When is the best time of year to get my loan?

Every tough guy knows: nothing better than taking advantage of New Year’s Eve sales, right after Christmas. Or buy chocolate eggs only after Easter Sunday has passed. In fact, experience teaches us that when the goal is to save money, there is a right time for everything. As proof, just think of that friend who always enjoys promotions when traveling outside of school holidays. But when it comes to credit, have you ever wondered when is the best time of year to get your loan

As with all other aspects of life, here at Astro Finance we believe there is a perfect time to commit to loan repayments. However, it has much more to do with your planning than specific dates, as we will see below. Know what to consider when deciding!

After all, is there a date when interest rates are most advantageous?

interest loans

As a general rule, price changes occur according to the law of supply and demand. That is: the more people interested in a product or service, the more expensive it tends to become. That’s why going to the beach on a long summer holiday is often much more expensive than going on the same trip on an ordinary spring weekend. Similarly, the price of drinks goes up during Carnival and so on.

In the case of loans, although it is common to hear about loans at certain times – such as at the beginning of the year for tax payments – they are required all year round. But not only that! In fact, interest rates are calculated based on several other factors. These include the loan repayment term and the risk of default, which changes not only from customer to customer. And also according to the moment of each one. For example, applying for a credit when your credit score is high is more advantageous than applying for the same loan when it is negative.

Answering the question, there is no specific date of the year when interest rates are most advantageous. The best time to apply for credit is one that conforms to your planning and current financial situation.

Tips for finding your best moment

money loan

To say that there is no period of the year when rates are most advantageous is different from saying that there is no ideal time to apply for a loan. In this sense, of course, nothing prevents you from doing a simulation at your leisure. However, in order to get the most out of credit as well as to ensure timely repayment of payments, we have separated some situations in which the loan becomes really advantageous.

What is the best time of year to get my loan? When you know exactly what to do with money

In general, when we apply for a loan it is because we have a goal in mind. How to get out of overdraft, clear your name, make a home makeover, pay for school or travel with your family on vacation. But before applying for credit, it is important to do the math and ask yourself how much exactly you need and how (and when) you will apply that money. Otherwise, you risk insufficient money to get your plans off the ground. Or the other way around: you pay interest for nothing for money you didn’t need right now.

What is the best time of year to get my loan? When you plan to pay installments

money loan

Thinking of the tip above, the best time to get a loan is when you need and know what to do with it. But it is not in use using credit to clear your name and then wind up with the bills again, delaying the payment of installments. So if you think the loan may be the answer to your problems, the first step is to define how much you need.

Then set up a financial control worksheet, see how much money you have left each month, and ask yourself how long you are likely to continue with the same expenses and expenses. Are you in a stable situation and there are no big expenses ahead or will you be able to afford them smoothly? In this case, the amount of installment should be less than the balance in your account. Remembering that you can always use the spreadsheet to find out where you can save.

When is the best time of year to get my loan? When you have already compared several loan offers

money loan

Let’s say you already know what you want to do with the money, have done some financial planning and found a loan with installments that fit right into your pocket. No doubt, this is the best time to close your loan, right?

This can be as long as you have researched it before and make sure it is the most beneficial option in terms of time and CET. After all, as much as the monthly fee fits your budget, it is very bad to pay more for something that could have been cheaper. Therefore, research long before closing a proposal.

Enjoy you are here at Astro Finance and use our platform to get a simulation and receive up to 10 pre-approved credit offers! With a little research and planning, you can make your dreams come true or get out of debt.

Credit repurchase: the gift vs money problems.

Who are you, the generous donor? The Good Finance Group, this organization created by major associations and social and humanitarian foundations with the aim of preserving and developing a relationship of trust with their donors, is trying to paint a robot portrait of these French people who carry out donations. And guess what: trust is important.

Almost one in two French people donates each year

Almost one in two French people donates each year

For more than six out of ten respondents (62%), it is the lack of confidence in the use of funds that encourages them not to donate to an association or a foundation. This is the major teaching of the Good Finance Group 2019 edition. Confidence therefore takes precedence over the lack of money (57%) and the feeling of already contributing through taxes (36%). Almost half of French people declare themselves donors (44%): the addition of regular donors (20%) and occasional donors (24%). But who are they?

CSP- give the least

CSP- give the least

The most regular donors are mainly people aged 65 and over, from CSP +. They consider themselves very privileged, committed and united, and they trust associations and foundations. Among casuals, very present among 18-34 year olds, the feeling of anxiety is more present and confidence is not blind.

The “non-donors” are mainly CSPs – animated by a feeling of revolt, who display the feeling of being part of a minority a total lack of confidence in the institutions. A third of those questioned doubt that the money raised really serves the cause, and three in ten believe that there are too many scams, embezzlement or uses for personal gain.

Tight budget doesn’t help

Tight budget doesn

If trust is the driving force behind donors, the lack of money remains a blocking point for an entire population. For many French people, it is the repayment of debts which is the priority, with the threat of over- indebtedness which hovers when one is engaged on several loans.

A family who wishes to become an owner and where the two spouses purchase their vehicle often has to take out several loans: a mortgage, a car loan, to which can be added another consumer loan to deal with an unexpected bill. or when changing household appliances.

For these households whose remaining living is limited, the repurchase of credit can help to find a room for maneuver in the daily budget. By extending the duration of credit, the grouping of loans makes it possible to reduce the amounts paid each month for their repayment, and thus reduce the anxiety of the bank overdraft.

Credits: what is the profile of people in debt situation?

In its survey of people in over-indebtedness, the Best Bank presents a portrait of people who have filed a file .

In 2016, they are less numerous since their number decreased by 10.6% over one year. Find the detail in our article.

Who are the people affected by over-indebtedness?

Who are the people affected by over-indebtedness?

Mostly, “over-indebtedness situations concern single people , without any capacity to repay in more than one out of two cases”, according to the bank.

Who are they ?

  • Widowers, single, separated or divorced represent 66.1% of the files. The average age observed is between 45 and 54 years for 26.8% of cases.

  • Tenants are the most affected by over-indebtedness with a high share of 76.3%. Conversely, owners were 8.3% in 2016, a figure up compared to 2011 since they were 6.1%.

  • The average amount of debt was 27,481 USD in 2016 , a decrease of 1,024 USD compared to 2011 (excluding mortgage).

  • They are mainly employed (33.9%) or manual workers (23.6%).

  • 28.7% are unemployed, up from 2011 (25.6%).

  • 1 in 2 (52.1%) does not have the capacity to repay debts at all.

“Furthermore, it appears that 51.1% of over-indebted households have resources strictly below the minimum wage and 14% of them (10.6% in 2011) have resources below the RSA for two people. “

Credit consolidation to reduce the debt ratio

Credit consolidation to reduce the debt ratio

The restructuring of debts or the repurchase of credits makes it possible to reduce the household debt ratio linked to the accumulation of loans. The repurchase of credit can take various forms: the repurchase of consumer credits or the repurchase of mortgage credit , that is to say with a mortgage.

When the debt ratio is too high (property debt, excessively high charges, consumer credits, etc.), the loan repurchase makes it possible to group all the loans into one in order to reduce the debt ratio . The borrower has only one rate and only one monthly payment to pay.

Mortgage: a very dynamic first half for the market

+ 10%! Yes, the number of projects financed by increased by 10% in the first half of 2017 compared to that of 2016. If this figure implies that the real estate market is doing well, it remains to qualify. 

Rising property prices penalize borrowers

Rising property prices penalize borrowers

Recently, in our study on real estate purchasing power we revealed that real estate prices had increased significantly in most French cities. It turns out that this price inflation is responsible for over 70% of the increase in monthly payments by borrowers in 6 of the 11 largest cities in France .

If borrowing rates have made it possible for the past 3 years to boost the real estate market due to their significant drops (particularly during 2016), this leverage is starting to run out of steam. Indeed, credit rates, although still very low, have increased since the start of the year.

So yes, the first half of 2017 was dynamic ; however, transactions should decrease slightly in the short term , between – 2% and – 5% in the second half.

What prospects for the second semester?

What prospects for the second semester?

Recall that 2016 was an exceptional year for the real estate market: relatively stable prices and historic drops in lending rates boosted sales . More borrowers have access to property.

In fact, comparing 2017 to 2016 is not an easy task and may seem unfavorable. Moreover, if last summer had presented record figures , this summer should rather be “normal” for the market. Whether it be from a demand or a credit rate perspective, the summer season is usually a standstill period .

As for back to school ? The question is whether or not banks will have reached their objectives by the end of the summer and therefore will be inclined or not to lower (or if not, increase) their interest rate scales . In addition, the latest regulations impacting bank margins should also play in the balance.

What about loan renegotiations?

What about loan renegotiations?

Mortgage renegotiations represented a significant share of market transactions , especially in recent months thanks to record real estate rates . The activity is starting to run out of steam. Indeed, the volume of renegotiation intentions is in sharp decline and returns to levels known before the second quarter of 2014. The volume of intention was 38% in September 2016, when it is only 11 % in May 2017.

Holiday credit rates: the lull is in sight!

 

The month of June was synonymous with increases, temperature certainly, but also mortgage rates. A trend which should however subside with the summer holidays.

Regular scale readjustments

Regular scale readjustments

Banks are in the habit of changing their credit rate scales at the end or at the beginning of the month. But change of rule this time with readjustments once, or even twice a month depending on the banking organization. Only one establishment maintained its June scales for the month of July.

What about rates?

What about rates?

We note for the average rates increases of:
– 5 cents over 7 and 10 years,
– 15 cents over 15 and 20 years,
– 20 cents over 25 years,
– 10 cents over 30 years.

Despite these increases, ” credit rates remain very attractive, ” says Chris Banjo, Director of Communication and Borrowing Studies. Banks thus offer an average of 2.25% over 15 years, 2.55% over 20 years and 3.20% over 25 years.

What changes in rates for this summer?

What changes in rates for this summer?

Summer vacations require, rates should freeze. Unless, of course, if conclusions concerning Greece affect the OAT, the rate at which banks borrow. An increase in the latter would then directly impact lending rates to individuals.

Aside from this scenario, it is only at the start of the school year that changes should be implemented. Developments that are difficult to predict : despite the upward movement, the banks could still grant reductions either to catch up with their commercial targets for the most behind or to prepare for 2016 for the others.

Banks will, of course, always be very dynamic in terms of mortgage loans. It is an essential tool for attracting new customers.

Increasingly selective banks?

Increasingly selective banks?

Banks apply a policy of rate hikes but also of increased selectivity. The influx of applications in recent months has indeed pushed them to tighten their criteria, in particular by applying specific scales according to customer profiles.

In this context, having recourse to a broker allows you to optimize your file and thus to increase your chances of obtaining a loan. In addition to income, selectivity is based on age, the development perspective or the profitability of the relationship.

“We must not forget that the borrower can also choose his bank! So don’t forget to negotiate the rate offered by your bank while looking for more attractive competitive offers.

Take advantage of our expertise at the best rate, it’s easy and free! from 0.66 % * over 15 years

 

The installment loan – extremely popular, especially as online installment loans

An installment loan is a loan granted by a bank or credit institution to private individuals. The loan amounts to a predetermined amount that is repaid in fixed monthly installments. The installments include an amount that serves to repay the loan and a certain rate of interest that is also recorded when the contract is concluded. Depending on the contract, fees may also apply, which the bank may charge in addition to the interest. It is common to offer an installment loan for loans with amounts between 500 and around 75,000 dollars. The terms are very variable and can be between 12 and even 120 months.

An installment loan is often referred to as a consumer loan or a purchase loan because it is usually about making a specific purchase for which the total amount is not available at once. Many credit institutions name their offers for installment loans according to the goods to be financed, for example there are car loans, furniture loans and loans for electrical appliances. In Austria, the terms counter credit and term loan are also used, whereby all of these terms refer to installment loans.

Installment loan – a popular banking product

Installment loan - a popular banking product

Installment loans have been in Germany for more than 60 years. Today, virtually all banks and credit institutions offer installment loans, with auto banks specializing in vehicle finance. The consumer credit law regulated the granting of installment loans to private individuals until 2002. The law on modernization of debt law has been in force since 2002. In the past few years, installment loans between 130 and 140 billion dollars have been granted annually in Germany. The tendency is increasing. Installment loans are one of the most common forms of credit and are usually given in the form of a blank loan. This means that the borrower does not have to provide collateral. Proof of salary or wages is usually sufficient to apply for an installment loan. Banks are only required to provide guarantees if the borrower’s creditworthiness cannot be adequately proven. When financing vehicles via a so-called car loan, the financed vehicle is usually accepted as security. But many institutes today also do without this security transfer, because that makes the financing procedures easier and easier.

Installment loan procedures and procedures

Installment loan procedures and procedures

An installment loan is repaid in installments that are paid monthly and are always the same amount. These installments always include a redemption portion and an interest portion. The interest for an installment loan is slightly higher than the interest for a construction loan, for example. However, installment loans are usually cheaper than overdrafts. Many institutes charge processing fees between 2 and 3.5 percent, which are, however, to be paid once. Some of these processing fees are still being discussed in court and have already been found invalid and unlawful in several cases. However, a final decision from the Federal Court of Justice is still pending because all revision proceedings have so far been withdrawn by the banks, probably for fear of the result. It is often required that residual debt insurance is taken out in addition to the installment loan, which creates additional costs for the borrower.

Interest on the installment loan

Interest on the installment loan

The amount of interest depends heavily on the creditworthiness of the respective customer and is usually defined very individually. Various direct banks offer cheaper interest rates than branch banks do, but the branch banks are catching up here and simplifying their procedures to such an extent that they too can keep up with the offers of the direct banks. Each contract of an installment loan must include the effective interest rate so that the customer can see the real loan costs. Interest rates also vary widely depending on how long the loan is for. If you pay the money back faster, you pay less interest. Various installment loans end up costing up to 30% more than the actual amount. In some cases, however, it can be advantageous for the customer to pay only very small amounts over a very long period.

Regulations and laws on installment credit

Regulations and laws on installment credit

An installment loan is usually reported to Credit Bureau. An installment loan can be canceled by the borrower after a period of six months has expired. Then a three-month notice period will take effect. Prepayment penalties are not due. However, the bank does not have to reimburse the processing fee and may also charge a termination fee. However, this must not be arbitrary and must be specified in the contract. Since mid-2010 there has been a new EU directive dealing with installment loans. It states that all borrowers can terminate and repay their loan contracts without giving notice.

However, the EU directive grants the right to a prepayment penalty. The amount of this compensation is limited to a maximum of one percent for contracts that have a term of more than 12 months and half a percent for contracts that have less than 12 months remaining. Of course, the bank also has the right to terminate the loan agreement. However, this only if the borrower has not paid at least two successive installments, or has paid it only in part or with delay, and if at least ten percent of the total amount is outstanding at the same time. For contracts that run for more than three years, this limit is set at five percent. The bank must also have sent a third reminder with the threat of termination and must adhere to a two-week period. The fact that banks charge fees for changes in the loan agreement is common. Depending on what is stated in the contract, special payments are permitted or only possible for a fee. Some banks allow changes to be made free of charge.

The customer should check his contract carefully in advance. In addition to the EU regulation, the German Civil Code BGB regulates the granting of installment loans to private individuals in Germany. General rules can be found in Article 488. Article 489 provides information on termination and Article 495 deals with the fact of the opposition. A loan contract for an installment loan must always be in writing.

Joint credits: what happens in the event of a divorce?

In the event of a divorce, one of the issues to be resolved is the division of property and credits contracted by the couple. How to do it and what solutions are available to you? The loan problem comes into play and can sometimes require a grouping of credits to accompany the new situation of two ex-spouses.

Take inventory of active and passive assets

Take inventory of active and passive assets

The first step is to draw up an exhaustive inventory of the heritage common to the couple. Movable goods, real estate, credits, debts…. Everything should be listed, listed and communicated to your lawyer. If you are married under the “separation of property” regime, so-called undivided property, that is to say property acquired jointly, is also concerned by partition.

Which credits are affected?

Which credits are affected?

The credits that can be shared are called “household debts” that is to say that they were either contracted during the marriage or that they were used to finance the life of the household (furniture, children’s studies, car, etc.). Personal loan, revolving loan, bank overdraft all these credits are to be taken into account. If a mortgage has been contracted, it will depend on the fate reserved for the property. If it is sold, the immo credit can be reimbursed and the excess distributed between the two spouses, if one of the two keeps the property, it will take sole responsibility for the repayment of the installments.

Share credits

Share credits

During a divorce by mutual consent, it is possible to agree on a distribution of credits. There are two solutions for this: either distribute the credits and each will take care of one or more credits after the divorce alone, or pursue a common and fair repayment according to each person’s income. All this must be clearly indicated in the Divorce Agreement.

Pay attention to the principle of solidarity

Pay attention to the principle of solidarity

The principle of solidarity between spouses is very simple: when one of the two spouses contracts a credit or a debt, the other spouse is automatically united. In other words, each must repay the credits and debts contracted by the other in the event that the one who contracted the debt can no longer repay it. This principle is also valid even if the Divorce Agreement grants this or that credit to one of the spouses. If you wish to disengage from a loan, the solution may be to repay it in full in advance.

If your means allow you of course! The other solution to reduce your debt ratio is to buy back credit to group your different loans into one : this allows you to combine the monthly payments into one, and especially to reduce the amount for not be taken by the throat in his daily budget. The repurchase of credit smoothes the amount to be reimbursed over time to allow to benefit from a breathing.