Archives May 2019

Quick Loan Digitally Processed.

It sounds like the new buzzword in the credit scene: the fully digital quick loan. If one believes current studies, the demand for so-called quick loans among consumers is very high and that demand is also expected to grow steadily in the coming years. According to a recent FORSA survey, every second installment borrower in Germany (48%) is dissatisfied with the speed of lending. So taking this survey result at face value means that the entire loan processing process will have to be much easier and faster for financial institutions to implement. So if you want to win the credit-seeking consumer for a loan offer in the future, you also have to work actively in the credit processes. In this respect, it is not surprising that in recent weeks or months more and more frequently in press distributors of just those fully digital fast loans are mentioned. Synonymous with the fact that more and more financial institutions jump on this “train”. The supply of fully digital quick loans seems to be growing. But what does “fully digital fast loan” actually mean?

Combination of new technologies guarantees a real quick loan

Combination of new technologies guarantees a real quick loan

 

Basically, a fully digital quick loan with three simple buzz words can be described: No paper, no printouts, no way to the post office. Everything is handled digitally and that means above all 3 technological elements in the credit processing process. In the first step, of course, the online loan application, in consequence, the legally required personal identification Video Ident, the so-called Digital Account Check (credit rating and liquidity check) and, last but not least, the digital signature of the loan agreement. All these points considered together and technically reconciled means that taking up a loan through just that digitization is getting faster and easier. But just the topic of the last step of the digital signature under the loan agreement has hardly been offered to date. Even if Video-Ident and Digital Account Check were established, it was still necessary to sign the loan contract personally. But even at this point the change begins. With just that kind of signature, the final step in online borrowing is finally digitized.

The digital signature of the quick loan significantly speeds up the process

The digital signature of the quick loan significantly speeds up the process

 

The implementation of the digital signature in the online loan processing process now ensures that the signer is actually the one who has requested the loan online and identified by videoident process. When the processing has arrived at that step, an individual code is sent to a corresponding mobile terminal. The signature process is initiated with a previously defined password and the code sent. By entering and two clicks, the so-called signature contract is accepted. Subsequently, a TAN is sent after re-entering the personal mobile phone number and the password. If the borrower has entered these, the contract for the loan is signed as digital. The quick loan will then be paid immediately.


The Importance of Credit Score in Grant of Loans

No question: no one likes to lose money, give out goods without pay or likes to work for free. It is not without reason that in German usage the saying “trust is good, control is better.” What results in real life is, above all, banks, online retailers, mobile service providers, utilities and the real estate sector against possible payment defaults by customers with low credit ratings or more or less existing payment morality. Accordingly, if a bank is to grant a loan , the bank must be sure that it will get back the amount borrowed as agreed.

So information must be forth and these are delivered in Germany in the vast majority of cases by the SCHUFA or comparable companies such as Creditreform, Bürgel, etc. Based on the information provided by SCHUFA and Co. on the creditworthiness of a potential customer – especially the so-called credit score – companies decide whether and under what conditions a transaction takes place on credit or not. Catch on the matter? Again and again tests show that the data of the SCHUFA to individual citizens are incomplete, if not completely wrong and the resulting false values ​​of the credit score lead to wrong decisions at the affiliated companies. The final victim is always the consumer. And it is not uncommon for consumers to quite rightly wonder where the data from their SCHUFA has and whether you can collect this data?

 

Can the SCHUFA even collect data on individuals?

 

 Can the SCHUFA even collect data on individuals?

To answer the first part of the question: The SCHUFA collects data on the one hand by transmitting corresponding information from about 9500 affiliated companies and public debt directories, etc. And the second valley of the question of whether SCHUFA as a private company collect this data at all store and evaluate, must also be answered with a yes. The basis for this is the so-called EU General Data Protection Regulation. This regulation allows private companies such as SCHUFA to transmit and store data. The prerequisite for this is a legitimate interest, which in the case of Schufa is the protection against payment default for companies.

 

Continuous stumbling block: the SCHUFA credit score

 

 Continuous stumbling block: the SCHUFA credit score

In order to assess whether a payment default is imminent, SCHUFA has created a type of index or value known as the credit score. This credit score is the result of an evaluation of all collected credit data of a person. The value of the credit score can be between 1 and 100. It is true that the higher the value, the more solvent the customer and less the threat of payment default. However, it should be noted that a value of 100 is almost unattainable, because this would be the assumption of a payment guarantee for a third party at the same time. A guarantee that the SCHUFA simply can not and certainly would not give.

So far, so good, but just that credit score is a perennial stumbling block and that now no longer just for consumers and consumer advocates, but increasingly also for politicians. For as the credit score is ultimately calculated, a secret is that the SCHUFA protects like Coca-Cola its effervescent formula.

So there is the criticism of complete lack of transparency in the room and this criticism can not be dismissed out of hand. This is how people get a score value that often has nothing to do with the real economic situation of the consumer. In plain language: He is classified as a person of low credit rating, although the reality shows the complete opposite >>

 

  • Good, permanent salary from permanent, non-terminated employment
  • No debts
  • No variety of checking accounts
  • Continuous credit card with regular return

 

Etc., etc. So how can this result in a bad credit score? “Man” does not know, because according to a decision of the Federal Court of Justice in 2014, the Schufa may keep the calculation of the credit score secret (ref .: VI ZR 156/13). But this also means that this right of secrecy makes control of the procedure almost impossible. Although there is more and more opposition to this and politics is more and more involved in the demand for more transparency, but until something really relevant moves here, it will probably take some more time to get into the country. So first of all be aware of what you can do as a victim against a faulty or even false Schufa information.

 

SCHUFA information incorrect? That’s what you have to do!

 SCHUFA information incorrect? That's what you have to do!

For this purpose, it is basically necessary to know what the SCHUFA has in store for personal data. In order to find out, you as a consumer have the right to demand a so-called self-information once a year free of charge. On the basis of this self-report, it can already be recognized to what extent erroneous or even incorrect entries are stored at the SCHUFA. It must be made clear that the correction, deletion and blocking of incorrect data is mandatory for SCHUFA. This is NOT a performance on the part of SCHUFA for reasons of goodwill.

If data is to be corrected or deleted, the following procedure has proven to be valuable:

  • informal letter to the Schufa
  • Alternatively, contact the company directly, which is responsible for the incorrect entry
  • describe exactly what is wrong and if possible attach evidence / evidence
  • in case of problems with the SCHUFA turn on the ombudsman

In general, it should be noted that in dealing with the SCHUFA a certain persistence and resoluteness can be helpful.

 

 


The Classic Post-Identification Process, the Application Process

In times when the term automation is a standard in many production areas as well as in the service industry, customers profit not only from lower product costs, but also from ever faster processing operations. Only in the financial services industry is the so-called automation moving in very small steps. This is, of course, due to strict legal requirements regarding data protection and IT security, but also to the technical development itself. Even though there are now numerous offers in the form of app’s, it turns out that even in the processing of various banking products there is still room for improvement. A typical example of this is the online application for a loan .

Old methods slowed down lending despite the Internet considerably

 Old methods slowed down lending despite the Internet considerably

After all, 25 million loan applications had to be processed by German financial institutions in 2015 alone. An enormous work potential and thus ideally suited to simplify the individual process steps in the loan processing – that is: ” to automate “. The processing process for a loan offers more than sufficient starting points. First and foremost, on the topic of credit check and identification. The usual process for an online loan meant that the applicant had to send numerous documents via fax, e-mail or post to the bank. On submission of these documents, in conjunction with the SCHUFA information, it was determined whether the desired credit could be granted under the present economic conditions of the customer.

If a positive credit decision resulted from this check, the customer’s personal identification still had to be carried out. In practice meant to go to a post office with a piece of paper and his identity card and be identified there. The whole then again sent by mail to the bank. Duration of the whole procedure despite online loan application at least 9 working days . Due to postal delivery times, weekend and internal bank processing.

New technologies turn a loan into a real quick loan

 New technologies turn a loan into a real quick loan

With such a process, the fast credit often offered on the Internet became absurd. But in the last 2 years, thanks to the video-ident method, which replaces more and more the classic post-identification process, the application process has already accelerated significantly. So the topic still remains with the sending of documents. But even here, with the introduction of the Digital Account Check, a solution has also been found to significantly accelerate this process step. This technical solution enables the applicant to submit the account movement documents relevant to the application digitally and in real time. This is now possible without media disruption, which in the previous process – printouts of bank statements, mailing by mail, digitization in the bank and costly checks in the bank – often led to demolition.

The data are also checked in real time and analyzed comprehensively. An appropriate recommendation is sent so that the bank can make a quick and secure credit decision. Thus, the customer can immediately be notified of a valid credit decision. And that’s how an online loan turns into a real quick loan.


An Installment Purchase or a Borrowed Financing Model Initially Means a Negative Entry

Banks ask the schufa of the applicant for every loan application. Accordingly, its score is an important criterion for granting or denying the loan. But does a Schufa entry always automatically mean that the bank does not lend? Up to which limit are the score values ​​okay and what influences the Schufa score at all?

The Schufa score as a sign of creditworthiness and creditworthiness

The Schufa score as a sign of creditworthiness and creditworthiness

The Schufa Score represents the end result of different values, which together add up to the risk a borrower presents to the lender. This means that scores about different circumstances are analyzed. How exactly they are calculated, about the Schufa gives no information. However, the results of the analyzes provide lenders with information on whether and if so, with what probability, a borrower is repaying his debts.

One of the factors that influence the Schufa score is the economic situation of a borrower. It is therefore checked how regular and how high the monthly income and expenditure are. For this purpose, data such as income and assets are queried – the work situation is also included. Issues such as fixed-term contracts, agency work or whether the borrower is in training or in the probationary period have a negative impact on the Schufa score.

The income is compared with the account outflows. That is, fixed costs, repayments and similar, regular expenses such as mobile phone contracts, installment purchases and others, are offset against the amount of income. If there is still sufficient credit remaining after this calculation, chances are good that an applicant will receive a loan.

What influences the Schufa score

Consumers who are clients of several banks or financial institutions must have a particularly high income so that this does not have a negative impact on their Schufa score. Frequent account changes, unused checking accounts and credit cards should be avoided by consumers. The part payment function for credit cards can also adversely affect the score. By contrast, long-term customer relationships with as few financial institutions as possible have a positive influence on the Schufa score.

If the checking account is regularly or even overdrawn for the long term, this can also lead to a negative valuation. This also applies to a small credit line. When granting loans, banks assume that a higher credit line means that the applicant is liquid and trustworthy. However, of course, only if the disposition credit is either not or only occasionally used. And above all, if he is served regularly and thus paid off.

Overall, the consumer’s payment and willingness to pay is a key criterion to be considered when applying for a loan. If installment purchases are settled reliably, invoices and open receivables paid on time, then this has an effect on the customer’s trustworthiness. And that means the Schufa score goes up.

Every quarter a new opportunity

 Every quarter a new opportunity

 

The Schufa score is updated every 3 months. So if you have a negative entry, you can actively increase your score by improving your payment history and, in the event of payment difficulties, transparently communicating financial bottlenecks to the creditor. For a loan approval, the Schufa score should be between 95 and 100 points .

Does every Schufa entry mean a rejection of the loan application?

 No, not every Schufa entry is an exclusion criterion. Because the Schufa score includes both positive and negative factors. If the positive aspects outweigh, this means a higher probability that a loan will be granted. A negative entry can be compensated accordingly by a positive.

For example, an installment purchase or a borrowed financing model initially means a negative entry. But if the installment payments are settled regularly, reliably and on time, without being maneuvered into a financial shortage, then there are positive reviews. In this case, the payment morality and reliability of the applicant outweighs the actual negative entry on the use of installment options in general.

At the Schufa review in the context of an application for a loan consumers should therefore first of all keep calm. Often the Schufa score is not as negative as your own assessment might suggest. And if it does, you can actively counteract and increase your own value again.

 

 


Installment Loans- Repayment of Loans in Austria

Installment loans in Austria: what role does special repayment play?

Installment loans in Austria: what role does special repayment play?

Installment loans are granted in Austria, as well as in many other European countries, mainly via the internet. Credit calculators usually play an essential role. Anyone who is interested in an installment loan, in many cases uses a loan calculator to get a first look at the terms. Depending on the use of the loans, there are some loan offers for this project, as well as various usable installment loans. However, before a loan is taken, it should be carefully assessed what the financial position is and what installments can be paid each month to pay off a loan.

The best banks and providers in Austria can be found here:

First Bank ING DiBa
First Bank ING DiBa
to offer to offer
from 3,000 euros from 5,000 euros
up to 50,000 euros up to 50,000 euros

For loans up to 600 Euro we recommend Cashper and up to 1,500 Euro Cashpresso.

How do I determine my financial capacity for an installment loan?

How do I determine my financial capacity for an installment loan?

Who wants to take a installment loan, should know exactly how much money he can take for it each month in the hand. Loan repayment is underestimated by most people and many do not even know how much money is available to pay for a loan each month. In practice, however, it is quite easy to determine what the maximum sum that can be spent on a loan on a monthly basis is. If this has been defined accordingly, it can be precisely calculated which loan amount can be repaid, for example, over a term of 10 or even 15 years.

Monthly expenses and revenues

Monthly expenses and revenues

For example, monthly expenses include rent, electricity, gas / oil and water. Anyone who has constant spending here can simply take the monthly value for the warm rent and list it in an invoice. Added to this are the costs for eg a car as well as the costs for the household. Clothing, food and insurance should also be included in their cost with a monthly value.

Here is an overview of all the possible expenses incurred by most households who want to take out a loan:

  • rental fee
  • Car (fuel, tires, repairs, insurance )
  • food and beverages
  • household products
  • clothing
  • vacation
  • Insurance
  • Internet and telephone

Further additional costs and expenses

Further additional costs and expenses

The cost of the holiday is very much forgotten by most people when they decide to take out a loan. It should be remembered that life is not just about getting a loan repaid, but also about having a vacation to relax, for example. Depending on the number of people in the household, a sum of 500 to 2,000 euros per year should be planned for a long and relaxing holiday.

Very many costs can be recorded in the lineup without any problems on a monthly basis, since they are also billed monthly in many cases. Anyone who takes his monthly net income and subtracts from it the sum of the averaged monthly expenses, sees exactly what sum he has, for example, for the repayment of a loan. It should be noted, of course, that it must be taken into account that a certain buffer should be taken into account.

Which credit period is recommended and how can it be shortened by a special repayment?

Which credit period is recommended and how can it be shortened by a special repayment?

As regards the repayment term, this should be determined according to the object to be financed or the service to be financed. If you want to use your installment loan to finance a car that you use over a period of 5 years, you should not take out a loan with a term of 8 years. The period of use of the product should always be significantly longer than is the case with the term of the loan. It should be noted in principle that the term can be shortened by special repayments. How this works is very easy to describe:

A borrower receives a loan amount X and pays back in monthly installments. On the one hand, the monthly installment is made up of a portion that repays the loan and, on the other, the interest rate that is charged on the provision of the loan is also covered by the monthly installment. Basically, this monthly constant burden ensures that the loan is paid off over the term. If you want to accelerate this process, you can make so-called special repayments depending on the loan project. These are suitable for paying off a loan with additional sums much faster.

Conditions for special repayment

Conditions for special repayment

Special repayments can, by simply transferring the selected sum to the credit account, make it possible to pay it off much more quickly. In principle, however, there are different conditions that have to be taken into account for special repayments. Depending on the loan project, it is possible, for example, that large sums of money can be paid back without any problems. In the case of mortgage loans, the special repayments are usually limited in their amount, so that only a certain sum in the year can be repaid in addition to the usual installments.

Those who opt for a normal installment loan, this can easily shorten this by a special repayment, or pay off much faster. Often there is no limit on the amount of the special repayment, so that in the long term corresponding special repayments can pay off the loan very quickly. In part, it is possible that the still open loan amount can be paid off in one fell swoop from now on the same. Costs do not arise for the special repayment usually.

Special case of construction financing – how are special repayments regulated here?

Special case of construction financing - how are special repayments regulated here?

Anyone who has taken up mortgage lending, for example, a sum in the amount of 200,000 € and repay the loan with monthly installments, will also come up with the idea here, to want to perform a so-called special repayment. As a rule, this is also possible, but the amount of the special repayment usually depends on the amount of the borrowed credit.

Annual repayment

Annual repayment

In many cases, a sum of up to 5% of the original loan amount may be repaid once a year as part of the special repayment. This means that with a fictitious loan amount of 200,000 euros each year in addition to the fixed installments, a sum of 10,000 euros can be paid. This should ensure that many loans can be cleared much faster than would be the case without special repayment. In most cases, the entire loan can be cleared much faster with the help of special repayments.

Monthly repayment

Monthly repayment

The bank specifies to the borrower exactly when he can effect the special repayment. As a rule, the repayment can be submitted every month. The relevant cut-off date is usually specified in the loan terms up to which the special repayment transfer must be received so that it can be taken into account in the total loan. Anyone researching over the Internet will quickly realize that special repayments can be made very easily and some banks even offer higher special repayments.

Confirmation by the bank

If the special repayment has been successfully completed and the corresponding amount has been transferred, the bank will confirm this in writing to the borrower. Many of the current loans can be calculated and completed over the internet. For a loan, therefore, the borrowers have a corresponding digital mailbox. Here is usually a confirmation filed in the form of a .pdf file, which confirms the receipt of special repayment. At the same time, customers can see in the login area about their credit, how the special repayment made affects the entire loan and when it is completely eroded.

  • Special repayments help with early loan repayment
  • For real estate usually up to 5% repayment per year are offered
  • Small loans can usually be replaced “in one fell swoop”

What advantages does a good loan calculator offer in financing planning?

What advantages does a good loan calculator offer in financing planning?

If you have a good loan calculator and would like to plan your financing, you will also be able to consider so-called special repayments here. This means that the loan calculator can take into account the amount of monthly installments as well as the amount of the annual special repayment. With the help of these two parameters can be specified exactly when the complete loan is paid off and how long the eradication thus lasts.

Another advantage is that the loan calculator can help in financing planning to determine which maximum loan amount can be borrowed. Depending on how high the monthly sum that can be spent on the loan, the loan amount that can be taken up to a maximum and can also be paid within the term differs.

What happens if I can not pay the loan within the term?

What happens if I can not pay the loan within the term?

Should it happen that the loan can not be paid within the fixed interest period or the term, this can lead to a follow-up financing being required. Of course, this depends on the current conditions on the market. This means that shortly before the end of the term of the loan should be contacted with the bank in order to determine exactly what a follow-up financing looks like, or at what conditions this would be possible.

follow-up financing

follow-up financing

If your loan expires over the coming months in terms of fixed interest rates, borrowers need not worry about how to find attractive follow-up financing. In practice, this means that due to the currently very low base rate, financing can be concluded on the whole at very attractive conditions. Loans with an annual interest rate of less than 5% pa can easily be determined via the internet using credit calculators. If the loan is a real estate financing , it is quite possible that corresponding conditions can be determined online here. Often interest rates of less than 2% per annum are offered, but this is also dependent on the amount of equity. If the equity capital is high enough, it can also be the case that the residual debt can be repaid in one go and no follow-up financing must be completed.

What money goes into the special repayment on a loan?

What money goes into the special repayment on a loan?

In many cases, there are special payments that are used to pay off a loan by special repayment faster. Bonus payments, holiday pay and the Christmas bonus are often used to complete mortgage lending much faster, or to pay off a installment loan faster.