Student loans: From university to debt

Studying on Pump is Coming into Fashion: Thanks to state subsidies such as the student loan from the state-owned Intrasavings (Reconstruction Loan Corporation), it has long since become the norm for many students, a substantial portion of their livelihood during higher education through a loan finance.

Student loan

Student loan

For students with a less financially strong background and no Credit Aid entitlement, a loan is often the only way to actually prove the desired degree course. Others, in turn, avoid having to work diligently alongside the lectures and exams. Therefore, the loans are helpful in any case.

What many do not realize when deciding on a student loan is that the repayment plus interest can be a significant financial burden. The Reconstruction Loan Corporation will provide each student with a monthly disbursement of 650 euros for a period of five years without any major restrictions. Who completely exhausted this framework, sitting at the end of his studies on a debt mountain of no less than 39,000 euros.

The salary prospects in today’s labor market are by no means so rosy that liabilities at such a high level can be quickly repaid. Here, students often overstate their financial scope in working life. For one thing, many people are not sure how much they will ultimately earn, because they simply do not have any tax and duty experience, and the cost of living for a non-student life is high. Quick is then overestimated, what remains at a gross annual income of 40,000 euros in a South German city of free space left, if all taxes and costs are paid.

Pay for the loan

Pay for the loan

The fact that Intrasavings allows borrowers to post repayments after their studies for up to 18 years does not make things much better: anyone who leaves university at the age of 27 and takes advantage of this offer still has to pay for the loan if A very different period of life has long begun. If, in addition to a student loan, Credit Aid also has to be repaid (half of the fee is not granted as a subsidy, but as a loan), this further aggravates the situation.

Nevertheless, if it can not be otherwise, a carefully planned loan can provide access to the desired degree program for all. Intrasavings’s loan can be requested from banks. Required is a certificate of enrollment and, if applicable, a certificate of performance.

Learn to save with your bank | Request up to € 750 in 15 minutes

If you have started reading this article almost certainly it is because you are tired of your bank charging you maintenance fees, expenses for making a transfer or a commission even for having money in the same network of your card issuer.

Surely since Christmas you have put the batteries and you have decided that you must activate the ZERO MODE COMMISSIONS, whatever the reason, we encourage you to continue reading, the decision you have made is the right one.

The decision to save with your bank is the right one

The decision to save with your bank is the right one

In this article we will summarize four services in which, either your bank charges you more, or it does not help you to have a healthy finances, but rather the opposite. In both cases the result is the same: you spend money that you could save.

Zero commissions

With the competition so great that there is today in the banking sector, if you pay certain commissions it is because you want to. Almost all banks have a “Zero commissions” account or by performing a series of steps such as direct payroll and a series of receipts, those commissions are taken away. Go to your entity and look for a really suitable option for you that saves you those annoying semiannual or bi-monthly commissions.

If he refuses, if you have nothing to tie you to that bank, run away from him as fast as you can and find another one with zero commissions. There are many who will be glad to open an account.

Do not use the credit card

cash

They are an easy-to-access financing tool for everyone, but if using them to finance you involves quite significant risks: you spend extra money, pay a lot of interest, encourage you to consume irresponsibly.

Don’t have the money stopped

If you don’t invest your savings, inflation will make them worth less every year and make your purchasing power less.

Money can never stand still. If you have some savings you should invest them in a financial product that offers you a decent return. The bag is a good place to get it, but don’t even think about investing for yourself if you don’t have the right training.
Soon we will recommend several App to do it without risking your savings and with total availability if you need it urgently.

Do not hire your investment funds

Do not hire your investment funds

In relation to what we mentioned in the previous point, if your bank realizes that you have good unemployed savings, it will try to convince you to invest in an investment fund or in a pension or savings plan. Our advice is not to hire them.

If after making the most of your money, you still have an unforeseen event. We encourage you to try us, for that you have a First loan of 200 euros to return 210 euros in 30 days, come to Good Finance and Try!

Pros and cons reverse mortgage

More and more banks are offering owners of retired properties the opportunity to supplement their pensions with a so-called reverse mortgage. The principle is simple: An unencumbered property is mortgaged in the form of a one-time payment or a lifelong monthly pension. The owner and possibly his partner receive a lifelong registered right of residence. After the death of the last owner of the right of ownership, the property then becomes the property of the bank.

Loan contract

Loan contract

The amount of the pension or one-off payment may vary depending on the value of the property and the age of the owner. The younger this is at the conclusion of the loan contract, the lower the maximum exposure limit. When measuring life expectancy, the mortality tables are used, which are also used in life insurance.

The advantage of the reverse mortgage is obvious: more and more pensioners do not have an adequate income in old age despite a completely paid-up real estate, because the benefits of the statutory pension insurance are in many cases too low , With the reverse mortgage, the pension can be improved quickly, without the sale of the beloved home is necessary.

Banks, of course, can earn a lot in the business.

Banks, of course, can earn a lot in the business.

The market for reverse mortgages in Germany is still in its infancy and there is virtually no transparency. Experts therefore recommend comparing the offers of as many banks as possible before signing under a loan agreement. Since most money houses do not actively advertise reverse mortgages and make offers only on request, this takes a certain amount of time.

The model is particularly attractive for owners who have no direct descendants (heirs). The own assets tied up in the property can be fully consumed during their lifetime. If children are present, this can change and the mortgaging of the property can become an irritant. However, if the offspring have sufficient income, it is conceivable to find a family-internal solution: the spit-pings pay their parents a certain amount each month and inherit the unpaid real estate.

If a property encumbered by reverse mortgages falls into the possession of the bank after the death of the owner, the offspring is free to take over the mortgage and the house.

Payment in installments for everything: with small financing in the debt trap

The days when the federal citizens took out a loan only for their own four walls are long gone. Today, vehicles, fitted kitchens or holiday trips are simply financed with installment loans, if the credit balance on the account is insufficient. Against the “Consumption on Pump” is on and for nothing to object, it allows you to make important purchases or long-awaited wishes regardless of the account balance.

Buy everything on the pump

 

Those who overbid it with loans, however, quickly get into the debt trap. Because it is by no means recommended to buy everything on the pump, which can be bought on a pump. Consumers who finance everyday items of maximum mediocre value are quick to take over.

Mobile phones are a good example of the increasing carelessness of many consumers. It is now possible to install a new device worth 500 euros without a deposit over a period of two years in installments. The situation is similar with notebooks, washing machines or refrigerators. In addition to installment buying, consumers now also have access to a leasing market for basic consumer goods. Although the conditions of these financing models are by no means favorable the annual percentage rate of interest exceeds the mark of 20 percent with good regularity – but they are nevertheless being used extensively.

Installment payment

 

One of the reasons for the development is certainly that a growing number of German households have neither reserves to pay for purchases between 500 and 1000 euros, nor is it prepared to save this amount, At a Astro finance mail-order company, which was frequently seen in the media recently, towels, plastic cutlery or light bulbs can be paid in installments, if so desired.

A mobile phone financing to 20 euro monthly installment here, a installment payment at the mail-order company to 30 euros there and in addition a Astro leasing contract to 25 euro – households on a tight budget, to which such financings are addressed, quickly come in need, So convenient and beneficial loans are also not all that is affordable with them, is also funded with them.

Real Estate Financing: Plan Exit Strategy!

Anyone who acquires a home and takes out a loan from the bank, should include in his planning far more factors than just interest rate, monthly installment and term. Especially today’s uncertain time requires a lot of flexibility, because working conditions and partnerships change faster. Therefore, if you move into a credit-financed property, you must be able to get out again.

If a mortgage is to be repaid prematurely, the borrower often encounters difficulties that he has never planned. This applies in particular if the property is not sold and no collateral agreements have been made with the bank in the event of early repayment. Banks often refuse early repayment even if a rebate is offered by the borrower.

Credit institutions

Credit institutions

 

Credit institutions are in principle not interested in terminating a loan agreement early. Unless an early repayment without compensation is required, great negotiating skills are required. The repayment of the loan is usually made with assets such as life insurance or time deposit accounts. If financing and assets are held by a bank, the borrower can easily calculate the smallest claim of the bank: the compensation for the early termination of the loan is based on the classic indemnity f Dasr the loan and the margin of the bank from the investment products together. Therefore, the early repayment often becomes much more expensive, as owners suspect.

Taking out mortgage financing

Taking out mortgage financing

 

Therefore, when taking out mortgage financing, it is essential to include an exit strategy that makes it possible to exit financing before the end of the term. The possibility of regular smaller special payments is not enough. It must be explicitly agreed with the bank that a full repayment is possible at any time even if the loan has a fixed interest rate. The annual percentage rate of such agreements is higher – that is the price for the flexibility. The amount of the interest surcharge is based on the precautionary compensation agreed in the case of early termination. Transparency is important here: the compensation should be determined by looking at the interest rates of fixed income securities at the time of cancellation and simple discounting.

The interest premium can quickly pay off. Only those who are able to get out of a financing quickly and without much back and forth with the bank can also react appropriately to changes in their financial or personal circumstances.