What are the requirements to obtain a consumer credit?

A Consumer Credit is a type of loan offered by financial institutions that gives you the freedom to use silver in whatever you need. For example, to remodel your home or renovate the car. But do you know what are the requirements to obtain a consumer credit ? We explain it to you below.

A consumer credit is a short or medium term loan that is granted to obtain freely available money. It is normally used to finance personal needs such as the purchase of consumer goods or payment of services.

 

What should I know before requesting a consumer credit?

What should I know before requesting a consumer credit?

According to records of the Sernac, there are overwhelming differences between consumer loans with the same characteristics of different financial institutions, be they banks, credit unions, financial cooperatives or compensation funds, these differences can reach up to 400%. That is why it is advisable to consider the following aspects before requesting a consumer credit:

  • Start your search by comparing among the consumer credits of various entities. The following post may be interesting for this: Better consumer credits.
  • To solve your doubts you can also use the online simulators available to some of the financial institutions.
  • Another important aspect to consider is credit rates , since the lower they are, the lower the amount that is paid. Thus, it is necessary to distinguish between:
    • Annual rate: corresponds to the amount borrowed and consists of the total cost of the loan expressed as a percentage, taking into account commissions and administrative expenses, among others.
    • Nominal interest rate: applies only in the case of not establishing an annual rate, with its corresponding expenses.
  • It is also important to take into account the time that is considered to pay the credit and the periodicity of the payment (weekly, monthly, bimonthly, etc.), since it will also depend on the number of installments to pay.
  • Finally, you should also consider the constitution of guarantees and what are the penalties and other expenses that may be applied depending on the contract.

 

What are the requirements to obtain a consumer credit?

consumer credit?

The establishment of requirements for consumer loans generally depends on the commercial policy of each bank, since each of them must evaluate its customers in order to operate with them. Therefore, there will be entities that may require a lower level of income or indebtedness than another bank is willing to accept, in order to grant them a loan.

In general terms, banks require a series of requirements from the person requesting a consumer credit in order to determine that they will have sufficient income in the future to pay the fees of the requested credit. Among the most common requirements are the following:

  • For dependent workers, a minimum liquid income and a copy of their last salary settlements are usually required.
  • For independent workers, income declarations and / or fee reports that prove their income.
  • Be the right age for signing contracts.
  • Have adequate financial and commercial background.
  • Copy of the employment contract, to prove seniority.
  • Have a Chilean nationality or be a foreigner with a permanent residence.
  • Valid identity card.
  • Personal health statement, in the event that insurance contracting is included.
  • Declaration of assets and liabilities with the documentation proving it.
  • Each bank may also require additional requirements.

Additionally, on some occasions the bank may request the client to present a guarantee or joint debtor, as a way of obtaining a second source of income in the event that the principal debtor does not fulfill his obligation to pay the credit. This requirement forms for the institution’s commercial policies and aims to reduce the bank’s risk due to customer default.

 

What are the main stages of a consumer credit?

What are the main stages of a consumer credit?

Once a consumer credit to be requested has been compared and chosen, and the conditions that it requires are met, the steps to request a consumer credit are as follows:

  1. Quotation of the credit conditions, which will be valid for no less than seven business days.
  2. Credit application:
    • Evaluation of customer payment capacity.
    • Declaration of health of the applicant for the contracting of the relief insurance, if applicable.
  3. Credit approval:
    • Signature of the formal document that obliges the client to pay the credit or promissory note.
    • Money delivery

As you can see, the requirements to obtain a consumer credit are quite simple to meet. Always remember to read, inform yourself and compare everything you can before choosing your credit, so that you choose the one that best suits your needs.

Credit from the armed forces

For many it may just be a phenomenon – for a few it becomes a reality: the armed forces loan. It is only approved in very few exceptional cases and, above all, is intended to enable temporary soldiers to finance important utensils.

The low-interest loan from the armed forces

The low-interest loan from the armed forces

If a soldier has committed to the armed forces for a certain period of time, he can take out a loan from his employer – the armed forces – under certain conditions. This loan is a very cheap loan, which is limited to a maximum of 2,500 USD and is used, among other things, for the establishment of your own household or for a marriage. However, anyone who wants to buy everyday items such as a car or plans to finance their next vacation will not receive a loan from the armed forces. Such things are not funded.

The banks also help out

The banks also help out

Since a loan from the armed forces is a low-interest loan, you should always ask the armed forces first whether a loan is approved. If this is not the case, time soldiers can always hope for the support of the banks and savings banks. They are welcome customers there because they are employed in the public service and therefore have a solid income and a secure job.

The credit institutions have very special loans for employees in the public sector, so that every time soldier can count on a cheap offer. Unlike a armed forces loan, banks’ offers are not tied to a specific purpose.

The borrower can freely dispose of it and does not have to provide proof of its use. In addition, the loan is not limited to $ 2,500, so that larger sums can also be raised. However, it should always be borne in mind that the loan can only be granted as long as the soldier is employed by the armed forces. Depending on the amount of the loan, it must be taken up in good time.

Need money for low-interest loan? Need it today? Can’t find lender bank?

If you find yourself saying, “I need money NOW!”, trust me. You’re not alone. If your bank account is empty and your credit cards are maxed out, what are you to do? The good news is, there are plenty of ways to get cash in your pocket in the next 24 hours. They may not all be glamorous, but you could rely on these methods in a pinch.

We are here to help. Let us hear from you in any financial needs.

What does your debt ratio say about you? | Debt Consolidation

We regularly hear about the debt ratio (also known as “debt ratio” or “debt level”) in the media (here, here and here again). It is indeed an important financial indicator to know the financial health of an individual or a company. An explanation over at http://wonderfactory.org

A bank, a financial institution, a lender, an investor or other will certainly want to know your debt ratio before you give more credit. This is normal because this indicator makes it possible to judge if you will be able to respect your monthly payments taking into account your income.

How to calculate your debt ratio?

How to calculate your debt ratio?

The calculation of the debt ratio is relatively simple. It is a question of adding all his income (work income, pensions, investment income, rent income, etc.) and dividing it by the sum of his recurring monthly payments (car payment, rent or mortgage). insurance, taxes, municipal and school taxes, payments on debts, etc.).

The result of this calculation gives a figure that can be expressed as a percentage, which is your debt ratio.

It is important to note that expenses not arising from “debts” in the broad sense are not counted in monthly payments. Thus, grocery, restaurant, telephone / internet / cable, electricity (Hydro-Québec), gasoline, recreation, etc. expenses will not be counted.

What is a “good debt ratio”

What is a "good debt ratio"

Beyond the calculation of the debt ratio, one must understand what the result means. In all cases, a low debt ratio is preferable. However, one should not worry if it is below 30% .

  • 0 to 30%: Excellent
  • 30 to 35%: Acceptable
  • 35 to 40%: At risk
  • More than 40%: Danger

If your debt ratio is above 40% , your situation is considered critical and you will have a hard time getting new credit. In addition, for your own financial health, you should stay away from such a high level of debt so that you have enough money for your savings and essential expenses like groceries, gas and some Hobbies.

How to reduce the level of debt?

How to reduce the level of debt?

If your debt ratio is critical and you want to lower it, there are no miracle recipes. You must either (1) increase your income and / or (2) reduce your monthly recurring payments.

To increase your income, you might consider getting a salary increase, changing jobs or finding a second source of income. This option is far from easy for everyone and may not solve the real underlying problem, the lack of control over your expenses.

So, you can turn to the second solution, which is to reduce your monthly payments. To do this, the very first thing to do is to stop buying on credit. Whether it’s your furniture, appliances, travel, renovations or anything else, these are expenses that should be paid in cash. This kind of spending is frequently the reason behind a high level of debt.

Then, review your budget and make sure to respect certain ratios for your expenses in housing and transport. Your home should not cost you more than 25 to 35% of your disposable income and you should not exceed 15% for your transportation expenses (car, gas, maintenance, insurance, etc.).

Of course, you can adjust these numbers if you are willing to make some concessions elsewhere in your budget. However, remember that it is the recurring monthly payments that count in the calculation. So, if you cut food for the benefit of your home, it will negatively affect your debt ratio even if in total, your expenses are equal.

What if my financial problems affect my debt ratio?

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If over the years you have accumulated a large amount of debt and you realize that a large part of your budget is confined to the payment of these debts, solutions are available to you.

First, you can turn to your financial institution and ask for debt consolidation. Debt consolidation will consolidate all your debts into one monthly payment.

This one-time payment is advantageous because the interest rate is generally lower. However, it is possible that your institution refuses you such a loan, precisely because of your high debt ratio which puts off them. If this is the case, a trustee in bankruptcy can offer you other solutions such as the consumer proposal.

The consumer proposal is similar to debt consolidation, but it also reduces the total amount of debt in addition to completely freezing interest. This is a statutory mechanism administered by a trustee to provide you with legal protection. This solution negatively affects the credit record but allows you to get out of the debt cycle once and for all.

Pawnshop: How does this type of loan work?

 The pawnshop is one of the oldest forms of credit. It has existed for over 2000 years in China and was established in Europe in the Middle Ages.

Pawnshell is a loan obtained after the deposit of property as collateral. The amount of this loan is proportional to the value of the property deposited by the borrower. The lender then retains the property as his own property or can even sell it if the borrower has not kept his repayment commitment within the time stipulated by the contract.

In which case should you ask for a pawnshop?

In which case should you ask for a pawnshop?

In practice, a pledge loan application is less restrictive than a conventional loan application. Like a personal loan without a credit check, the loan application can be very fast. This is why it can be useful when a fast money loan especially if the applicant already has several credits in progress.

In addition, part of the attraction of this quick loan is that you do not want to know why you need this money. The object can be claimed at any time within the period specified in the pledge acknowledgment, subject to full repayment of the loan, plus interest, service charges and storage.

How to apply for a pawnshop?

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The filing procedure is the same everywhere in Canada. There are many businesses willing to lend on pledge in Canadian cities. The pawnbroker asks the person how much they would like to borrow. If it accepts the object it puts in warranty, it makes a quick estimate. He then indicates the amount he is willing to advance and gives the client a pledge. In most cases, this loan will not exceed 25% of the value of the object left as collateral.

Which objects can be used as part of a pawnshop?

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The consumer can come with one or more goods. These goods are various objects and whatever their value. That’s why they are often a collection of heterogeneous objects. However, in Canada, pawnshops are increasingly specializing in precious metals.

Is the consumer well protected?

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With a bad reputation in the past, potential applicants may have some reluctance towards this loan. However, there is now a law on consumer protection. It does not contain only civil penalties, because the Office of Consumer Protection can, under this law, prosecute traders who do not comply with the law.

For example, according to this law, pawnbrokers must disclose to the credit agreement the annual credit rate they charge and not just the monthly interest rate. In the past, this part of the contract was frequently forgotten.

How to choose your pawnbroker

How to choose your pawnbroker

 

The Consumer Protection Act requires pawnbrokers to hold a license. Yet, today, many pawnbrokers still do not have an official license. We advise any applicant to check the validity of the lender’s license and to remain particularly vigilant. The pawnshop can be a very good alternative to other forms of personal loan for bad credit or payday if it is studied carefully.

The pawnshop is a good formula for an urgent loan of money and when you already have several credits in progress. The steps are particularly simple and the deadlines are very short. However, it is imperative to think carefully to study the legality of his lender and the confidence that we have towards him.

5 financial questions to answer before your wedding

Here are five things to talk about openly before getting married or living together.

 

Do not lie about debts and loans

money loan

Many people think that debts and loans are everyone’s personal thing, but are they the same with partners? Even if you have separate accounts , financial problems can have a major impact on your entire household. Whether it’s a non-bank loan or a car leasing, never conceal anything. You should hold together on debt. Together, you can better prepare a repayment plan, or a debt-free partner can hold you back.

Lying is definitely not worth it. Especially if you have decided on a common mortgage. If you or your partner have a bad payment history, you will have to wait until your goals are met. But if you are honest, things can move faster. After all, more heads know more.

 

Skimmer or rake?

money loan

Partners’ different attitudes to finance can play a bigger role in the relationship than you might expect. While one values ‚Äč‚Äčexperiences, the other favors material things or saves every crown, what if… What different priorities will be most apparent when the belts need to be tightened. An agreement on whose hobby it will save on can then lead to a really sharp debate.

It’s good to know your partner’s priorities. Sparrows and revelers must come to a common compromise that will at least partially satisfy both sides. Financial habits often come from childhood and are often a sensitive topic. Therefore, do not postpone their solution until the situation is tense.

 

Green joint management

money loan

Talk about the common farming regime. Who will be in charge of household and rental bills , who will pay for the purchase and whether to set up a joint account.

There are basically three variants:

Keep in mind that whatever your means of money management , your funds acquired after marriage are part of the non-share ownership of the spouses. So it doesn’t matter which account they’re on.

 

Finance and children

If you’re planning kids together , it’s definitely an opportunity for another talk about finance. The question is not just whether you can afford a child in the current situation. You will also be faced with the decision whether to save on his university studies, extracurricular activities or what the amount of pocket money should be and from how many years he has given it to the child.

You will need to find answers to these questions together. It is important to clarify them right from the start , at least to avoid unpleasant surprises in your partner’s attitude.

 

Do you have plans for retirement?

Maybe a premature topic and maybe not. Chances are you both want to save for retirement. But do you have a common vision of what your pension should look like? Find a place to discuss your ideas now. Then you will not be surprised that your partner wants to sell a house and travel while you were planning to spend your retirement playing golf and watching TV.