MonthJuly 2019

Which loan is worth choosing?

There are few situations in life where you need to make such a well-considered, thoughtful decision as you would with a borrower, as it can be decisive for your finances for many years to come . That is why we help you to collect the most important questions that you need to ask yourself before you commit to a loan.

What is your purpose with the loan?

What is your purpose with the loan?

The first step in choosing a loan is to think carefully about what the loan needs . You can usually take out a loan for specific purposes only on more favorable terms than a free use loan. A typical loan goal might be a home or a new car, but if you want to decide what you want to spend on your loan for, you might want to consider free loans.

It is better to take out a loan for a specific purpose, as banks see less risk in targeted lending than if they cannot control what the money is going for. For example, in the case of a mortgage loan, we can apply for a home loan at more favorable interest rates than if we wanted a free-use loan. Lower risk, lower interest . The situation with an unsecured car purchase loan is the same: you can expect a lower APR than a free-for-sale personal loan.

Are you willing to raise funds?

bank

If you have collateral for your loan, you may want to choose these loans, because collateral can get you money on better terms than a personal loan. The reason for this is that banks consider such a loan less risky, as in the worst case they make money on the pledged real estate or movable property.

You can take out a mortgage with a minimum value of 4-6 million HUF. Some banks already accept a car with a maximum of 12 years as cover for car loans.

How much does your credit cost?

bank

After all, in a difficult situation, however much we pay for the administration. Therefore, it is by no means a negligible aspect what the upfront costs are. The upfront costs of mortgages are extremely high compared to other loans, as there is a separate charge for, for example, valuation or credit brokerage.

The full APR includes many of these costs, so it is advisable to list the banks’ quotes according to the APR in the loan calculator. However, the THM does not include, among other things, the notary’s salary, which by default is at least HUF 70 thousand. And for personal loans, we are waiting for the disbursement fee, the credit appraisal fee, the management fee, and there are some where the bank requires you to have a loan collateral to borrow.

How do you plan ahead?

How do you plan ahead?

When choosing a loan, you also need to decide what kind of long-term loan you choose. If you are more cautious, it is worth thinking about the longer term , so that the family cashier can safely miss the installment payment for the month.

If it turns out, you will have the option of early repayment or early repayment, because paying these fees is still better than a higher-interest, shorter-term loan. Prepayment is when the borrower pays a minimum of at least 3 monthly installments. If someone pays the entire outstanding debt, it is a final repayment.

Good Finance Calculation for Baby Loans

Little is known about the credit assessment so far: what is available is the baby loan regulation. This states that banks determine creditworthiness in accordance with their own internal regulations.

Under the regulation, loan applicants must also comply with the Good Finance regulations , which will become stricter when the baby loan is launched, on July 1st.

Find out about the terms of your baby loan and check if you qualify for the $ 10 million interest-free loan!

What exactly does Good Finance mean?

What exactly does Good Finance mean?

Good Finance stands for Income- Based Repayment Indicator . It is a part of the debt control system developed by the National Bank of Hungary (MNB), the main objective of which is to prevent over-indebtedness of the population. The Good Finance must be examined for any loan over $ 200,000, so it should be taken into account in the credit assessment of a baby loan.

The Good Finance-related change was already known in the October last year amendment, while the details of the baby loan were published in the March 12, 2019 Hungarian Bulletin.

Good Finance calculation for baby loan

Good Finance calculation for baby loan

So it is certain that the income-to-repayment rate will apply to couples in need of a baby loan, but how this will be applied by banks is still unclear, as it is a 5-year floating rate loan without interest subsidy.

Banks will take into account the couple’s existing loans, even though they are only named, when applying for a loan , as they can only apply jointly for a baby loan . Banks should take into account existing:

  • personal loan,

  • car loan

  • mortgage loan

  • CSOK credit,

  • POS,

  • credit card contract,

  • overdraft facility,

as well as any related financial burden. Of course, only certified legal income can be included in net income.

The couple’s net income counts

The couple

According to the decree, the claim can only be filed by married couples, which means that when applying, the bank will examine the income conditions of both parties. The Good Finance calculation must take into account both the verified primary and secondary income of the couple.