Monthly Archive: October 2019

Attention! Interest rates rise!

As you can guess, and as we have often written in the past, loans will no longer be as cheap as they are now. There is no problem with this, as it has been a long time since we were able to borrow at record low interest rates. So treat it as a ready fact that interest rates are rising. And let’s act!

 

What happened?

home loan

We are not throwing words so big that an historic event has happened, but the fact is that we need to go back in time to 2011 to find something similar. Namely, the Hunasan Bank implemented an interest rate increase.

The Kingswood Bank base rate remained at 0.9 per cent, but the overnight deposit rate (available to banks) remained at 0.1 percent.

The significance of this is not interesting because of the numbers, but because it first happened after more than 7 years. We do not think we need to wait for the next increase, unfortunately, as inflation has reached the point where interest rate adjustments will begin. This can also cause major changes in loans , specifically loan interest rates.

 

Why is it important for homeowners?

Why is it important for homeowners?

On the one hand, those who are preparing to take out a loan must be prepared for a higher monthly repayment. There’s really nothing to do with it, but there’s no need to worry. We are amazingly far from lending rates 10 years ago. However, there are some who can act.

They are the ones who already have credit. We are thinking precisely of those who did not opt for the now popular fixed rate loans. That is, it is not so-called 5 to 10-year contracts, but so-called floating rate loans. Typically, these contracts have a term of 3-6 months, during which the interest and thus the monthly installment remain unchanged.

Since the rise in interest rates has begun, it is now worth replacing your existing loan with one that has at least an interest period of 5-10 years. This way, you can save yourself an unpleasant monthly increase in spending. It’s not too late now.

Do you have a variable rate loan? Then contact us! We find the ideal solution for you not to face the unpleasant rise.

Features of a good borrower

All lenders want to cooperate with a good borrower. However, the question arises about the most important features of a good borrower. What characterizes such an entity, how to achieve similar results in the credit market, why work constantly on creditworthiness? In the article you will receive a number of tips on building trust between the lender and the borrower.

 

What makes a good borrower stand out?

money loan

One of the most important features of a good borrower is the timely repayment of liabilities. It’s just creditworthiness due to many factors. An indefinite employment contract pays off on the credit market. It is worse if you perform professional duties based on a mandate contract or a specific task contract. Signing a loan agreement depends in many cases on the type of collateral you are able to offer. A good borrower is an entity with some savings, large fixed assets, prospects of making adequate amounts quickly. The features of a good borrower on the market are dynamically tightening. It is currently difficult to get a cash loan for higher amounts if you are in an uncertain situation or you are guaranteeing someone a larger loan. Avoid guaranteeing loans from friends or family members if you intend to incur larger obligations yourself in the future. This is extremely important because the data on loan guarantees are standard in the Credit Information Bureau register. Retail banks appreciate mature clients with an established professional position. Many years of experience in one company is one of the indicators of trust in the borrower. Regarding marital status, retail banks cooperate on a more favorable basis with marriages. For what reason? Marriage is automatic risk diversification. When one of the partners does not pay the obligation, there is a chance that the other person will take on a similar task. For the bank, it is a signal for greater confidence. The number of dependent family members is another element in assessing a good borrower. A large number of household members, most often children, is a problem in maintaining liquidity. Not every loan institution accepts similar terms. The retail bank also analyzes accumulated assets (for collateral) and the cyclicality of income generated.

 

Is it worth becoming a good borrower?

Is it worth becoming a good borrower?

A good borrower repays the liability on time, does not contact the retail bank about various liquidity problems, does not optimize installments and simply stays with one contract. Work on similar conditions for cooperation with retail banks is very beneficial. Access to credit is practically a luxury asset. Standards for borrower assessment and collateral for loan agreements are constantly increasing. Good creditworthiness allows you to get cash quickly and at a competitive rate. Many people forget to shape good creditworthiness. Without it, however, you can’t suddenly jump to a big loan. Repayment history should start with relatively small loans and gradually switch to larger ones. In this way you become a credible entity. Also, try to take out cash loans in banks where you have a personal account. This guarantees an instant credit check, including installment repayment prospects. Improving household creditworthiness pays off. Will you take advantage of the presented perspectives?