Dry Relay Loan: Rate and Calculation of the Cost of Credit

Operation

We speak of dry relay loan when it is not associated with a depreciable credit. It is then the only loan participating in the purchase of housing. Its duration is identical to a classic relay credit, ie two years maximum.

This situation arises especially when the estimated price of the old dwelling, possibly increased by the personal contribution is higher than the estimated price of the new property. It must be admitted that this situation is rare because most borrowers want to buy a larger home and therefore more expensive.

Rate of a dry relay loan and cost of credit

Rate of a dry relay loan and cost of credit

In general, the rates of dry relay loans are higher than those of the redeemable credits, the interest not running for a sufficient duration (sometimes only a few months) for the operation to be profitable for the bank.

As for the refund, it is done as for a credit in fine. That is, the borrower only pays the interest back to the bank.

Only when the property is sold will it repay the borrowed capital.

The cost of credit depends of course on the duration and therefore the date on which the property will actually be resold. The table below shows how much a bridge loan can cost the borrower money.

  • Amount: € 150,000
  • Rate: 4%
  • Monthly payment excluding insurance: 500 €
Date of completion of the sale Amount of interest
2 months 1,000 €
6 months € 3,000
10 months € 5,000
18 months 9 000 €
2 years € 12,000

As can be seen, if at the end of the two years, the property is not sold, the buyer will have paid € 12,000 in bridge credit interest to the bank.

Case of the total franchise

To avoid that the monthly installment of the bridge loan is added to that of the current loan on the old housing, some banks offer a total deductible interest. Let it be clear that they do not propose to cancel interest payments. They only propose to defer payment until the date of sale.

Warning

While this solution may prove useful in some cases, it only increases the cost of credit.

Calculation of the amount

Calculation of the amount

There are two methods of calculation to determine the amount according to the bank to which one is addressed. Let’s take the example of a house whose price is estimated at 200,000 € and let the remaining capital be 50,000 €.
We will leave on a dry real estate leasing rate of 70%.

Applying a percentage of the balance to the borrower

The first method is to first calculate the amount that will be left to the borrower once the credit is repaid:

€ 200,000 – € 50,000 = € 150,000

In a second step, we apply the percentage, which gives:

€ 150,000 X 70% = € 105,000

Applying a percentage on the estimated price of housing

The second method is to directly apply the percentage on the price of housing for sale.

€ 200,000 X 70% = € 140,000

We then subtract the current loan, which gives:

€ 140,000 – € 50,000 = € 90,000

As can be seen in our example, the first method is more advantageous and allows to obtain a loan amount relay dry higher than 15 000 € to the second method.

Where to find a dry relay credit?

Where to find a dry relay credit?

Negotiation will not pose any particular difficulties if you go to your own bank. On the other hand, if you want to play the competition, it will be more delicate. Indeed, banks need to offer real estate credit to win new customers over the long term.

The latter generally require the opening of a bank account and the domiciliation of income. However, a bridge loan is repaid upon resale of the property and the bank knows that in such a case, it will not have enough time to retain the borrower.

Steps To Know If I Have Debts With The Treasury: Microcredits And Personal Loans

 

 

If you are interested in applying for financing, as a freelancer or as a company, but you have the doubt of whether you are up to date with your payments or if you have debts with the Treasury, we will explain how to resolve the doubt and proceed with your request.

It is normal that sometimes we doubt whether we keep all our payments up to date or not. That is why it is important to review our financial situation from time to time and remember or find out if we have a pending payment or any debt to settle. In the case of debts with finance, if you think you can have any, you have two options to solve all the doubts:

Go to the nearest Tax Agency office

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The first thing you can do is go to the office of the Tax Agency that is closest to you or has been assigned to you before. Once there, what you should do is expose your case. It is advisable to request an appointment, as it is known that in these cases the wait is long and agonizing, so we also recommend that you arm yourself with patience. Once you have already presented your case and you are with the assigned manager, he will tell you whether or not you have debts with the finances and, if so, you can decide between deferring them and waiving financing from a credit institution. or pay them at that time and settle your debt with the Treasury.

Solve your debts with the Treasury through its website

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As an alternative, you can check if you have debts with finance through internet. For this it is important that you know well the operation of your web page. It is a very successful alternative if you prefer not to have to spend long waits in the offices of the Tax Agency. In addition, it is demonstrated that electronic files are resolved with greater agility than those that receive paper documentation through an ordinary register. If you have a digital certificate, you can solve all your doubts without leaving home, simply by using a device with internet accessing the website of the Tax Agency. What you must do in this case is to enter www.aeat.es and select “Electronic Office” and then select the “Consult debts” option. The information offered on this tab is related to the settlement key, apart from the tax in question, the total amount pending payment, the period and the situation in which the outstanding debt is.

In addition, if you decide to pay part or all of your debt, the website gives you the option to generate a letter of payment immediately by clicking on “Get payment letter. ” Once you see on the screen the data that will generate the aforementioned letter, you must select “Accept”, but not before reviewing all the information carefully. Once this step is completed, we go to the page where we are requested the payment method with which we want to settle our debt or part of it. What we have just explained refers to the process to settle a single debt, even so, in some cases they also allow you to generate the same payment letter for various accumulated debts. For this, what we must do is select “Obtaining payment cards” instead of “Get payment letter”.

The Internet allows the procedures to be considerably streamlined and to make things easier for everyone involved. Due to the fact that the payment card is valid only on the same day, it is much more efficient to perform the procedures online and avoid the interests that may arise from our delay, a problem that we encounter frequently when we go to the physical offices and we find ourselves with long waiting queues that stress us and hinder the success of the transaction.

Balance of 80% – Debts: Did You Know That They Can Be Reduced?

 

Example of a settlement and balance from € 74,500.00 to € 15,000.00

Transaction in Balance and Excerpt. What does it mean? We have already explained the meaning of balance and excerpt in another article. To put it briefly and in relation to the topic here discussed, we can define it this way: This is the agreement with which the parties, making concessions to each other, avoid or put an end to a dispute relating to a debt.

The creditor declares himself satisfied to receive a lower amount, without prejudice to the successful completion of the payments and the debtor, once the debt has been paid, will be free from all obligations towards him.

Stages of the transaction

Stages of the transaction

The first phase of the transaction develops with a proposal (written or verbal). If the proposal is accepted by the creditor, it produces an agreement (written or verbal) in which time, amounts and payment methods are defined. The payment in a single installment or in installments, depending on the agreement, will complete the transaction, which can be defined as completed, for the final or last payment.

The release letter, at the end of the operation, written by the creditor will serve to certify the successful conclusion of the agreement.

80% extraordinary transaction! From € 74,500.00 to € 15,000.00 in 12 installments!

Here you see how one of our customers, a sales agent for the matter, has solved with a transaction of a really significant amount. Our intervention allowed him to save as much as 80% of the amount due. He paid € 15,000.00 in 12 installments, instead of € 74,500.00. An exceptional transaction!

In general, such a high discount is obtained by paying in a lump sum, as we also explain balance and excerpt, how to pay less. With the help of third parties, he was able to address the problem that was consuming him and was able to proceed with his business of trading in food products.

Bankruptcy of debtor payments on a consolidation loan

The conditions for insolvency contravention of payments by the debtor on a consolidation loan were currently dealt with by the Superior Court of Appeals in Berlin:

According to section of the Insolvency Act, a legal act which the debtor has made in the last ten years prior to the application for insolvency proceedings or after this petition with the intention to discriminate against its creditors is contestable, if the other part is currently the act knew the intention of the debtor. This knowledge is presumed when the other party knew that the insolvency of the debtor threatened and that the act disadvantaged the creditors.

Objective creditor disadvantage

Due to the debtor’s payments to the creditor, the insolvency creditors were objectively disadvantaged.

A disadvantage within the meaning of Anso exists if the satisfaction of the insolvency creditors is shortened (reduced), thwarted, aggravated, endangered or delayed. It must therefore be stated that the satisfaction of the creditors is more favorable in the event of failure to comply with the contested act 1. These conditions are present here, because the payments to the creditor reduce the assets of the debtor and thus the creditors’ access to their assets has been thwarted 2.

Disadvantage of the debtor

The debtor acted in making the payments with the intention to disadvantage their creditors.

Disadvantage of intent is when the debtor, when executing the act, wanted the creditors to be discriminated against, or in any case recognized and approved them as a presumed consequence of his actions, even as an undesirable by-product of another intended benefit 3. If the debtor grants the counterparty a congruent cover, ie only what the claim was entitled to, then proof of the intention to disadvantage must be increased. In such a case, the debtor usually wants to pay only his debts. However, according to the settled case-law of the court, the debtor has then carried out the contested act with the intention of disadvantaging him if, at the time of its effectiveness was insolvent 4.

insolvency

insolvency

The debtor was insolvent at the time of the payments.

Insolvency is a debtor who is unable to meet the due payment obligations. Insolvency is generally to be assumed if the debtor has ceased his payments.

In the present case, the debtor had already suspended payments before the first payment because she was unable to settle the liabilities due.

According to the case law of the Federal Court of Justice, insolvency can be assumed if the liquidity gap of the debtor, which can not be eliminated within three weeks, amounts to at least 10% of its total liabilities due 5. These conditions were already given in April 2006, according to the stated low coverage ratio.

Once a payment has ceased, it can only be remedied by the debtor resuming payments altogether 6. This was not the case here.

Knowledge of the creditor of the deprivation of intent

A contestation for intentional creditor disadvantage according to § 133 Abs. 1 Anso further presupposes that at the time of the contested act the contestant knew of the intention of the debtor to discriminate against his creditors. This knowledge is suspected under sentence 2 Insolvency Act if the respondent knew that the insolvency of the debtor was threatened and that the respective act disadvantaged the creditors.

According to the case-law of the Federal Court of Justice, it is sufficient for the presumption of knowledge of the intent to deprive the opponent, if the opponent knows of circumstances from which the (imminent) insolvency follows without doubt with appropriate legal assessment 7. Knowledge of the impending insolvency is generally to be assumed if the obligations of the debtor in the subsequent contestant are not constantly compensated for over a long period of time to a considerable extent and the circumstances in which it is known that there are other creditors with unsecured claims 8.

The extent to which the claimant has been burdened with evidence and evidence 9 has not sufficiently refuted the presumption of knowledge of the intention to disadvantage. Nothing can be deduced from the purported loan commitment of € 300,000.00 by the parent company. Because the creditor has not commented on how secure the asserted commitment was and in what timeframe this should have been implemented.

Insofar as it is pointed out that serious remedial attempts would speak against a knowledge of the creditor of a creditor disadvantage intent, that is not to follow. It is true that a proper restructuring attempt can exclude the direct creditor disadvantage. However, this only applies if the remediation attempt – although identifiable by the debtor – involves risks, but the efforts to rescue the company are very much in the foreground and a positive prognosis seems reasonable and justifiable on the basis of concrete circumstances 10, Regularly, a coherent, on the individual case related restructuring concept is to be presupposed, that at least in the beginning already put into action and as a result on the side of the debtor at the time of the legal action serious and justified prospect of success within a reasonable time is justified 11. Such remedial attempts at the time of the December 2006 act are not substantiated here.

I made a loan and I did not pay. And now, what happens?

You made a payroll loan or a credit operation and saw that you will not be able to pay. The first question that goes through your mind, of course, is “I made a loan and did not pay… what happens now?”.

Failure to pay a debt has some consequences for the debtor. This text will explain to you exactly what happens now. Here are some of the consequences of not paying your loan.

Dirty name

Dirty name

If your question is “I made a loan and did not pay. And now? “, Know that if you let the debt due date pass you will receive a debit notification. Then you will have a period of 10 days to pay off the amount due.

After this deadline, according to the Consumer Protection Code (CDC), you may get the dirty name on the market. You will be denied in institutions such as the Credit Protection Service (SPC), Serasa or in notary offices for five years or more.

With the name dirty, your situation will become even more complicated. The banks and other institutions will know that you owe and, with that, will hesitate to offer you more lines of credit.

That is, it is like a snowball. You do not have the money to pay your loan, it gets its name dirty, and it becomes even more difficult to get funds to pay off your debt. The dirty name will also give you difficulties to rent a property, open a bank account or even make purchases on time.

Reduction of Credit Score and Score

Reduction of Credit Score and Score

A credit score is a rating calculated based on your credit history. Banks, financial institutions, and stores consult your score to decide whether or not to approve a credit request you make.

The Credit Score is another credit rating indicator, used as a parameter to determine the likelihood of you do not pay the loan contracted.

These indicators guide the assessment of financial institutions on the granting of a loan to you.

So, if you fail to pay off a debt, your credit score will be reduced. With this, you will have difficulty finding the same credit limits and deadlines that were previously offered.

So for those of you with the question, ” I borrowed and did not pay, and now?”, Know that your score has certainly declined.

Here’s how to increase your score.

Unwanted phone calls

Unwanted phone calls

When the installments of a debt are not paid for a long time, there is the possibility that the creditor institution sells the debt to another company. This new company pays a cash value to the current lender and takes over the debt for himself, with the right to charge the debtor.

This type of company works precisely with debt collections. Their methods include constant phone calls to your home and cell phone – on any day and at any time.

Until you settle the debt with this new lender, you and your family will continue to receive persistent collection phone calls. That’s because these companies are specialized in this.

Property or vehicle taken

Property or vehicle taken

In the case of a secured loan, there is a concrete risk of losing the asset offered.

In this type of loan, the person offers a property or vehicle as collateral. It signs a contract that provides that in case of default, the offered good can pass to the bank as payment of the debt.

There are advantages in offering a property or other asset as collateral to take out a loan. Because of this guarantee, it is possible to negotiate with the bank interest rates well below the normal percentages practiced in the market.

The disadvantage is that if the person delays the installments a lot, there is a possibility that the bank may request the offered good as collateral to repay the debt. Although this is the last resort, this possibility is real.

Worse still: in some cases, the person, in addition to losing the good offered, still needs to pay the balance due!

Problem for the guarantor

Problem for the guarantor

A guarantor is a person who guarantees the payment of a loan taken by a trusted friend.

Thus, in the case of loans with collateral, in the occurrence of default, the bank or creditor institution will seek the guarantor who signed the contract. The goal is to charge you the loan debt.

This is undoubtedly an embarrassing situation. Most of the time the guarantor is friend of the person who took the loan. Failure to pay off the debt may cause the friendship between the two to shatter.

How to solve the situation?

How to solve the situation?

Well, we have already listed some of the answers to the question “I made a loan and I did not pay… what happens now?”. So let’s keep talking about what can be done to solve the problem.

When you are no longer able to pay the monthly installments of your debt, the best thing to do is to seek the bank or lending institution to talk.

Show that you have an interest in repaying the debt, and propose a renegotiation. To do this, present data as proof of monthly earnings and expenses, and try to negotiate new interest rates.

For the creditor institution it is more convenient to renegotiate the debt, establishing new deadlines and rates. This is always more advantageous than running the risk of not receiving any money.

This also occurs in secured loan cases. It is much more advantageous for the bank to renegotiate the debt than to trigger its legal body to enter with a process of materialization of the good offered as collateral, to take it from the person.

Legal proceedings are expensive and time consuming. As a result, banks are usually willing to talk to debtors to try to reach an agreement, before resorting to extreme measures. So, do not hesitate: seek your creditors to renegotiate your debt!

What happens then if I made a loan and did not pay?

What happens then if I made a loan and did not pay?

Briefly, you will be denied in SPC and Swera, getting the name dirty. This means that you will have difficulty making other loans or credit operations. Other than that, if you have offered a good as collateral for the loan, it can be taken over by the bank, which will auction you off to pay off your debt.

There is still the possibility that you may be sued by your creditors. That will probably take you plenty of time, and money, for lawyers.

But for one thing you can rest easy: you will not go to jail. Brazilian law does not provide for arrest for non-payment of bank debt. The only situation in which the person can go to prison is in the case of non-payment of alimony.

But that is no reason to be owed! Here are tips to try and clean your name as soon as possible.

What is the refinancing of the loan?

The loan refinancing service appeared relatively recently in many loan companies and probably that is why it is still not well known among people taking loans on the Internet. Meanwhile, it is worth knowing about it, because it is a good way to avoid many problems if you can not repay the loan within the prescribed period.

Most online loans are granted for a relatively short period, usually for 30 days. During this time, you should pay back not only the amount of money borrowed, but also the commission and interest. With the collection of the entire sum needed, the borrowers usually have no problem. Some of them, however, sometimes have insufficient funds to repay the loan on the designated day. Unfortunately, many such people simply do not repay the loan on time, thus exposing themselves to quite serious consequences.

In the majority of loan companies, debt collection procedures are initiated in such cases, which are related to:

  • charging penalties for being late,
  • unpleasant conversations with the debt collection department,
  • in extreme cases, even entering data of an unreliable borrower into nationwide debtor databases.

Refinancing as a form of extending the loan repayment date

Refinancing as a form of extending the loan repayment date

Undoubtedly, being late in paying off the loan does not pay off. However, in the case of problems with timely repayment, you can cope by using the loan refinancing service.

  • It consists in the fact that the borrower is granted a loan from another company, which is intended for the timely repayment of the first loan.
  • In order to make life easier for borrowers, many companies relieve them in seeking a refinancing loan and arranging all formalities.
  • The only thing a borrower who has a problem with the timely repayment of a loan has to do is report this fact to a loan company, usually through his account on the company’s website. In most companies, this should be done before the old loan repayment date. In our article: Momentum for repayment of debt is a good or bad idea to read whether it is worth using such a solution.

What do you need to know about a refinancing loan?

What do you need to know about a refinancing loan?

  1. Applying for a refinancing loan is also associated with the need to pay a fee, which should be specified in the table of fees and commissions or regulations.
  2. The refinancing loan is granted in exactly the same amount as the previous loan from which the repayment has a problem. Therefore, a person using refinancing does not receive a new loan to his account, because the funds are transferred between two loan companies.
  3. At the time of transfer, the “old” loan is settled, and the borrower has a “new” loan with a new repayment date. Thanks to such a solution, the borrower can easily avoid problems related to the late repayment of the loan in a simple and quick way.

Example:

  • In company A, a loan in the amount of PLN 1000 was drawn for 30 days, for reimbursement, including interest and commission, PLN 1280 remains.
  • In order to apply for refinancing of a loan, you must first pay the interest part of the loan to company A, which is PLN 280.
  • A refinancing loan in the amount of PLN 1000 from company B is entirely intended to repay the loan in company A.
  • The borrower has to repay a new loan in company B with a new repayment date of up to 30 days – the amount to be refunded is PLN 1280.

Loan or Financing: What’s the Difference? – Low interest

First of all: what is the difference between loan or financing?

First of all: what is the difference between loan or financing?

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Both the financing and the loan are a contract between you and a bank, where you receive a value now and promise to pay the bank in the future, plus interest. The number of installments and interest are combined shortly before you sign the agreement.

The difference is:

  • loan: the amount obtained has no specific destination (can be used as you wish).
  • financing: the amount obtained has a specific destination (usually the purchase of a property, car, motorcycle, truck, boat, tractor…).

As the financing has a definite purpose (buying a property or vehicle), this greatly reduces the risk of the bank, which in the worst case, will have the good that you bought as collateral in case of non-payment. In addition, by knowing the destination of your money, it will be more certain about your consumption profile (and thus you can better analyze your ability to pay debts).

With this, the interest for you decreases a lot in financing! That way, almost always, financing is the best option (because it has lower interest rates for you).

What can I do with a loan?

What can I do with a loan?

As the loan service has no specific destination, it can serve anything like (interest is paid by the service):

  • Pay the credit card
  • Pay the overdraft
  • Remove debts
  • Buying goods
  • Invest

And the funding?

And the funding?

The main difference is the need to present information about the product or service to serve as a guarantee for the institution.

Okay, but after all, how do you decide which one is best?

Okay, but after all, how do you decide which one is best?

The decision is simple: interest rate!

This is the main information you have to check to make your decision.

According to data from July 2016 of the credit report of the Central Bank of Brazil, the average interest rates for auto financing and payroll loan were:

Acquisition of Vehicles (Financing) : 26%

Paycheck-deductible personal loans for civil servants : 27.3%

These are average values. That is, as they vary and are very close, this does not guarantee that financing will always be cheaper than payroll-deductible loans.

Then that’s it:

  1. Check out the Interest Rate and Total Effective Cost among the options you have.
  2. Choose the smaller one!

Practicality

Practicality

By having smaller interest rates and always being related to large amounts, the financing is more bureaucratic and time consuming. The analysis is more detailed and the payment term is always great, with years to come. Besides the money does not go directly to you, the taker, but to the company of the good that is being bought. When buying a car, the money goes straight to the dealership of the vehicle.

On the other hand, the loans do not have as much bureaucracy so they are quicker to leave. The analysis happens in a simplified way and because these are smaller amounts the payment term tends to be smaller, a matter of a few months. Besides the money go directly into your hands for you to use as you need.

Simulate a Low Interest Loan!

Compare rates for more than 20 banks for your loan. Escape high interest rates and get the loan with the best rate for you!

Simulate

More broadly and generally, the loans would be for more immediate situations like paying a debt, renovating your house or doing maintenance in the car. While financing for more expensive things and more durable goods like a house and a car.

However, it is not a rule and every case needs to be studied. The fees need to be compared to choose the best deal available, it is necessary to assess the urgency and need of the good that money will be spent. In addition, to carry out a self-assessment and check if the debt does not greatly affect the monthly budget, if what you have and earn is sufficient to pay the installments and if after a few months it will be possible to continue paying. One of the things to be analyzed is the CET.

What is CET?

What is CET?

Total Effective Cost is the total amount paid at the end of a loan or financing. Interest rates and plot values ​​should be analyzed, but the CET becomes more important because it includes all fees charged. These fees are in addition to interest rates, charges, insurance, taxes, taxes, notary fees, commissions and other expenses paid by the policyholder.

What is it for?

What is it for?

With CET it is possible to analyze which loan or financing is most advantageous. For having an overview and informing what will be the total amount to be paid at the end of the operation. Analyzing only interest rates is dangerous because the other fees included will not go into the account. With this, it is possible to find a proposal with a higher interest rate, but more advantageous when comparing the Total Effective Cost because it does not have so many taxes behind.

All companies are required to provide the value of CET in the contract. To compare offers between banks always simulate with the same value and payment term, each company has its rules and tariffs so the values ​​vary from one to another.

Now that the differences have all been clarified and you already know what needs to be analyzed to choose the best loan or financing, the time is to study the situation and find the best opportunities for you available in the market.

To close

If you want to buy a vehicle, financing is almost always cheaper, and a good conversation at the dealership can help you make these rates even cheaper.

But anyhow, never fail to compare these four cheap credit options:

  • personal loan with property in guarantee (mortgage)
  • personal loan with vehicle under guarantee (vehicle refinancing)
  • payroll loan
  • financing