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Can a faster repayment of a home loan be a bad decision?

A mortgage or mortgage is usually one of the biggest credit obligations a person receives in his life and because of this size and long repayment schedule for these loans is usually also the most overpaid. Often the total overpayment to be made on this loan is up to 50% of the total fair value of the property, which means that if your apartment costs 20 thousand, you will pay the bank at least 30 thousand at the time of the loan repayment, which is 10 thousand more. than the fair value of the property.

Repayment of a home loan

Repayment of a home loan

So, precisely because of these costs, many people usually think about how it would be if they tried to repay the loan faster, whether it would affect the total amount of credit and whether such a financial decision would be economical, or would it be better to invest or invest somewhere else? So, from the very beginning, if you can’t repay the loan in one payment, then you will not save as much as you imagined as a percentage of the amount you usually pay for the repayment of the loan and only when the interest is repaid. you agreed with the bank, then the repayment of the principal amount starts and so the savings will not be so great. Of course, if you repay the loan in 10 years instead of 20 years, the total benefit could be close to 5,000 Euros if the total loan financing was 20,000. But if you repay the loan in 18 years instead of 20 then this benefit will be very minimal and most likely you will not even feel that you would have earned extra money and would not have given it to the bank.

That is why financial planners often recommend that people use this extra money for short-term loan repayments or savings. If the mortgage interest rate is, for example, 4%, but the rate of the fast loan is 100% then there is no option here and you definitely have to repay this short term loan much faster, because even though its amount is much smaller, you pay a lot more than the same time mortgage lender with this low interest rate. If you have no other credit, you should definitely think about making your own savings, because we all have different unexpected situations in life, and if there are no such savings, then new loans with much higher interest rates will have to be taken again. But if you have this reserve fund set up in sufficient size and then have more money left, then you can start paying off the mortgage faster, because in the long run you will save money even if you pay the highest amount each month that you lose money.

It is usually very difficult for people to understand that paying higher payments to the creditor now gives you much more money in the long run, as most of us see only short-term losses on their wallet and think that it is not worthwhile to repay the loan faster because you have less money now. But if we think a little deeper, then credit means that your money is actually in the minus and if you pay a higher monthly payment you will soon return to the positive value and you will save on high interest payments in the process.




Loan for everyone, money now, pay later

Oh my God, I think I’m going to have to make a loan at the bank! The end of the month arrives, opens the drawer, several bills to pay, credit card bills with extended weekend expenses, water bills, light and telephone, car financing ticket, children’s school fee, xi, this week has a fantasy party, now what? More of this story:

The other day I was home I received a letter from a financial institution, saying – Calm down! your problems are over, get up to R $ 15,000 thousand with great interest and payment facilities – I almost believed. But the most certain thing that can happen in our life, is to make money working and pay expense accounts. If the person is controlled it will be a success, if not, everything that dreams is close but will bring problems in the budget and a lot of headache. No need to get desperate, you can get out of the financial grip by asking for a personal loan, that’s a loan that fits in your pocket.

I have the impression that you do not have money to pay day-to-day expenses, it seems that we are always in need of money, especially those who have limited income and do not make adequate financial control. The worst, it is this frivolous (futilities, fickle, without notion, without judgment) that is attacking the people, each one in this land wants to be better than the other in the demonstration of status, the other day I found a friend who bought a bag in 10 x of R $ 365.00 to hang on the shoulder, I have a friend who to talk on the phone and stay pressed on the screen of the cell phone, paid 12x of R $ 163.00 plus a little plane with the operator, legal.

What is the loan?

What is the loan?

The “loan for all”, the money comes out now, and you only pay later, if you have the name cleaned or consigned on the sheet.
Let’s make one thing clear! The loan, is a credit solution that serves to remedy emergency situations, period. Legally speaking, it is the contract or transaction made between a debtor and a lender (bank, financial, credit union etc.) that lends a certain amount in money with the addition of interest. Once the commitment has been reached, the debtor will have a deadline for payment, beginning and the deadline that can be chosen by him, until the end of the contract, the debtor reimburses the amount granted by the creditor plus an interest rate agreed beforehand.

Loan for all

Loan for all

The loan is for everyone, but not everyone can pick up, to get a loan the applicant has to go through or has already undergone a series of reviews by financial and banking institutions. In Brazil, we can say that there are three basic ways to get money with banks, how different lines of credit are and for different types of borrowers, interest rates, payment terms, conditions and advantages change a lot. If you are in need of a loan to cure more expensive debts or pay bills due or to expire, the most interesting thing is to check with your manager what is the best solution for you, not the bank.

Here are the types of loans commonly offered by banks and financial institutions in the country:

Pre-Approved Loan

Pre-Approved Loan

This form of credit is exclusive for bank account holders or clients who receive their salary, counter-check or INSS benefit, as is the case of retirees or pensioners, who have a pre-approved limit, the option is available in the account to be used at any time. The loan is automatic and can be done online, at the bank’s ATM, at the bank branch and by telephone. The installments are adjusted according to the limit and are automatically charged to the applicant’s checking account.

Payroll loan

Payroll loan

The more searching since it was created, the payroll is a type of loan that has its installments discounted directly on the payroll. There are many advantages for those who can contract this operation, the applicant does not need to have an account at the bank, the rates are the best compared to other modalities, the installments can be directly discounted at the company or paying agency of the applicant, during the term of the contract. The discharge of the loan can be anticipated after the grace period.

CDC – Direct Consumer Credit

The CDC is a loan directed more exclusively to the acquisition of goods and services like (electronics, appliances, construction materials and also technical assistance and maintenance). The CDC is a loan, but can be recognized with financing; the most awarded CDC are banks and retail stores. In this type of operation, the payment is made through the financing with credit card or financing in the card. There are several variants in the concession of this type of credit, one of them is the vehicle of the applicant given as collateral.

Taking advantage of the theme, check out the “Video of the Good for everything of the Bank of Brazil”

We work with Loans in the minimum amount of R $ 3,000

Would you like to get a personal loan offer with advantages and special conditions and at extremely low rates to pay in tens of months? Of course I wanted to, even I who am more foolish would like cheap money funded to lose sight of. Especially when the money of the month is by a thread, and the day of payment is still far from arriving.

Because of situations like lack of money and debt, some people may even go into financial despair and do a lot of nonsense. Want to borrow money, try to consider some alternatives, let’s give the example of 2 or 3. Take a loan from the bank, can not, is the name dirty? Ask your parents if they can lend you a certain amount, and at your company – I worked for an organization that had an emergency cashier for employees who were in temporary financial difficulty – or who knows, try asking a co-worker or your boss? As absurd as it may seem, the request can be met.

Easy money loan

Easy money loan

When things are tight you need to consider all the options, good ideas are welcome. Well, an easy money loan may be the answer to solving your financial problems, but where to get it? It’s difficult, I know, there are hours that seem like all the doors have closed. That is why I have seen something happen lately too much, are person with needs to get money being cheated by ads of loans like this that this in the paragraph below, gives a read.

We work with loans in the minimum amount of R $ 3,000.00 to R $ 500,000.00 with fixed installments and the first for 60 days, and can be paid through a ticket, carnet and debit account, up to 240x, we work with the lowest rates of interest rates ranging from 1.99% to 7.99% per month, for which an analysis is made in their cadastral form to know in which profile it fits.

” We work with loans with collateral, this form of loan works as follows the client presents us with a guarantor of his trust with a good in name and with a clean name, in case the client does not have this guarantor he may be contracting the surety insurance of our company that works the same way.

In order to continue the analysis process, please forward the following data: “

This brief report was made in our comments by an Internet user offering his services, not because we moderated the comments to avoid Spam and AutoSpam, we informed that we could not put in the integral, we had to correct some words because it contained many errors of Portuguese.

The most incredible of this offer is that there are still people who fall into this type of loan blow with surety bond, to speak the truth are not few people. 

But why is this kind of loan scam still happening? Simple! The Brazilian likes facilities, likes to get along well, likes to take advantage, where he can already borrow money and pay 8 or 10% advanced for surety insurance or any invented filly. Others fall for thinking that their problems will be solved, what they do not know is that the problem has been further aggravated.

If you need a loan, look for reputable companies or institutions, never make deposits on behalf of third parties, rooms or fifths to get personal loan, never send your document to companies that ask for advance of amounts as interest rates… Never do loan with loan sharks.

The mini loan without private credit: Worth knowing, tips and providers

Is there a mini loan without private credit? It is a question that you can read in relevant forums as well as well-known help platforms again and again! But where can you borrow money without private credit? Who are trusted providers? How can I differentiate a good, serious mini-loan offer from a bad offer? All questions that are answered in the vastness of the Internet in a variety of ways (not always objectively!). Unfortunately, the answers to these questions are not always backed up with correct and therefore appropriate information. The above questions regarding a mini loan without private credit are so difficult to answer. You just have to move in this environment and build up appropriate knowledge. This makes it possible to find such a special loan offer as the mini loan without private credit.

Basically, the mini loan without private credit is similar to a regular loan without private credit. Common to both is that it is made for people who, for whatever reason, would like to avoid any contact with the private credit when taking out a loan. The reasons for this can be manifold. Those main reasons are undoubtedly in over 98 percent of all searches for a debt-free loan in present negative characteristics. For example, through unpaid bills, canceled checking account, dunning decisions to legal enforcement measures. But the simple desire to simply not want to stand in the private credit with a borrowed credit can be a reason. Because the borrowed credit inevitably leads to a deterioration of the so-called credit score. Consequently, this can often be one of the reasons for the interest in a loan without private credit.

Credit without private credit: No business of classic banks

Credit without private credit: No business of classic banks

But no matter, for whatever reason one ultimately makes the search on the Internet for a loan without private credit or mini loan without private credit, the house bank is the wrong point of contact. The fact is that in such a loan, the classic house bank for a loan of this kind eliminated from the outset. The reason can be found in the credit rating. This means that each bank in Germany or credit institution cooperates with at least one business information service – usually private credit Holding. Consequently, it is decided from the private credit information whether or not an applicant’s loan request is met. If the credit rating of a potential credit customer has correspondingly negative notes, the bank will strictly reject the granting and awarding of a loan. However, this behavior on the part of the banks excludes those people as potential borrowers who, for one of the reasons already mentioned, do not wish to have any contact with the private credit in connection with a loan.

Credit without private credit: The need is great, the dangers too

Credit without private credit: The need is great, the dangers too

But where there is a need, sooner or later an offer will develop on the topic “Borrowing money with a private credit entry”. Those who are interested in a loan without private credit on the Internet can nowadays find a large number of corresponding loan offers without major problems. Incidentally, this also applies to a mini loan without private creditt. The problem with the variety of offers is to filter out legitimate loan offers. Which is not necessarily easy, because the topic “credit rip-off” is quite omnipresent. This is exactly where the real problem begins. Because where people with a financial problem go in search of solutions to those problems, “credit providers” are generally not far away either. Their only goal is the financial exploitation of those people in financial distress. 

But what about the offer ” mini loan without private credit “? After all, the subject of mini-credit is still a relatively recent topic in the local financial world. The mini credit or short-term credit has enjoyed growing awareness only in the last 18 months. This is primarily due to the fact that the number of mini-credit providers has increased significantly in the last few years from one provider to now 4 providers. In comparison to the providers of classical credit without private credit admittedly a vanishingly small number. On closer examination, however, this is anything but disadvantageous.

Not comparable: The mini loan without private credit and the loan without private credit

Not comparable: The mini loan without private credit and the loan without private credit

But why are there any special offers for a mini loan without private credit? A perfectly legitimate question, the answer to which is justified here as in the case of a conventional mini-loan in the loan amount granted or maximum available as well as in the maximum repayment term. For while the normal loan without private credit moves in a credit line of at least 1000 euros to a maximum of 7500 euros and a repayment term of at least 12 months to 72 months, these features are set clearly different for a mini loan without private credit. Anyone interested in a private creditfreien short-term loan, which are usually only loan amounts between 50 € to a maximum of 600 € with a maximum repayment period of 30 or 60 days available. Because of these features, you can also talk about a 30-day debt-free loan with these loan offers.

private creditfreie mini loans thus always serve a smaller credit needs in which the time of repayment is fixed from the outset. At an agreed repayment date, the microcredit granted, including interest and possibly additionally used options such as flash transfer, etc., must be repaid. A deferral of installments and an extension of the repayment term is not possible with these mini-loan offers. This clearly distinguishes the mini loan without private credit from the big brother “Kredit ohne private credit”. The loan without private credit corresponds rather, with the exception of the nonexistent private credit valuation, rather to the classic installment loan.

Mini credit providers rate the private credit information differently

These characteristics of the lower loan amount as well as the short repayment term result in the view that the mini loan provider considers the private credit information to be of minor importance when assessing a credit customer. In this respect, the term “mini loan WITHOUT private credit” is only partially correct, because correctly, it should rather be called ” mini loan despite private credit “. Even the mini-credit providers get credit reports from credit reporting agencies. In addition to private credit, these include institutions such as Creditreform & Arvato-Infoscore. However, most mini-credit providers rate this information significantly differently than traditional banks do. More important is these providers, which can be proven a regular income. However, hard negative features should NOT be revealed in the credit check. Among the hard features include reminders, enforcement measures to the delivery of the affidavit and existing arrest warrant. If such features exist, none of the mini-credit providers will grant a private creditfreien short-term loan.

Another issue that often arises in connection with a mini loan without private credit is the question of the seriousness of such offers. The same applies, of course, to the service providers behind these offers. If you look closely at these mini-credit providers (especially those who also advertise with the slogan “mini-credit despite private credit”), it will be astonishing that behind these offers there are often financial institutions with a corresponding banking license. A fact that is 99% NOT the case with the multitude of “normal” offers for a loan without private credit on the internet. Rather, behind these offers are often called credit intermediaries. Unfortunately, it is rare for credit intermediaries to be transparent from the outset. Who or which institution is actually behind the loan offer without private credit is often apparent only after application.

Do I first have to pay off my mortgage or student loans?

Student loans and mortgage debt are often considered to be ‘good debts’ because they are forms of debt that you enter into to buy something that should increase your equity. However, “Innocence” includes credit card debts, car loans and other consumer debts to make purchases that fall in value.

Regardless of the classification, the debt must be paid off at a certain time. And if you have a little extra money every month, you might wonder: do I have to speed up payments for my mortgage or student loans? And if so, which should I first try to pay off?

Determination or payment of student loans or mortgage debt

Determination or payment of student loans or mortgage debt

Although there is a lot of discussion about whether student loans or mortgage debt should be paid early, there is little discussion about when it should n’t be done. You do not have to make additional payments for one of these debts until you first do the following:

  • Pay Off Consumer Debt. If you have a car loan, credit card balance sheets, personal Summerson-rich loans or other types of debt with higher interest rates and non-deductible interest, you must always pay off such debts before tackling an early repayment of a mortgage or student loan.
  • Set up an emergency fund. An emergency fund with three to six months of livelihood protects you from having to take on consumer debts to pay for an emergency, such as a repair at home or in the car. It makes no sense to send your extra money to repay student loans or mortgage debt if it leaves you without the money to handle an emergency.
  • Finance your 401k to your employer’s Match. If your employer matches your pension contributions and carrying at least not in the matched amount, gives you basically free money.

If you are in a good financial condition, have paid off your other debts and are benefiting from the 401K match, the question of whether you will pay off your student loans or mortgage early will become a little more difficult.

Reasons to pay off your debts early

There are enough arguments to pay off your student loans and mortgage early. For example, if you pay off your mortgage or student loans, you enjoy the following benefits:

  1. No more money wasted on interest. Although you can make a tax deduction for interest on mortgages and student loans (if your income falls below a certain threshold), the deduction does not fully cover the interest costs. Money spent on interest is wasted, while money saved on interest yields a guaranteed return on your investment.
  2. More financial freedom. Without a mortgage payment or a student loan payment, you can do what you want with your money – including building capital and saving for your pension.
  3. Less risk. If you have debt payments, you must have income to cover them. If you are debt-free, a job loss, disability or other temporary income loss does not run the risk of losing your house or ruining your creditworthiness.
  4. Elimination of non-financeable debts. Although bankruptcy can resolve some debts as a last resort, student loans are not bankrupt. You can also not let your mortgage debt go bankrupt if you want to keep your house. Since you cannot wipe out your mortgage or student loans, the only way to prevent this is to pay it off.

Arguments against early repayment of your debts

Although the arguments for paying off your mortgage and student loans early can be quite convincing, there are also numerous arguments against paying them. For instance:

  1. Student loans and mortgages are low interest debts. This is the biggest argument against prepaid mortgages and student loans. With low student loans and mortgage interest and the ability to deduct interest, it is easy to find investments that pay more interest than you pay for your debt, especially if you invest in tax breaks such as a Roth IRA.
  2. Prepayment comes with opportunity costs. When you invest and earn a return on your investment, that money can be reinvested – and you can also earn money with that investment. This is called compound interest. Compound interest can make a big difference in your pension and your long-term savings, and the more you invest when you are young, the more your money will grow. For example, if you invest $ 100 a month from the age of 20 to 40 and earn 8% annually, you would invest $ 24,000 and have nearly a million dollars by the age of 65. If you waited and invested 30 to 50 years, investing the same amount of cash and the same return, you would only have $ 205,875 if you turn 65 – or $ 750,000 less. This is because in the last example your money has less time to grow between when you stop contributing and when you start withdrawing for retirement. It is a big difference to spend that extra $ 100 per month on retirement savings instead of the repayment of student loans.
  3. Repayment of loans is not a liquid investment. Once you have paid off your mortgage or student loans, it is usually very difficult to get your money back if you need it for another reason, such as in an emergency or to cover loss of income due to unemployment. You can’t reclaim the money with student loans at all, and while you could sell your house, there would be closing costs and costs – and the house could remain on the market every month at Esther Summersonang.

Determine which should pay first

Determine which should pay first

If you have weighed the pros and cons and have decided that early payment is the right one for you, the next question is whether the mortgage should be paid first or whether the student loans are required. The answer to this question depends on a number of factors:

  • Interest rates of your debts. Many people first want to pay a higher interest rate. This may be a good idea, but it is not always the best idea. Pay attention to all factors, in particular the tax treatment of debts. Mortgage interest is usually tax deductible for everyone, while the option to deduct student loans gradually decreases with higher incomes ($ 75,000 from 2012). The student loan deductions are also capped at $ 2,500 a year. Compare the effective interest rates after tax on your debt to determine which debt really costs more.
  • Amount due for each debt. Aldrin Duncys’s debt repayment method suggests repaying smaller debts for larger ones to stay motivated with your debt repayment plan. If you owe your student loans much less than your mortgage (or vice versa), then it may be wise to first pay off the smaller debt, so that you only have to spend one remaining debt.
  • Risks of adjusting rates. If you have a variable rate mortgage, there is a risk that interest rates and monthly payments will rise if interest rates rise. Paying off a mortgage with adjustable interest or paying enough so that you can refinance if necessary can be a smart bet.
  • Flexibility of reimbursement. If you have student loans, you can usually give them deferment or forbearance due to job loss, disability or return to school. Although interest rates continue to rise in most cases, you do not have to make any payments for a while. You can also choose to link your payments to your income or to use a gradual repayment schedule in some cases. With so much flexibility, tax-deductible interest and low interest rates, it is almost never useful to pay off student loans before other types of debt.

Last word

Ultimately, everyone has to make the choice whether the early payment of a mortgage or the early payment of student Crediterschool is right for them. For those who want to live a debt-free life, who want to be risk-averse and want a guaranteed return on their investment, early payment of mortgages or student Crediterschool may be the best answer. For more aggressive investors who are willing to bear the risk associated with a little debt, skipping the early payout can be a viable option.