The Basics of Peer-to-Peer Loan – Easy Credit.

Reasons to take out a loan between individuals

Reasons to take out a loan between individuals

When banking institutions no longer lend to a certain category of people, obtaining credit by means of loans between individuals is still possible. As such, all negotiations are between individuals and can take place between friends, neighbors or between family members. Financial institutions can also put a private lender in contact with a debtor so that the latter can benefit from a credit. In order to guarantee the reimbursement of the funds paid, it is advisable to leave written documents detailing all the negotiations.

Advantages and disadvantages of taking out loans between individuals

Advantages and disadvantages of taking out loans between individuals

The option for the loan between individuals is often the ideal solution for those who cannot borrow from banking establishments to meet money needs. If this type of loan is made with friends or families, it can have certain advantages especially for the borrower both in terms of duration and monthly payment. The repayment tenure is often flexible and it is possible to have a zero rate loan.

A particular lender, especially if he is part of your entourage, in fact rarely applies a rate to borrow money. It is also one of the ways to really benefit from a loan between individuals without costs, neither before nor after the negotiations. So that the creditor can be assured that his money is fully reimbursed, it is always advisable to check everything in writing.

The amount borrowed, in numbers and in letters, and the duration of the repayment must appear. Each party must then affix their signatures. If the borrower later does not honor his commitments or has difficulty in doing so, the lessor can use them to succeed.

The zero rate loan or PTZ

The zero rate loan or PTZ

Apart from loans which are contracted between people who know each other, the State is currently encouraging households with modest incomes to apply for the Zero Rate Loan or the PTZ, in order to allow them to buy housing which will serve as their residence. main later. This type of credit is granted on condition that the house is new.

It is possible to request this operation if a person wishes to carry out renovation work so that his house acquires a certain level of energy performance. In this case, to obtain the credit, it is necessary to present documents justifying that you actually carry out work in this direction. The company in charge of the work then establishes a detailed estimate mentioning all the tasks to be done, and it is this latter which will be taken into account by the financial body so that it can grant the financing called eco-loan at a rate zero.

There is no interest to pay in these zero rate loans but it can be combined with home loans just as the applicant can bring his personal contribution. The repayment term can be short or extend up to 25 years depending on the borrower’s income. In order to guarantee full repayment of the credit, the institutions offering these PTZs must necessarily sign an agreement with the State.

Apply for loans online without going to the branch

Online loans are now a consolidated reality. For over 10 years, many financial companies have been giving the opportunity to apply for loans online without going to the branch. In fact, more and more Italians are requesting funding through the internet. Further confirmations of this phenomenon come from the research and publications of Crif, an observatory on consumer credit which attests the growth of online loans in the last year around + 3.4%. The reasons for the increase in requests for online loans derive on the one hand from a greater diffusion of technology: anyone now has a device (smartphone, tablet or PC) connected to the network, on the other hand from the ease and slenderness of the process itself.

 

Applying for loans online without going to the branch is in fact very easy

Applying for loans online without going to the branch is in fact very easy

For example, on our site there is a form at the top of each page: just fill it in with your personal data, select the amount you would like to obtain with the corresponding number of installments to return and send it. Within a few minutes you will be contacted by a consultant to evaluate your credit situation and receive more than one quote for free.

 

Apply for loans online without going to the branch: who to contact?

Apply for loans online without going to the branch: who to contact?

There are now many financial companies that offer the possibility to apply for loans online without going to the branch, but how to understand who to turn to? In fact, in order to obtain advantageous proposals and at rates in line with the market, it is necessary to choose companies that have been operating in the sector for years now. But this may not be enough. It can be considered a serious and reliable financial institution if it is recognized and adheres to agreements entered into with institutional bodies, such as INPS or NoiPA. For example, the first allows for transfers of the fifth at an advantageous rate to pensioners and the second allows all state employees to obtain loans at extremely affordable rates.

Astro Financing has been present in the credit sector for 11 years, adheres to both conventions and it is possible to read customer reviews online, on Facebook and on Google.

Apply for loans online without going to the branch, Call us now!

The most common types of loans for reconstruction

Reconstruction today can be solved by building savings, a special-purpose loan for reconstruction, or a special-purpose loan. Learn how it differs.

Building savings loans

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It is a classic well known to all, which I described in detail in the article how to use building savings for reconstruction. Here I would like to compare current offers of banks and introduce you to its practical use.

Banks today offer 2 types of building savings loans. The first type is represented by Sean Cole (Good Finance) and under the second type, I would hide all other building societies.

What is the other party

This building savings bank differs from other savings banks by a product called Loan from Good Finance. What’s going on? It is a building savings loan, where you do not have to deposit any down payment (for other building societies you do not also), but at the same time, you do not even have to grow up.

So, after repaying the loan, you repay the loan with the same installment as your mortgage.

The best example is

Let’s say you need 500,000 USD to renovate an apartment. With a bowler hat it could be set as follows:

Besides, of course, Good Finance also has a classic bridging loan (and a building savings loan). It already behaves like a classic building savings.

How far do you reach with Good Finance?

How far do you reach with Good Finance?

This loan is useful if you need a simple loan quickly. I can prepare it for a signature in a few minutes. It is not excessive, the administration is really simple.

Other building societies

This includes all building societies whose loans typically have two phases:

  1. Bridging credit
  2. Building savings loan.

The details of this function are described in the article how to use building savings for reconstruction, therefore I give an example to compare with the previous loan.

Again, an example

Today, the loan from Good Lender Building Society is a good representative because at the date of writing this article it offers a quality product in the price / performance ratio. I mean, it has a low interest rate for both the bridging loan (4.89%) and the regular loan (2.99%).

You can extend the maturity period up to 22 years and the maximum loan amount without collateral is USD 750,000. Let us compare the same amounts using the apartment reconstruction from the previous example:

How far do you get with Good Lender?

Special-purpose loan for reconstruction

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This is a consumer loan that the bank lends to you for a predetermined purpose, that is, anything related to housing. Maybe to renovate the bathroom.

A clear example

If we stick to the reconstruction of the apartment for 500 000 USD, then the loan could look like this:

Why did I choose GFIC? Its interest rate is the lowest for this type of loan. Furthermore, you can borrow for example for the reconstruction of the apartment up to 1 000 000 USD without any security.

This will in turn overtake building savings, where you can go to 750 000 USD, respectively. 800 000 USD, the disadvantage is almost half shorter maturity.

How far you can reach GFIC

Special-purpose loan

Special-purpose loan

It is a loan of the same construction as in point 2, but with the difference that here you do not have to worry about documenting receipts or invoices.

The last example

I stick to the reconstruction of the apartment for 500 000 USD, the loan can look like this:

As you can see, this is a short-term loan, with relatively high interest rates, which places demands on the client’s income. In other words, you have to have such a loan. The high interest is that the bank does not ask what you want.

How far you will reach GFIC II

Are you planning to renovate your apartment and need to take out a loan? Consult with me without obligation and we will definitely find what will suit you.

Negative Amortization – A growing credit balance

Negative amortization happens when the payments on a loan are not large enough to cover the interest cost. The result is a growing credit balance that at some point will require larger payments in the future.

Negative payback is possible with any type of loan and it is often seen with student loans and real estate loans.

 

How does negative payback work?

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To understand negative payback, it is best to start with simple old payback. Depreciation is the process of paying down a loan balance (often monthly payments) with fixed payments. For example, if you buy a home with a 30-year fixed-rate mortgage, you will make the same payment every month – even if your loan balance and interest costs decrease over time.

The monthly payments are calculated based on several factors:

  • The loan balance – how much you borrow
  • The length of time you will be repaying the loan (also known as the term)
  • The interest rate charged on your loan balance

A calculation is made with a fixed remuneration that your loans will pay off in full at the end of the period (usually 15 to 30 years for a loan). Every payment has two components:

  • Part of the payment covers interest on your debts
  • The rest of the payment pays off your debts (or reduces your credit balance)

To learn more and see sample repayment plans, at the bottom of this page, you will find a sample negative amortization chart.

 

When things go negative?

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With some loans, you have the option to pay less than the fully amortizing payment. The main reason to pay less is, of course, it is easier to pay less.

If you pay less than the interest in a given month (or whatever period applies), the interest cost will be added to your loan balance. In other words, you owe more each month. You haven’t really received any money from your lender, but your loan balance is growing because you are not paying interest.

The process of interest in a loan balance of addition known as capital, the interest.

At some point you will have to pay off the loan. This can be done in several ways:

  • Through regular amortizing payments (which will be higher than if the loan hadn’t grown)
  • By refinancing the loan
  • By paying a balloon paying off the debt

 

Why Use Negative Amortization?

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You have to pay either way, so why choose people to let loans grow?

Insolvency: Sometimes you simply don’t have the funds available to make payments. For example, in times of unemployment, you might not be able to pay your student loan. It is possible to apply for the deferment, which can temporarily stop the payments. However, interest is still loaded and you will have to pay the interest if you have subsidized loans. Note that you often have the option of paying the interest (while skipping the larger payment) if you want to avoid negative amortization.

Investor Loans: In some cases, investors are not interested in having to make large monthly payments. This applies particularly to short-term projects (for example a fix-and-flip). This is a speculative and risky way to invest, but some people and companies do it successfully. For the strategy to pay off, you have to sell the investment with enough profit to never pay off the interest.

“Stretching” to buy: Some homebuyers use negative amortization to buy a property that is currently out of their price range. The assumption is that they will have more income later and they would rather buy a more expensive property today than buy a cheaper one and postpone it sometime in the future. This is also a risky strategy – you cannot predict the future, and there are countless stories of expectations that never came true. Some examples of risky loans include option-ARM loans or pick-your-payment loans (which are not as popular as they are used).

 

Example of negative amortization

To see negative amortization in action, take out a loan and assume that you will pay less than the interest. The scale increases over time.

For example, suppose you have been repaid $ 100,000 monthly at 6% loan for 30 years. In this case we will not pay anything every month and you will see that the loan balance increases. You can build your own repayment plans and use any payment you choose.

As you can see, the amount of interest you pay increases each month – along with your credit balance.