance also decrease as the remaining debt of the loan falls. The more of the loan amount that has already been repaid, the lower the residual debt insurance.

The mortgage loan

The mortgage loan

Anyone who can use real estate to hedge the bank’s risk when borrowing is rewarded with more favorable loan terms. In most cases, the intended use of the mortgage loan is freely selectable, but in the case of specialized providers such as the mortgage banks, the mortgage loan is generally linked to the property. In this way, pure mortgage banks usually only finance new buildings, conversions, renovations and modernizations of a property.

A mortgage is entered in the land register of the local court for a mortgage loan. Rights from the property are thus transferred to the lender. When the property is sold, the lender is first satisfied in the amount of his claim, the remaining debt of the loan. The sale or transfer of the property can only take place with the consent of the mortgage bank registered in the land register. If the mortgage loan has been repaid in full, the mortgage is also deleted from the land register. Credit institutions, mortgage banks and insurance companies issue mortgage loans that are usually equipped with low interest rates and good conditions due to the high level of assigned security.

Suitable types of credit in the absence of creditworthiness

Suitable types of credit in the absence of creditworthiness

For those who cannot withstand a bank’s credit check, there are cheap alternatives for borrowing on the private credit market. The comparison of the loan offers on the Internet shows the options for obtaining a loan approval even if there is a low or low income or if the Credit Bureau is negative.

The personal loan is not subject to the legal requirements of banking, and other regulations also apply to foreign credit institutions. This means that people who are fundamentally not creditworthy, such as the self-employed, start-ups or low-income people, can be financed through cheap loans. The online comparison options as well as the online conclusion of loan contracts are simple, quick and transparent.

Experience report: 0% financing loan

 

The 0% financing is offered by numerous online shops and offline purchases in order to be more attractive to customers. The shops attract with monthly installments without any interest. Which conditions are linked to this financing model and who can conclude them? 

Zero percent financing for cellphone purchases via Agree Bank

Zero percent financing for cellphone purchases via Agree Bank

In August 2017, our editor bought a cell phone from the Agree Bank online shop. The Motorola brand device should cost 133 USD, it was a special offer. The shipping costs via DHL were 1.99 USD. The total amount thus amounted to $ 134.99, which was relevant for the financing.

After the mobile phone has been added to the shopping cart in the shop, it must then be registered using the e-mail address; an order via a guest account is also possible. Then the delivery type is selected as well as the payment method. The zero percent funding is given here. The annual percentage rate here is 0.0 percent.

Maturities with 0 percent financing

Maturities with 0 percent financing

As a customer, you have the choice between different terms. In this case, financing was concluded over 12 months, so a first installment of $ 11.35 uro and then monthly installments of $ 11.24 are due. The first installment is only due when the ordered product has been shipped.

Attention: This type of financing is only possible from a purchase value of 100 USD, with smaller amounts no 0% financing can be concluded.

The terms are between 10 and 33 months, so that a monthly rate for 0% financing is at least 10 USD. A credit calculator is available on Agree Bank.de, with which customers and prospective buyers can calculate their monthly installments without obligation depending on the purchase price and term.

Which bank is behind it?

Which bank is behind it?

Agree Bank’s zero percent financing is handled by Astro Finance. Astro Finance specializes primarily in car loans and consumer loans.

Consumer loans are usually granted in cooperation with trading partners, as in the case of Agree Bank. This type of cooperation enables retailers such as Agree Bank to benefit from higher sales, because this means of financing means that more people can buy a high-priced product.

Expiration of the 0 percent financing

Expiration of the 0 percent financing

After submitting the order, Agree Bank will receive an order confirmation and an email from Astro Finance. In this email you are greeted warmly and congratulated: ” Congratulations, your funding request has been approved “. Then you will be asked to complete the financing online. There are several options here:

  • WebID
  • Postident
  • market identification

The fastest way is the WebID procedure, here you only need a webcam or a computer or laptop with a functioning camera (smartphone with the appropriate WebID app is also possible) and an ID document.

Identification problems for loan completion

Our editor opted for apparently fast WebID procedures. A link takes you to the partner WebID. Information on name, address, age and telephone number must now be provided in an online form. After confirming the information, a video call is started. Here you sit opposite a WebID employee who checks the information. The ID document must then be held up in the camera so that a screenshot can be taken. Finally, the applicant receives a TAN, which he must enter. The following problems arose here: on the one hand the waiting time was more than an hour and on the other hand the employee complained that the camera was too bad and that he could not read the ID. Our editor was put off by the Postident or Marktident procedure and the WebID session ended.

Market identity and duration of the commitment

Since the credit application could still not be processed at Astro Finance, our editor decided on the Marktident procedure. The identity of the buyer and thus the borrower is checked on site in a Agree Bank store and the loan agreement is signed. This was done within 5 minutes at the Agree Bank service point. Agree Bank forwards the forms to Astro Finance. Once the application is confirmed, the borrower will receive an email.

Another problem arose here: It usually takes around a week from the application to the approval and shipping of the product. After more than 8 days, our editor still has no feedback from Astro Finance about the receipt of her documents. No one can provide information on the whereabouts of the documents when asked by telephone at Astro Finance, the responsible store or the Agree Bank online shop. After 2 weeks, the documents finally reach Astro Finance, the application is approved and the cell phone is sent. It is reasonable to assume that the long service life is to be blamed on the shipping service provider.

The Astro Finance Mastercard: serious or rip-off?

The Astro Finance Mastercard: serious or rip-off?

Once the zero percent financing has been completed and the product has reached the buyer, he will receive mail from Astro Finance again a short time later. Our editor also received two letters: one with a Mastercard and a second letter with a PIN. These letters are likely to cause confusion for some customers, because this card is never mentioned before the 0% financing is concluded, only in the small print. And here we come to the crux of the matter: The Astro Finance Mastercard comes as a credit card for the customer, who may be happy about this newly gained financial freedom.

Attention : Here it is advisable to read the documents really carefully and to check with the bank again if anything is unclear. The Astro Finance Mastercard is tied to certain conditions, which result in costs in the form of interest and are used as a means of payment. It is not advisable to use this card without care! The 0 percent financing from Agree Bank is actually free of charge, with no fees or interest. However, if the Astro Finance Mastercard is used in addition to this financing offer, there are additional costs.

The conditions of the Mastercard at a glance:

  • Availability limit of 3500 USD
  • 0 USD annual fee
  • 2.5% monthly repayment rate
  • Withdraw money free of charge from 300 USD

So here it becomes clear: The use of this card is not free!

Conclusion on zero percent financing

Conclusion on zero percent financing

Finally, based on experience, it can be said that the 0% financing via Agree Bank worked well and that it is a serious offer. The drawbacks that had to be made in the lengthy identification process are not necessarily attributable to the provider Astro Finance. The problems with WebID in particular can be attributed to outdated webcams. The financing was concluded and convinced by the favorable rates. The offer does what it promises – there is really no interest due. In this regard, 0 percent funding is highly recommended.

As already mentioned, however, customers should be aware of the purpose and the costs of the Astro Finance Mastercard sent to them. Anyone who is gullible about a free credit card that is suddenly in the mail will experience a bad awakening. If you don’t want to use the card, you can simply put it aside or destroy it.

Loan in training – financing for trainees & students

There may also be an increased need for money, particularly during training. Low or often even no income in training is the starting point in which you find yourself financially during the training. But there are also various ways of earning money during training, for example through the loan during training.

The loan in training

The loan in training

There is also a comprehensive need for consumption in training. Since apprenticeship periods tend to be longer and longer, apprentices are also getting older and so real realistic income only comes at a much later time than a few years ago.

However, trainees can also take out a loan during their training. To do this, two conditions must first be met. The trainee must be at least 18 years old and have a fixed income. For lending and the amount of credit, the higher the fixed income that a trainee has, the higher it can be.

The trainee must have a checking account in order for a credit transaction to be concluded. It is particularly favorable if the checking account is kept at the bank where the loan is also taken out. Trainees in particular often still live with their parents. However, the term of a loan is often very long-term. One should therefore already bear in mind when taking out the loan that one might want to move into one’s own apartment after completing the training and that these plans can be thwarted by a high credit with corresponding burdens of installments.

The loan should therefore be designed so that it can still be shouldered after training and with increasing monthly financial burdens. The amount of the loan during training is adjusted to the income of the trainee. This means that a trainee is only provided with a limited loan amount.

If the credit requirement is greater than the loan amount made available, the trainee has the option of providing a guarantor to secure the loan amount. In this case, the guarantor enters the credit agreement as the third contracting party and secures the credit with his own assets and income. This means that the guarantor has to undergo a thorough examination by the bank. This includes checking the income, financial obligations and also a Credit Bureau query.

Only if the guarantor also has an impeccable credit rating can he guarantee the loan as such. If a guarantor is provided, the loan amount can be extended to the highest possible amount for the guarantor. Even if the trainee has a Credit Bureau entry, a guarantor can secure a loan.

As a trainee, you should always bear in mind that your own income is still very low and that your own professional career is not yet fixed.

Important requirements for credit in training

Important requirements for credit in training

The basis for lending in the course of training lies in an employment contract and regular monthly income. It is also important that the trial period has already been exceeded during the training. Borrowing can prove difficult, especially when you have just started an apprenticeship. Here too, the position of a guarantor can improve one’s own situation.

Alternatively, you simply wait for the trial period to then apply for a loan. Not all financial institutions are willing to sign a loan agreement with a trainee immediately after the trial period, but some banks can.

Another important prerequisite for borrowing in training is that the trainee is of legal age. Only then will the trainee be fully legally competent and may also conclude effective loan contracts. The credit check is also common for loans in training. This means that the trainee is checked both with regard to his solvency and willingness to pay as well as with financial legacies.

The monthly income is used for the check. Then the monthly obligations are compared. A Credit Bureau test is also carried out. It is advantageous for apprentices when borrowing if they do not yet have to finance their own apartment, since this expenditure considerably reduces the apprenticeship remuneration and therefore also reduces the chances of a loan.

The Credit Bureau query is essential when applying for a loan in Germany. Especially for young people, a forgotten cell phone bill can have a negative impact on the Credit Bureau score. Anyone who has entries here will also not receive any credit during their training.

If the training allowance is below the garnishment limit, some banks often insist on the provision of a guarantor because of the impossible attachment in the event of a loan default. Banks often like to protect themselves here, especially if the income is below this garnishment limit during the entire training. Applicants should prepare for a limited loan amount during training. This is how banks prevent the loan default, but at the same time the applicant is also protected against over-indebtedness.

The loan amounts that are made available for the loan during training are between around 1,000 and a maximum of 5,000 USD. Trainees should exercise caution when it comes to aggressive online loan offers. Before a trainee gets involved in a loan agreement with very high interest rates due to the increased risks for the bank, it usually makes more sense to wait until after the training to start borrowing.

A specialty: the student loan

A specialty: the student loan

Student loans are a special form of credit in training. This is aimed specifically at students who are enrolled at universities and who must also prove this when applying for a loan by means of a matriculation certificate. The student loan is designed to make the student’s financial situation easier during their studies. In addition to studying, many students have to take on jobs to finance their education and living expenses. This in turn means that a student often extends his study time considerably.

Many credit institutions provide student credit for these students. In the case of student loans, in order to obtain this form of credit, it is first of all necessary to provide evidence that the applicant is studying, because these loans are often offered particularly cheaply and with special conditions. In the case of student loans, the applicant has the choice of whether the loan amount is to be paid out once or whether a monthly financial benefit from the loan is desired.

With a monthly payment, the borrower can get a precise overview of his finances and also has regular financial income. For the banks, the collateral for the lending results from the positive job prospects for students, which is why no evidence of income is usually provided. The Credit Bureau query is also carried out for student loans.

Another special feature of this student loan is that the borrower does not begin repaying the loan immediately after the first payment or even the payment of the entire loan amount. With this form of loan, the repayment of the loan is postponed to the time of study. Many banks also give the applicant a grace period, which means that payment in installments is only started three or six months after the end of the course. During this period, the banks see realistic opportunities for graduates to have an adequate job.

Student credit is a special form of student loans. The background for the lending for the banks here is that intensive customer loyalty to university graduates should be achieved already during the study period, who take up qualified activities after graduation, so that solvent customers represent the banks.