Credit for the unemployed – unemployment loan?

Are you unemployed and would like to take out a credit for the unemployed, a personal loan or a consumer credit? Are unemployment and a demand for credit compatible? Is it possible for an unemployed person to obtain a credit? This is the subject that we will briefly deal with today.

 

Difficult access for the unemployed to credit

unemployed to credit

We regularly receive credit applications from unemployed people. These are generally people who have recently lost their jobs and who have recently been unemployed. Some unemployed people thus enjoy a comfortable heritage acquired during their working life. What conditions the obtaining of a credit is the seizability of income. In other words, a credit can only be granted to a solvent person, that is to say a person whose bank can easily seize the income in the event of default.

Unemployment benefits are not garnishable, which hinders access to credit in principle.

 

Seizure thresholds

unemployed loan

The law organized a progressive regime for the seizure of income (wages) and in particular unemployment benefits (regime different from that of wages).

Attachment of wages allows the creditor to attach part of the debtor’s salary or social allowance for the reimbursement of his debt.

For income from activities other than the performance of a work or apprenticeship contract, such as unemployment or sickness benefit, pension, etc., the limits must be applied from January 1, 2013 following.

Net monthly income share entered amount entered
$ 0 – $ 1,069 0% 0
<$ 1,069.01 <$ 1,149 20% $ 15.80
<$ 1,149.01 <$ 1,386 40% $ 94
+ $ 1,386 net above $ 1,386

Unemployment benefits are therefore fully seizable beyond a monthly amount of $ 1,386.

This means that below this amount, the creditor cannot enter your unemployment benefit in the event of default. In this case, your access to credit is of course reduced and you are unlikely to have your request for credit accepted.

 

Existence of other guarantees

unemployed loans

A person may become unemployed after years of work during which they have acquired a comfortable wealth (eg house, car, savings, securities account).

If this unemployed person wants to apply for a loan, the credit intermediary (the broker) will carefully examine his financial situation and see to what extent he can find guarantees.

Most often, this will involve registering a conventional mortgage on a real estate property that is vacant and free of charges for the unemployed.

Note that the mortgage credit is not acceptable beyond a certain amount (generally $ 25,000) given the notarial fees that this type of credit generates.

Credit – preferably on an overdraft

One of the most popular solutions is, of course, credit. In the event of problems with financial liquidity, the formation of irregular, unpredictable payment gridlocks, an overdraft facility may be a convenient option. It gives the opportunity to generate a negative account balance up to the limit granted to the company by the bank.

Credit – preferably on an overdraft

Credit - preferably on an overdraft

The advantage of this loan is, among others no repayment schedule. Each payment to the account automatically repays the loan or part of it and allows you to re-use the available limit.

A big plus is also that banks usually charge interest only on the amount actually used, not the limit granted. An overdraft facility is usually granted for 12 months. However, most banks offer the option of renewing the loan after this deadline without having to repay the full amount at the end of the loan period.

Of course, an overdraft facility requires an account at the crediting bank. So, if you choose an offer from an institution other than the one currently running your account, you’ll need to transfer it. With this move, however, it is worth pausing until we receive a credit decision together with the loan terms for our company. The procedure should not take long, some banks ensure that they are able to assess creditworthiness even in 1 day.

Banks also boast of being able to offer companies a lot of money, even over USD 1 million, as part of an overdraft facility. In practice, however, the loan value will depend on the company’s seniority, financial condition and collateral offered. Without tangible collateral, it is usually not more than 20-30% of the company’s revenues for the last year.

Factoring – quick financing

Factoring - quick financing

Factoring allows quick access to funds frozen in invoices with deferred payment dates. So it is not a product for a company that is suddenly surprised by problems with liquidity, but rather for a company in which the business model is to offer the so-called trade credits. There are many such companies on our market, but few still use factoring. According to the data of the Polish Factors Association, in 2013 this form of financing was chosen by less than 5.5 thousand. companies. However, the interest in factoring is clearly growing, as the turnover of factoring companies reached USD 131 billion last year and was 16% higher than a year ago.

The benefits of cooperation with a factoring company are not only related to the fact that it will transfer the receivables of its contractors to the company’s account even within 1 day (maximum a few days) from submitting the invoice. Before signing the contract, it will also scan individual recipients in terms of their solvency, and during cooperation will maintain accounts of debtors, monitor repayment of liabilities, and in the absence of payments on time – carry out activities aimed at recovery of receivables.

Who will bear the financial consequences, but if one of the contractors turns out to be insolvent? It depends on the type of factoring contract. In the case of full factoring, the factoring company assumes the risk of contractor’s insolvency, in the case of incomplete factoring, it remains with the entrepreneur using this service. Incomplete factoring is the option chosen more often in Poland because it is simply cheaper.

How much does factoring cost? Unfortunately, this type of financing often turns out to be even more expensive than credit. The factor charges a commission, usually around 2-4% of the gross value of invoices covered by the contract. The cost is also the interest in the financing granted, payable in arrears (more beneficial solution for the entrepreneur) or in advance.

Specific values ​​are negotiated individually and depend on the value of the invoices transferred to the factoring company. The minimum and maximum limits are specified in the contract. You should definitely pay more attention to their issues. Setting too low a limit may prove insufficient to meet the needs of the company, while too high will result in generating unnecessary costs.

Debt collection – not guaranteed repayment date

Debt collection - not guaranteed repayment date

We can use factoring only if we have a portfolio of customers who pay invoices on time while having access to funds before the payment date. However, what if we did not use this option and we are ready to wait for the receivables, which, however, do not reach the agreed deadline? The problem in the form of unregulated, overdue payments concerns many companies. It is possible that you will have to turn to debt collection companies for help.

However, it is difficult to consider debt collection as a sure way to improve financial liquidity, as there is no guarantee as to the date on which unpaid debts will reach the company’s account. Sometimes it is enough to contact the debt collector and the receivables are settled quickly, in the most difficult cases it may be necessary to go to court, wait for his judgment and then for bailiff enforcement.

The services of debt collection companies are also not the cheapest. The remuneration depends primarily on the period of limitation of payments, as well as the scope of activities of the debt collector and ranges from a few to even 30 percent. receivables.

Mortgage for home renovation can be twice as cheap as cash

The most common method of financing the renovation of a house or apartment is a loan. To buy an apartment, we take a mortgage and take a separate cash loan for renovation.

We often plan to put aside funds that we want to spend on the device or minor repairs at home, but in fact, we are still asking for help from the bank because we want to get rid of the problem as soon as possible.

Home renovation loan – cash loan

Home renovation loan - cash loan

Why do we most often reach for a cash loan? Because home mortgages are still not so popular. In addition, the time to get a cash loan is much shorter than for a mortgage. The difference is significant – when deciding on the first option, we have to wait a maximum of 2 weeks, and with the second option the waiting time is up to 3 months.

What else can speak in favor of cash loans? Certainly, the fact that you can take a cash loan for any purpose and bank will not require you to provide invoices or proof of purchase.

In addition, the amount of documents needed when applying for a cash loan is much smaller and is practically limited to one – earnings certificate.

Advantages of cash loan for home renovation:

  • no loan collateral is required,
  • short credit time,
  • loan for any purpose,
  • the minimum number of documents needed.

The great advantage of cash loans is that the property you want to take out for does not have to be your property. This can be particularly useful when the apartment belongs to, for example, your partner, and you only want to financially support his device.

Home renovation loan – mortgage

Home renovation loan - mortgage

A mortgage for the home renovation can, under certain circumstances, be more profitable than a cash loan. This is because the interest rate for such a loan is much lower than for a cash loan. The difference we are talking about can reach as much as 6%!

In addition, hardly anyone knows that a mortgage for a home renovation can be taken for a very long period, e.g. 30 years. This means that the monthly installment spread over such a long time will not be too much of a burden to our home budget.

This is an extremely big advantage because, with a large loan value (maximum 60% of the property value), the monthly installment will not be USD 2,000, only about half of it. It is also worth familiarizing yourself with the topic of how to take a mortgage step by step, which will help to dispel any doubts.

Advantages of a mortgage granted for a house renovation:

  • maximum loan amount (for a property worth at least USD 350,000, the maximum mortgage amount will be higher than for a cash loan),
  • credit length,
  • low-interest rate.

A mortgage with the renovation – is it possible?

Mortgage with renovation - is it possible?

Banks allow you to combine a mortgage to buy a home with a mortgage for refurbishing your home. However, remember that a mortgage plus renovation may not always be a good option. When combining two products with each other, banks will require a larger down payment.

Most often, the amount of the contribution is calculated jointly for the purchase of real estate and renovation purposes. This means that when deciding to buy an apartment whose value is 250 thousand. USD and matching 50,000 USD, which we allocate for renovation purposes, we will have to accumulate with a 10% own contribution of 30 thousand. USD (25,000 for the purchase of an apartment and 5,000 for renovation).

However, if the bank requires a 20% own contribution from us (the most common scenario), then we will have to put up as much as 60,000. dollars.

Increasing Installment Housing Loan

Capital income in Turkey is 10 thousand US dollars per capital, is to create a table so optimistic compared to developed countries. According to data, when national income expenditures are analyzed, it is seen that a ratio of 26.7% is reserved for food and beverage only. On the other hand, a very small proportion of 10% is furniture and home appliances, housing, water, electricity, gas and other goods and services. When these rates are taken into consideration, the chances of consumers to own a house are very low. Because the majority of the income is spent on basic conditions in Turkey owned supplies.

Consumer’s average income 

money

A consumer with an average income may receive a negative response from any bank he / she will go to apply for the loan he / she needs to own a house if he / she does not have an additional income. To illustrate; A consumer with a monthly income of 2000 USD is unlikely to buy a house in the near-center districts of Istanbul. For the house with a price of 100,000 USD, the maximum loan that the bank can give you is 75,000 USD. Payment amounts for a loan of 75,000 USD;

  • 1,600-1,700 USD for 60-month housing loan
  • 1.050-1.200 USD for a 120-month housing loan
  • 800.00-900.00 USD for 240 months term housing loan.

 

Get a mortgage loan

Get a mortgage loan

It seems difficult to get a mortgage loan for a house of high value with a salary of 2,000 USD from the above data. Because the loan installment should not exceed 40-50% of the monthly household income. So, how can you be a host under these conditions?

With your monthly salary of 2,000 USD, you can make an increasing payment plan and arrange your loan installment according to the increase in your salary. To illustrate; When you prepare the amount of credit you have applied for 75.000 USD with 180-month increasing payment plan, you can configure the installment amount you will pay in the first three years around 690, 730 and 760 USD. With this payment plan, compared to the increase in your annual salary, the amount of installment you pay will increase. Your dream of owning a house like paying rent can be realized with this plan.

leading housing loans in Turkey consulting firm Father Brown, the right loan that fits your budget, trying to find independently from banks, our consultants throughout the supply of credit can help you and can answer your questions all.

 

Short-term loan – what is this offer?

Loans can be divided into three main categories. Few people know that banks are dealing with short-term, medium-term and long-term loans. What is a short-term loan? The name itself may indicate the conditions with which it is incurred.

We can obtain such a cash loan for a period of up to 1 year and it is usually granted in a small amount. The above-mentioned short-term loan is nothing other than payday loans we all associate, or loans for any purpose, e.g. for buying a car, for renovation, or a loan for a dream holiday trip.

This type of offer is not without reason chosen more often by Poles, and really favorable conditions of the loan agreement play an important role here. Thanks to this, we can quickly obtain the funds we need, which we often need almost immediately.

Short-term loan – for how long can it be taken?

Short-term loan - for how long can it be taken?

We already know how long the short-term loan lasts maximum. We can enlist him for no more than a year. However, such a long time is not necessary at all, because looking through the banks’ offers in 2019, we can see that the services are really diverse.

For example, we have a loan with a minimum monthly, 3-month or 6-month period, depending on the bank selected. Therefore, it is not imposed that a short-term loan must be repaid throughout the year.

In a situation where we need, for example, urgent cash to buy equipment, and we know that in a month we will receive a salary, from which the funds will easily cover the loan, we can use the loan service for 1 month.

What are the rules for granting short-term loans?

What are the rules for granting short-term loans?

Short-term loans granted by banks are very different from payday loans which we take out in loan companies. However, in both cases, in order to be able to submit an application, we must meet several basic conditions, which are:

  • Majority;
  • Polish citizenship;
  • Living in the country;
  • Valid ID card.

Taking into account the short-term loans granted in banks, it will also be necessary to meet several issues that are always checked by these institutions. First of all, we must have creditworthiness, which, fortunately, for loans with short repayment periods is not so difficult to obtain.

These types of loans typically take between 1,000 and 3,000 dollars, which is why most people who take up employment or get various types of benefits will be able to pay off such an obligation. Another issue is for banks to check the most important databases, which is necessary to determine our credibility.

The Credit Checker database plays a key role here, whereas you know – our credit history is recorded. Check how to build a positive story in a Credit Checker. If we took out loans or credits before, the bank will have access to all information about them, i.e. timely or late repayments and debts.

How do you increase your chances of getting a cash loan?

How do you increase your chances of getting a cash loan?

The KRD register is also important here, in which all indebted persons are listed. In this situation, unfortunately, we will not have a chance to receive a short-term loan even in the minimum amount. To increase the chances of getting a loan from a bank, we must first ensure that we do not have debt.

However, for people who are a debtor or have a bad history at Credit Checker, the aforementioned non-bank companies that offer payday loans or loans come to the rescue. Such financial liabilities also take the form of short-term loans, however, they are granted by non-bank institutions.

These companies are based on different principles than banks, which is why getting such financial assistance is much easier. First of all, the above-mentioned bases are not taken into account, thanks to which even persons with a bailiff and clients with a bad history in Credit Checker have a chance for a short-term loan.

Is it worth insuring your loan against job loss?

By thoroughly analyzing what is loan insurance against job loss, we come to the conclusion that it is nothing but a policy that is offered by insurance companies or banks, addressed to entities that have liabilities in the form of credit.

In practice, what does credit insurance mean against job loss? This is a form of security that guarantees the entity liquidity in paying off its debts to the bank. Loan insurance against job loss protects the borrower when he is threatened by loss of income source and financial liquidity due to job loss.

Insurance against job loss means that if we do not have adequate financial means, the insurer repays the loan installments for us. The number of installments repaid by him depends on the provisions specified in the contract. Therefore, unemployment insurance is a very attractive form of protection and customers are happy to use it.

Mortgage insurance against job loss

money

In practice, unemployment insurance is most often combined with a mortgage. Mortgage insurance against job loss takes a voluntary form.

However, banks can offer this insurance as part of a larger insurance package, which is part of a consolidation or mortgage loan, or as an independent product, it all depends on their offer.

If you have decided on a mortgage, unemployment insurance may be the best solution if you haven’t built up the so-called financial cushion that could constitute our financial reserves in the event of loss of income.

How does job loss insurance work?

cash

When looking at the mechanism of how unemployment loan insurance works, it is worth remembering that depending on the banking regulations, it can be used by people who are employed under an employment contract. Analyzing the concept of loan insurance against unemployment is collateral in the event of loss of employment.

When signing the contract, pay attention to the provisions, as insurance coverage may apply temporarily. Do most readers wonder what the unemployment insurance offers?

Such insurance consists of that after 30 days from the day on which we were dismissed from work, the insurer will start paying off the installments related to our credit obligation until we start a new job.

It is worth remembering that in most cases we will not receive insurance payments when we voluntarily quit our work. Therefore, termination of the employment contract by mutual agreement does not allow us to apply for payment of unemployment insurance benefit.

This benefit will also not be granted to the borrower who, when conducting a business activity, closes the company, which will result in the loss of his income.

How much is loan insurance against the loss of a job?

money

How much does the loan insurance against loss of job cost depend on the bank’s offer, the terms of which are usually very different? However, in the case of cash or installment loans, insurance against loss of income can be very expensive.

Insurance coverage for loan repayment can reach 4-5% of the total loan value per annum. People who are wondering how much it costs to pay mortgage insurance against loss of job must take into account that hedging the risk of income loss is valued at 1-1.5% of the entire loan per annum, and even 3.25% of this amount for a period covering 4 years.

With this type of collateral, it is worth remembering that banking institutions are eager to reduce their customers’ margins and reduce the value of the commission for granting a mortgage, which is an additional simplification.

Payment of unemployment benefit

cash

If the insured meets all the conditions set out in the unemployment insurance contract, the insurer will take over the obligation to repay his credit obligations. Depending on the contract, this is usually a 12-month period. However, if the borrower does not find work during this time, he will have to start paying himself.

The amount of our credit installment may be an additional obstacle. If it is too high, for example for the amount of USD 8,000, then the policy may be too low to fully cover the installment of our liability.

However, this is not the rule. There is also a reverse situation, where the policy has been structured so that it will be possible not only to pay the loan installment but also to cover the costs associated with maintaining the property.

An important issue in insurance against job loss is the grace period. Depending on the provisions of the contract, this means that the policy will become effective only for some time after its conclusion.

As a rule, this period is from 60 to 90 days. If the borrower terminates his employment relationship before the grace period expires, he will not receive assistance in the form of repayment of loan installments.

The Importance of These 4 Things Before Conducting Online Loans – Online money loans specifically for employees process fast, easy and competitive interest

Prohibition of the Financial Services Authority (OJK) against official online loan organizers to access contact lists, personal files from the user’s mobile phone are set in POJK 77/2016 and POJK 18/2018 concerning Consumer Protection in the Financial Services Sector. An appeal to make a loan at a company that has been registered and officially has already been done to consumers, here are a few suggestions so that the loan does not lead to a bump:

 

Check Online Loan Companies Registered at OJK

Check Online Loan Companies Registered at OJK

Borrow For Earning Needs Pay Attention to Your Installment Expenses Do Not Exceed 30% of Your Income. Borrow for productive needs, not consumptive, and not exceed 30% of income so as not to burden. Consider dependents or other installments that must also be paid.

 

Pay Installments Long Before Maturity

Pay Installments Long Before Maturity

Pay in installments on time to avoid swelling fines. In order not to forget to pay, install a calendar alarm on your cellphone or put a calendar on your home or office.

Avoid Digging the Hole Cover the Hole. Don’t repay loans with new loans to avoid getting into debt. Make paying installments a top priority after receiving a salary.

 

Learn Interest and Loan Fines

Learn Interest and Loan Fines

Before Borrowing Learn and survey the interest and penalties offered in advance. Choose an online loan that offers the lowest interest and penalties to make the payments easier.

 

Read the Contract Agreement

Read the Contract Agreement

Carefully read the contract offered, and ask questions if it isn’t clear. The rise of online loan companies aka borrowing money that provides high interest loans is also a concern of the Financial Services Authority (OJK). OJK’s Director of Licensing and Supervision Arrangement of OJK Hendrikus Passagi said that currently there are key features that the public must know in order not to become victims of illegal fintech. The main thing is that they provide very high interest loans to the billing process that is not fair.

Ethics of Debt Collection by Debt Collector

Are you currently facing problems with arrears from online loans? If so, of course you are getting familiar with phone calls or visits from debt collectors or the loan collector of the lending company.

Many people are scared when they are often contacted by debt collectors. Not only the borrower, sometimes the debt collector also contacts a family member or directly goes to the borrower’s home in trouble. Disruption of comfort due to debt arrears is a consequence of your inability to repay a loan. However, consumers also have the right to get protection from outside treatment by debt collectors. The following ethical guidelines that must be obeyed by debt collectors when conducting billing.

 

Official Identity of the Lending Company

Debt collectors always carry an official identity card issued by the owner of the lending company. If the debt collector who collects does not have an official identity, immediately contact the company where you took the loan.

 

Use of threats / violence / humiliation is prohibited

Debt collectors are prohibited from using threats, violence and / or actions that are embarrassing to customers who have bad repayments. If a debt collector who calls or meets you issues threats, violence or embarrassment, remain calm and remind the debt collector not to violate billing ethics in accordance with Best Bank regulations. Record the identity of the debt collector along with the day and hour of the event as supporting information when you report the case to the loan provider.

Using Physical or Verbal Violence is prohibited. Billing is prohibited using physical or verbal coercion. If this happens, report it immediately.

 

No Collections from Unpaid Debt Parties

debt loans

Debt collectors are prohibited from billing other than those who owe. Debt collectors are not permitted to collect debts from other parties such as close relatives or other people whose data are listed in the administrative provisions that you attach when taking out debt. You can cast a protest if the debt collector is also chasing your family related to the debt problem.

 

It is strictly forbidden to terrorize

debt loans

Billing using communication facilities is prohibited from being carried out continuously which is annoying. If the debt collector collects by phone, it should be done at certain times and not throughout the day. If you feel disturbed by the relentless calls from debt collectors, immediately notify the company that provided the loan.