What is a consumer loan

The desired total amount is fixed. It should be noted at the outset that consumer credit is also referred to as installment credit, acquisition credit or counter-credit or reimbursement credit. Consumer credit and consumer credit for the purchase of consumer durables and consumer durables. In the installment loan, a certain loan amount is transferred to the borrower on specific terms. The repayment amount can be agreed in several ways.

A consumer credit – what is it?

A consumer credit - what is it?

It should be noted at the outset that consumer credit is also termed installment, acquisition or counterparty credit or reimbursement credit. The consumer loan is a loan for an amount to private individuals, which in turn is to be paid in constant monthly amounts, ie in partial amounts, at a fixed interest. Consumer credit is usually provided by banks under different names such. B. Car loans.

In addition, consumer loans are generally uniform products for private customers and are among the most common loans. In most cases, they are issued without collateral, ie as unsecured loans, although the contract only provides for the assignment of wages and salaries as collateral. It should be noted that the repayment of consumer credit must always be in equal monthly installments, which include both the repayment of the loan and the interest and possibly bank charges.

In addition, interest rates on consumer credit are generally higher than mortgage lending rates but often lower than overdrafts. If certain conditions are met, the house bank also has the option of canceling the consumer loan. The credit institution may therefore terminate the loan only if the borrower is wholly or partially in arrears with at least two consecutive tranches and, with a residual maturity of the installment loan of less than three years, is at least ten per cent, or

It can be concluded that consumer credit is the opportunity for large investments or purchases with little or no equity. Preliminary purchases as well as the distribution and predictability of the costs speak in favor of consumer credit. Early purchases are understood to mean that investments can be made in spite of low own funds or even without own funds.

Expenses for a consumer loan

Expenses for a consumer loan

In addition, the corresponding expenses for a consumer loan are spread evenly over the term of the contract, which protects the solvency. In addition, the level of monthly loan interest can be set in relation to free earnings, ensuring a regular and predictable monthly burden. However, it should be noted that a spot purchase is always cheaper than a consumer credit; because if everyday goods or consumer goods, such as home furniture or electronic devices or travel items, are co-financed by installment purchase or a consumer loan, can quickly pile up very large debts.

Therefore, a distinction is made between short-term financing, medium-term financing and long-term financing. In the case of short-term financing, it should be noted that short-term loans usually offset funding shortages, for example, for a few weeks or a year. Medium-term financing, such as the purchase of medium-term consumer goods, can in turn be provided through consumer credit.

Although the need for credit is greater than for consumer credit, the purchases are a permanent equivalent. It should be noted that consumer credit is essentially a loan that is not linked to an investment or a specific objective.

Consumer credit thus includes all loans that are used for indefinite purposes and are usually not linked to collateral. For the purpose of collateral, a salary statement may be made under the contract, as consumer credit is granted primarily to private individuals. They are also used by the borrower for medium term purchases such as: B. used for furniture, motor vehicles or for travel.

Consumer loans are, as has already been said, granted by financial institutions or by credit institutions and savings banks in installment loan form. In addition, consumer loans are settled in constant tranches with fixed maturity and agreed interest. In addition, consumer credit is usually granted for a maximum of 84 months, but in some cases for one hundred and twenty-one months.

It should also be mentioned that consumer credit is often cheaper than current account credit.

SAVING WON’T WIN – Loans

The announcement of a new interest rate tax on savings deposits has not alerted domestic depositors. Croats do not withdraw their savings because interest is higher at homeI

Interest rates on savings and loans

Interest rates on savings and loans

Moving savings elsewhere in the EU, analysts note, is not worth it because in Croatia, although interest rates are steadily falling, they are higher than elsewhere in the EU, while savings interest taxes are much higher there . If the number of depositors is reduced due to taxation, interest rates on savings and loans will probably follow.

The announcement of the introduction of a 12 percent tax on savings interest on the first day of next year did not upset savers and initiated the withdrawal of savings, banks can hear. However, there will be no withdrawal of savings even after the tax is truly introduced, financial intermediaries are convinced.

Moving savings elsewhere in the EU, they note, is not worth it because interest rates are here, although they are falling steadily, but more than elsewhere in the EU, while savings interest taxes are much higher there. If, however, the number of depositors is reduced due to taxation, interest rates on savings, and thus on loans, probably follow.

Secured deposits

Secured deposits

In other EU countries, savings interest rates are around one to 1.5 percent, while in Croatia, as a result of high interest rates on loans, they are between 2.5 and 3 percent. On the other hand, while savings interest would be taxed at a rate of 12 percent in our country, elsewhere in the EU it is at a rate of 15 to 30 percent. In Italy, for example, the tax is 20 percent, in Slovenia, where tax on savings from savings exceeds one thousand euros, the tax is 25 percent. In Hungary it is 16 percent, in Austria 25 percent, in Germany the same. Savings earnings are taxed in Serbia at the rate of 15 percent, except for savings in local currency, in Montenegro the rate is nine percent.

According to previous announcements, Croatia will be taxing savings (not equity savings) in excess of USD 12,000. Croatian citizens hold around USD 165 billion of time savings in banks, mostly for one year, with savings mainly in euros, directed towards non-risky savings, represented by the insured deposits of banks, up to one hundred thousand euros. Such insured deposits account for 95 percent of the total savings, which means that only about 5 percent of the total savings will be covered by the tax, or, it is estimated, about 60,000 depositors. On the example of one such big savings, and with the first non-taxable profit of USD 12,000, someone who, with an interest of 2.5 percent, has a savings of USD 1 million and thus a savings income of USD 25 thousand a year, will pay tax on USD 13 thousand of savings income. , in the amount of USD 1,560. Even such savers are not worth saving for moving elsewhere in the EU, where interest rates are lower and taxes are higher, as confirmed by banks.

Stable growth

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Honest Bank say that, even if a tax is introduced, they do not expect a significant effect on savings levels, nor have they noticed any changes in the behavior of clients. Despite the downward trend in interest rates, citizens still say they are predominantly opting for low-risk instruments, primarily deposits. In the first three months of this year, Fyre Bank recorded a steady and steady increase in the savings of the retail segment, so that at the last day of March, retail deposits with them amounted to about USD 25.2 billion, which is about six percent more than in the same period of 2013.

Interest taxes on savings in Europe »Austria 25%
»Slovenia 25%
»Germany 25%
»France 24%
»Italy 20%
»Hungary 16%
»Czech Republic 15%
»Serbia 15%
»CROATIA 12%
»Montenegro 9%

Good Finance has seen an increase in retail deposits in recent years and there are no visible changes in this trend. The level of savings interest rates in Croatia is still higher than in most EU countries, but given the available sources of financing, it is in continuous decline. The effects of the announcement of the new tax will only be able to be estimated after the model of the new tax has been worked out, ”Baba replied, while even at Hyper Bank they did not notice the withdrawal of citizens’ savings.

Future trends, however, are difficult to predict given that details of savings interest taxes, primarily taxable amounts, are not yet known, as well as whether the possibility of certain interest relief, such as home equity tax credits, is foreseen. offset the introduction of a new tax so that it does not put additional burden on citizens.

Most EU countries have savings taxes, many of them with the aforementioned benefits, and interest income is exchanged among member states, so taxing savings interest should not be a driver for moving savings to other EU countries, “concluded Hyper Bank. ABC briefly replies that the trend of savings growth continues this year, Cooperative Bank Bank reports, however, that their savings situation is stable.

Foreigners with us

If it has been announced so far – that interest will be taxed on savings in excess of USD 400,000, most citizens need not be concerned, but the “ballooning” of new taxes in a tax-strained and economically wrecked country may not be good – he thinks financially Mr. Vladimir. Over the past two years, interest rates on deposits have fallen as much as thirty percent, and in the long run will only be even lower.
– If we want low interest rates for corporate and retail lending, we must also have low passive interest rates. Developed countries, through low-cost lending, as one of the measures, stimulate economic development, so that citizens earn money actively, not passively, through term deposits, says Peretić.

As noted in the Progresor Group for financial intermediation, interest rates on loans to citizens are quite high in our country, which is why interest rates on short-term retail deposits are more favorable. Savings interest rates in England, France, Germany, Austria and the UK range between one and 1.5 percent, resulting in a large number of term savings in our foreign-owned banks, around USD 8.2 billion, and a large number of unfavorable loans repaid by Croatian citizens, say the Progresor Group . The government, they note, will introduce a new source of funding with the introduction of this tax, but will increase the cost of bank funding.

What Means Credit

A loan is usually understood as lending money from a lender to a borrower under certain conditions. Accordingly, a loan repayment is recommended, especially in times of low interest rates. If the borrower is unable to pay his installments, the lender has the option to dispose of the related assets. Lending can be provided by a variety of credit institutions and is backed by collateral or guarantees, especially in the case of large amounts. Bad loans are loans that, from the lender’s point of view, are associated with a very high risk of default or whose repayment is unlikely.

And what is a loan? credit definition

And what is a loan? credit definition

In the case of a loan, the lender (= creditor) lends money to the borrower (= debtor). It is usually concluded for a certain period of time, during which the borrowed loan is repaid to the payee. This can take place in regular tranches that are either the same for the entire duration (= annuity) or consist of a fixed repayment amount plus a steadily decreasing interest payment due to the falling debt amount.

The maturity loans are repaid at the end of the current period in a single amount. In addition to the loan amount, the borrower must pay interest, which is also arbitrary. However, this is usually determined and determined by the payee according to certain standards. The interest on the one hand provides a certain risk premium for the lender, since in the case of the insolvency of the debtor, the full amount of the loan is not reimbursed.

Here, the creditworthiness of the borrower is of great importance. In addition, a surplus for the lender should be generated at the end of the term of office. The granting of loans is a form of investment for him. The term “credit” comes from the Latino “credere”, which means “believe”, but also means “trust”. The creditor relies on the creditor’s ability and willingness to repay the loan on the specified terms.

If the amounts are too high, the creditworthiness of the borrower is too low, the borrower can be given a security. This results in the security if the loan is not repaid as agreed. However, the realization, ie the purchase of security, means an extra effort that the lender would like to forego.

Check credit now! What kind of loans are there? Below you will find a selection of the most common credit types – with a mouse click on the respective subpages you will find further explanations and explanations.

What significance does the compensation have in the case of a loan?

What significance does the compensation have in the case of a loan?

A disclaimer increases the creditworthiness of a business and often makes a loan possible. This is usually important if your own security features are not available or not sufficient for securing a loan. For whom is the loan for the self-employed? In principle, an applicant must be liable for a loan transaction. Only if the collateralization of a loan by a self-employed person or a private borrower is not sufficient can the medium-sized bank or a state promotional bank make use of liability exemptions.

Which state can be exempted from liability for a loan transaction? As a rule, the house banks are 100% liable to the development bank or the regional banks for the repayment of a loan. In the event of damage, your and the development bank will bear the damage within the specified quota. The disclaimer thus favors the credit of your lenders.

You are obliged to provide the usual bank securities. 2. In the case of non-liability loans, however, at least the capital goods must be used as collateral. If a loan from Intrasavings-Bank or Landesförderbank is not relieved of liability for a loan, self-employed persons can claim from the guarantee bank a guarantee for the equipment and participations of 50% to 80%.

This increases the credit security and thus the creditworthiness. The classic form of lending by Intrasavings bank is borrower’s credit. For investments and working capital with maturity, the borrower grants a 50% exemption. Such a disclaimer of a Landesbank increases the collateral for the loan for the Intrasavings bank.

Cheap interest which bank

However, they can not take into account how the banks to be compared assess the creditworthiness of those seeking the best interest rates. The credit of a bank and the creditworthiness for the individual customer depends essentially on the creditworthiness of the customer, ie his credit rating. The results of operations determine inter alia the lending and the interest rate dependent on the creditworthiness. Find cheap loans with the installment loan calculator. Today you are spoiled for choice and can quickly and independently compare the best online loan options between many banks.

Which financial institution has the best interest rates?

Which financial institution has the best interest rates?

It is known that interest rates on personal loans depend on the creditworthiness of the debtor. Nonetheless, many Internet portals feel that their comparison calculators and tables make it very easy to find out which bank offers the lowest interest rates on loans. However, they can not consider how the bank to be compared assesses the creditworthiness of those seeking the best interest rates.

As a result, they usually compare loan interest rates, which credit institutions identify as the cheapest interest rates for customers with high credit ratings. If the adjustment relates only to the minority of allegedly loan-independent loan offers, credit institutions offering the best interest rates on loans are certainly excluded (see also reconciliation of non-credit and credit rating-dependent loans).

To what extent a bank determines your creditworthiness, ie which it assigns to you on the basis of your individual circumstances, is completely unclear. The bank can act as if it had the cheapest interest rates on loans, but then demand from the individual the desired high interest rates for allegedly insufficient creditworthiness. The risk premiums for real credit deficits are also calculated differently from bank to bank.

For example, for a borrower with a high credit rating, one bank may be the cheapest, while another bank may be the cheapest if credit is bad. Some banks are trying to attract particularly many low-interest clients and then convince as many people as possible of the expediency of a higher interest rate for lack of creditworthiness. 2. The others prefer not to pretend that they have the cheapest interest rates, so that not so many consumers jump out because of higher interest rates on loans.

Interest rates

Interest rates

Therefore, credit institutions that do not talk about lower interest rates than the lower limit are among the cheapest. The less a bank can take on the loan, the lower the loan amount and the repayment term. For this reason, the best interest rates are to be expected for medium-sized loan amounts and due dates. The reason for this is that there are no significant personnel costs for the individual support of the client locally.

Ultimately, it’s just a matter of “Which bank has the lowest interest rate on your personal loan needs”? Anyone who needs a loan amount must be subject to or relinquished to the bank’s corporate policy. If you really want to know which bank has the best interest rates for you, you can only proceed as described in our article “Only then can you find the cheapest loans …”.

How to save on daily purchases

An average family living in a big city spends on average 20,000 – 30,000 rubles a month on food. The peculiarity of edible purchases is that it is very easy to lose composure and spend a lot of extra money. And if you do not pay attention to this, then your finances can get out of control. What can adversely affect your household money.

Familiarize yourself with common mistakes that are common in such cases and learn how to save on purchases.

Shopping in one store only

Shopping in one store only

Very bad idea! If you buy everything in one store, you are likely to pay more than you could by buying products in different places.

You can save more than 30% by simply changing your diet. Go around all the shops available to you and check out the prices. Do this periodically because the prices of the same products may change from time to time.

Yes, you, most likely, will spend a lot of your precious time on this, but then comparing these costs with the amount of savings, you will be pleasantly surprised.

Go to the store without a list

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You should always go to the store with a list of purchases that need to be purchased, acting according to plan, you will save money on impulse purchases. Of course, if you act according to the list you have prepared in advance. This is the most important point for those who are thinking how to save money on purchases.

Pay by card

Paying a credit card, people often do not pay attention to how much money they give at the checkout. Form a budget for products for the whole month or from pay to salary, put cash in a safe place and, after going to the store, take a certain amount. It is usually more difficult to part with physical money than with numbers on the tap of a telephone or computer. From here, a more careful attitude to finances and, accordingly, more precise control should follow.

Buy only branded products

Buy only branded products

Many of us are accustomed to trusting a certain brand that has shown itself from a good side and, it seems like there is no point in changing it to something else. At the time, as on the shelves of the store may be less well-known instances of not inferior quality. Try testing other manufacturers.

Do not buy products for special offers

This is not about the fact that you need to throw in the basket all products for which the action is valid. And the fact that if these purchases are on your list, then they need to be taken. If you know for sure that your family, for example, eats meat well and the price is now lowered at the store, buy it at once in large quantities and freeze what you don’t eat in the near future.

Do not look around

Have you ever wondered how the shelves are located in the store? Most likely, yes, and you know that they differ from each other in the categories of goods that are located on them. But do you always pay attention to how exactly the products and other future purchases lie on the shelves of these racks? On them, valiant merchandisers like to put on the shelves lower bright and beautiful packaging that children like on the shelves that are at the level of your eyes the most expensive purchases, and at the very bottom or at the very top the cheapest options.

Do not be lazy to see all the offers, it happens that you choose cereals, for example, is cheaper than the other, but it will have a smaller packaging.

Often buy convenience foods

Yes, it is convenient and, again, can save some time. But, if you are thinking about how to save money on purchases, then remember that it will always be more expensive to buy ready-made products in the store or semi-finished products than to buy the necessary ingredients and cook yourself. This also applies to pre-packaged products. It is best to always weigh fruits and vegetables yourself.