Do you need money to complete a project? Do you know your credit limit, the maximum amount you can borrow? How to calculate this limit? Our explanations.
What is the credit limit?
We talk about a credit limit to illustrate the maximum amount that can be borrowed by an individual when applying for credit. This limit is automatically calculated by the banks when submitting your file. Two cases then arise:
- Calculate your credit limit
If the precise calculation method differs from one establishment to another, the principle remains the same. Thus, the credit limit corresponding to the maximum amount repayable in three years. To calculate the credit limit, the financial institution does the following:
- Calculation of the gross budget : total of your income minus total of your compulsory expenses (insurance, rent, etc.).
- Calculation of the budget surplus : in the gross budget, it is then necessary to remove the “current” expenses (taxes, food, children,…).
- Calculation of the limit : the limit then corresponds to the maximum amount of a credit over three years that you could repay according to your surplus.
In a simplified way, once the monthly margin has been defined, it can be multiplied by a factor of around 30 to obtain the credit limit. In the case of a credit repurchase, the credit limit then corresponds to the total of the debts to be redeemed, plus a possible additional credit.
You have an income of 5,000 USD per month. After deducting the compulsory expenses, you have 2,500 USD. From these 2,500, another 1,500 USD is taken, corresponding to the current cost of living, to obtain a budget surplus of 1,000 USD monthly. To estimate your credit limit, simply multiply this excess by 30. You could then borrow a maximum of 30,000 USD.
Get your exact limit
To obtain a more precise credit limit, it is best to call on a specialized advisor. The latter will be able to study your budget in detail exhaustively to offer you a more precise estimate of your limit. In case of interest, it will then be possible to make a non-binding request to obtain your actual limit. In this case, do not forget to declare all your sources of income (and those of your spouse). Not only will you get a higher credit limit, but you will also benefit from better credit terms.
Do you need money quickly to finance a project or to deal with an unexpected event? How to get your money as quickly as possible, and what real delay should you expect? Explanations.
Fast credit, how much?
Getting credit quickly is possible, at least up to a point. Obtaining the money essentially involves two stages: the offer stage, which can be very quick, and the payment stage, which may take longer.
Get an offer
Obtaining the offer involves contacting a service provider: a credit bank, an agency or a broker. In order, it will be:
- Contact the service provider, announce the desired amount, the planned reimbursement period, and announce their situation.
- Provide the documents necessary to study the file. At a minimum, these will be copies of salary slips, identity card and rent lease.
- Wait for the decision and, if the application is accepted, receive the credit contract for signature.
The time required to obtain an offer varies depending on your situation, the time required to collect the documents, but also the efficiency of the service provider. Going through a credit agency, accustomed to dealing with banks, can thus guarantee a faster processing of the request. In all cases, it takes at least 2 to 3 days to receive a decision and the credit contract. In fact, this process can easily take a week to gather and transmit the necessary documents, then receive an offer in return.
Get your money
If the application is accepted, you receive a credit contract to sign and return. Since 2016, however, Swiss law has imposed a period of 14 days between signing the contract and paying the money! Depending on the desired method of payment, you must then add up to 24 hours for the payment to actually arrive in your bank account.
Speed up the process
Do you want to get a loan as soon as possible? To quickly obtain the desired amount, you can use a few tips:
- The choice of agency : choose an experienced agency to apply for your loan quickly. The latter will know precisely which documents will be necessary for the study of the file. This will avoid unnecessary trips to and from the bank to provide new documents.
- Document preparation : find out and prepare the necessary documents in advance. The copies of the documents must be of good quality: we prefer a scan to a photograph. Do not hesitate to send the documents by e-mail for more speed!
- Choice of payment : it is possible to withdraw cash, which allows you to get your money directly after the 14 days linked to the waiting period, without having to wait for the transfer to be effective.
Contact the right provider
Specialized in credit for almost twenty years, Best Credit can help you get your credit quickly. Do not hesitate to contact Best Credit for a non-binding proposal or simply inquire about the documents necessary for the study of your file.
When it comes to urgent financial needs and looking for the best consumer loan or credit option, you can get lost in different types of loans. Different purpose loans or credits tell us about different services. Therefore, in today’s Buendía family blog post, we talk about the main types of loans, what they are different and when it is best to choose.
If you are planning to buy your own home – you probably won’t have all the money right away, so with your down payment, the next step is to look for the best home loan prices. Mortgages differ from others in that they are usually of the longest maturity and can last up to several decades. You also need your own down payment to get a home loan.
Often people who rent a home for quite a long time come to the conclusion that paying a mortgage is almost like paying monthly rent, with the only benefit of eventually becoming a home. However, when choosing a home loan, it is extremely important to evaluate your payment options, as this commitment is extremely long-term, and keep in mind that this loan will take years to pay, so it is essential to take the time to find the best deal.
Consumer credit is usually used when a larger amount of money is needed for unexpected expenses. Consumer credit can be short-term, with borrowings of just a few weeks or months, and long-term, with borrowing times up to several years.
The advantage of consumer credit is that you do not have to spend a lot of time, go to the bank several times and manage many different documents to get it. Make it all the power at home, even without getting off the couch Credit can be ordered online and the money will be in your account the same day.
This is a type of loan where a certain amount of money is only given through a mortgage. The pledge can be, for example, a house, a homestead, a car, etc. The pledged property provided all payments are timely, can be used without any restrictions.
However, when choosing this type of loan, it is crucial to have a good look at your solvency and ability to meet your financial obligations, as you run the risk of losing your mortgaged property in the event of serious financial difficulties.
This type of loan may be granted to legal persons who wish to develop their existing business or to natural persons who are just interested in starting their own business.
Business loans can be made to purchase a variety of equipment or facilities, when needed for raw materials or to invest in new business.
Refinancing is the process of transferring an existing financial obligation to another institution in an effort to reduce the interest payable, extend the maturity or otherwise improve the terms of payment. However, it is worth considering whether refinancing is really the best option that will save you money. Calculate what premiums you would receive when you transferred liability to another company, how interest would change, and how much you would pay in total. Of course, there are certain situations where refinancing reduces the burden of liabilities, but sometimes it happens that even with the refinancing of a loan, the interest rate reduction is extremely minimal.
Before choosing a loan type, think carefully about the amount you need and borrow only what you really need to avoid potential financial difficulties. Also, consider the purposes for which you need a loan and this will make it easier for you to choose the best lender.
Faced with the many players in the consumer credit market, it is not always easy to know where to turn. What is the use of an online credit comparator compared to the comparison of offers made by a specialist? We offer some explanations and an example of a customer who saved more than 5,000 dollars thanks to a better rate.
Beware of online credit rate comparators
In the idea, to compare the various offers proposed by the banks is attractive. It would then be enough to enter the desired amount and the duration of the loan to instantly know the best offer. In practice, this procedure works well for services with fixed conditions, such as insurance, but much less for private credit.
Indeed, the rates offered are not universal. For the same amount and the same loan duration, two borrowers may be offered completely different rates by the same bank. Indeed, each request is analyzed by the banks and is the subject of a tailor-made offer. Thus, it is simply not possible to offer a reliable credit comparator: “automatic” analysis is simply not possible. A comparison of solutions must necessarily go through the study of the file: something that an online comparator cannot do, for example.
How best to compare loan offers?
The solution to get a real comparison of offers, that is to say an analysis that takes into account your specific situation, remains to go through the services of a specialist like Multicredit, which offers a credit rate comparison service. The latter can then:
- Study the file
- Ask your banking partners for individual offers
- Compare the offers received
- Possibly still negotiate more advantageous rates
Comparing effectively saves money: an example
A bank employee, wealth manager and endowed with a good income, wished to obtain a private loan of 200,000 dollars . The specialist in charge of his file essentially selected the offers of two banks for reimbursement on 60 monthly payments:
- A first offer with a rate of 7.9%
- The second offer with a rate of 6.9%
A quick calculation of the costs makes it possible to realize that this difference of only 1% represents for the client a saving of 5,315 dollars on the interest paid! In this situation, calling on a specialist for the comparison of rates allows real savings! In addition, the latter, once the best alternative has been selected, can still negotiate to obtain an even more attractive rate!
While online credit comparators can be useful for getting a general idea of the markets, they do not allow you to compare real rates, as these depend on the situation of each borrower. The best alternative therefore remains to call in a specialist. It is then the experience and professionalism of the person in charge of the file that will allow to obtain a neutral and real comparison and to save on the interests of his future loan.
More and more credit agencies are offering “all online” solutions. Can you really get a mail-only bank loan, and what will be the mandatory steps to get the desired amount? Explanations.
An increasing number of online services
Since the democratization of the internet, the range of online services has grown steadily. Online shopping, ebooks, e-banking, online administrative forms, the behavior of uses is gradually changing while more and more procedures can be carried out from home. Consumer credit is no exception. However, subject to the Law on Consumer Credit (LCC), bank borrowing cannot yet be done entirely online.
What is available online
If the internet does not yet make it possible to take all the steps to obtain a loan, most of the steps for obtaining a loan can now be carried out on your computer with most credit agencies (such as GoodCredit for example ). Thus, it is possible:
- Apply online for credit : via a more or less complete form to indicate your situation and the desired terms.
- Send your documents online : these are necessary for studying the file and include, among other things, a copy of the salary statements and the identity card / residence permit. Please note, a good quality scan is generally required (prefer a scanner to a camera).
- Manage your correspondence online, whether by e-mail or by phone.
Not everything is possible online
For security reasons, certain procedures must be carried out either by direct contact or by post. More specificly:
- The signed credit contract must always be physically given to the service provider. It is then possible to bring it by hand or to go by post.
- The customer must be identified, this to verify that it is he who borrows the money. This can be done either at the counter of the bank or credit agency, or through a yellow identification. The latter is a document that can be issued by any postal office in Switzerland.
The borrowed amount can either be withdrawn by hand from the credit bank, or paid into a bank account or postal account of your choice.
Towards future change?
More and more administrative procedures are possible online, and it is not to be excluded that the future will allow borrowing while online. The main obstacles today are the signing of the contract and identification. If the digital signature could be adopted for consumer loans, identification remains a problem today.
The credit curve does not crumble at the start of the new year and European monetary policy should not change the situation. However, the body which controls the stability of the French financial market intends to add restrictive measures for the banks.
Credit enjoys good vitality in France
The body that oversees the stability of the financial system, the High Council for Financial Stability (HCSF), recently announced its concerns about the level of indebtedness of the private sector as well as businesses. This debt is calculated by reconciling the sum of total credit outstanding with respect to the Gross Domestic Product (GDP), ie the total wealth created by a country. And the HCSF specifies that three-color households are at the head of a debt ratio of 133.3% of GDP at the end of the third quarter of 2018. Companies hold an even higher rate with 175% during this period. same period.
It should be added that the context is particularly favorable for borrowing. Households can get credit deals at extremely low interest rates. And the Righteos Bank has decided to extend the period of low rates. It therefore maintains an accommodative monetary policy, in particular to support economic activity within European countries and generate growth.
Also, households benefit from a real relaxation of the conditions imposed by the banks which seek to compensate for the little margin generated from the credits they receive by a higher production of outstanding amounts. A decision that illustrates the good performance of outstanding loans in January 2019 which increased by 6% over one year on the market of individuals, but also of professionals. France is also the only territory in Europe where credit continues to grow.
Banks summoned to reassess their capital
Now, for the sake of vigilance, the HCSF has reinforced the regulatory constraints that affect banking establishments. The supervisory body requires increased vigilance when analyzing the risk before granting loans.
Finally, the HCSF plans to raise the capital requirements by 0.25% within a year. A surprising measure and inconsistent with the policy dictated by the Righteos Bank. Indeed, the rise in the capital rate could dampen the ardor of the banks by providing less incentive for loan production. However, the authority wishes to ensure that household debt is properly regulated. A decision that reacted virulently to the professionals of the bank who feel they do not understand it following the context decreed by the Righteos Bank.
- Personal credit to meet various needs
- Righteos Bank decides to keep credit rates low