“Limits of debt” or how many loans you can have

Each bank will check our creditworthiness before granting us any loan – in order to calculate whether we are able to pay the debt in a timely manner. Excessively indebted persons may, therefore, be deprived of the possibility of obtaining another loan if their monthly installments exceed a certain amount.

How to check how much debt we can have?

How to check how much debt we can have?

Each of us has situations that are difficult to predict, requiring considerable financial outlays. Unfortunately, not everyone has savings allocated to these unplanned expenses.

Therefore, in crisis situations for our portfolio, we often turn to the bank for help. The only question is, doesn’t it happen too often? How to check if the debt limit has not been exceeded yet?

Credit can make our lives easier, but only if it is taken out with our heads. To protect their interests, as well as to protect clients interested in another loan from excessive debt, they carry out a credit procedure aimed at examining the creditworthiness or the possibility of paying off the debt. If the customer exceeds the specified limit of monthly payments for the debts incurred – he cannot count on the next bank loan.

How does the bank verify our credit standing?

How does the bank verify our credit standing?

How does he know that each month we have enough money to pay for the next installment? In Poland, no regulations regulate how much maximum loans and borrowings you can have at one time.

Well, banks are guided by the so-called DTI (the abbreviation comes from English: debt to income – which means: debt to income). It is a measure that allows us to determine what part of our income we spend on paying off bank liabilities. It is calculated as follows:

e.g. (a + b + c) / d = DTI

a – means the monthly amount of cash loan is repaid (e.g. USD 350)

b – means the monthly amount of the mortgage loan to be repaid (e.g. USD 1,400)

c – means the monthly amount of cash loan is repaid (e.g. USD 400)

d – means the monthly amount of remuneration (income)

DTI – an indicator that allows you to determine how much of your income is spent on paying off your debt

i.e. (USD 350 + USD 1,400 + USD 400) / USD 4,200 = 51% of the sum of all monthly installments

In Poland, banks assume that the DTI should not exceed 50% or 65% for borrowers with an income exceeding the national average (currently around USD 3,000 net)

Such a conversion does not guarantee

money

That we will be able to pay all installments and other obligations on time. We should calculate whether we can deal with the debt. No bank will calculate the actual maximum amount that we are able to pay back. He uses only the old methods of calculating creditworthiness, which after all does not work 100%.

If the bank refuses to grant us another loan, loan or credit card, let it signal to us that our debt has reached a dangerous limit. This means that it is time to change various financial habits and habits, and wisely manage the funds earned, thus reducing unnecessary expenses.

Loan for those in debt without creditworthiness

Lack of creditworthiness affects many people, but not only. More and more people are struggling with debt. However, it is worth knowing that even those in debt have a chance to get a loan. There is finally something like a loan for those in debt without creditworthiness. What is? Where to look for him and who can use such a product? You will learn this from the text below!

Loan for those in debt without creditworthiness – what is that?

Loan for those in debt without creditworthiness - what is that?

A unique product is hidden under the name of a loan for those in debt without creditworthiness. It has a small amount of requirements and is therefore easily accessible. It is generally accepted that anyone who is at least 18 or 21 years old can apply for a loan for those in debt without creditworthiness – the exact conditions determining the borrower’s age are set individually by individual financial institutions, so this should be checked before you contact us.

It is a long-term commitment, which installments can be spread over several or even several months. The amount of financial support provided varies – it can range from several hundred dollars to even several thousand. This means that anyone can apply for a sum that will solve financial problems.

Loan for those in debt without creditworthiness – where to look for these types of products?

Loan for those in debt without creditworthiness - where to look for these types of products?

Well, where can we count on a loan for those in debt without creditworthiness ? In crisis situations, we usually direct our steps to the bank. Can we really count on help here? Banks have quite a wide credit offer, but do they give liabilities to someone who has no creditworthiness? Yes and no. What does it mean?

If we have something valuable that we can give as collateral, then we can count on support even without creditworthiness. Most often, loans are granted against real estate and a car. In a situation where we do not want to surrender anything, we must be aware that the bank may send us back. The reason is very simple – the bank expects creditworthiness from its clients without it, we are not reliable clients, which is unambiguous, but the institution has doubts as to whether we will be able to repay the commitment.

Therefore, in order to save yourself time and nerves, it is better to immediately assess your situation realistically and focus on institutions that can support us. A loan company, also known as a parabank or private financial institution, appears to be such an institution. The loan company is not as demanding on its clients, it does not expect good creditworthiness and very often it does not check its clients in terms of employment, income or credit history. This means that even indebted persons who appear in the registers of debtors can count on financial support.

to save yourself time and nerves, it’s better to immediately assess your situation realistically and focus on institutions that can support us. A loan company, also known as a parabank or private financial institution, appears to be such an institution.

The loan company is not as demanding on its clients, it does not expect good creditworthiness and very often it does not check its clients in terms of employment, income or credit history. This means that even indebted persons who appear in the registers of debtors can count on financial support.

Loan for those in debt without creditworthiness – formalities

Loan for those in debt without creditworthiness - formalities

A loan for those in debt without creditworthiness is characterized by a small amount of formalities. The only document required here is an identity card, but it is worth pointing out here that it must be valid. You can also meet with the fact that the lender expects additional documents, including, for example, income statement or employment certificate. However, remember that this is very rare.

The basis for granting the loan is filling out the loan application. We can do it personally in a selected branch of a loan company, but not only. Increasingly, loan companies provide the opportunity to apply for their financial products via the Internet. Thanks to this, we can complete the loan application at a time and place convenient for us.

A loan application for those in debt without creditworthiness is available twenty-four hours a day, seven days a week. Thus, we are dealing with a product that is always available to us, and especially when we urgently need cash or simply financial assistance.

Loan for those in debt without creditworthiness – for whom?

Loan for those in debt without creditworthiness - for whom?

Who is the loan for those in debt without creditworthiness ? Who can benefit from this type of commitment? As the name suggests, we are dealing with a loan dedicated to indebted persons who have no additional creditworthiness. Therefore, people who have found themselves in a difficult financial situation should think about making this commitment.

There were sudden expenses and you don’t have any money to buy? The bank has refused to grant you a loan and you cannot afford to pay your outstanding obligations? Or maybe the bailiff will take your salary and you don’t want to let it happen? Any of these reasons is good to think about a loan for those in debt without creditworthiness.

Since such a product has been introduced to the market, it means that anyone in need can use it, regardless of age or gender. A loan for those in debt without creditworthiness can help students pay for the university, adults to pay for obligations or current expenses, and for seniors to pay for necessary medicines or stay in a sanatorium.

Consumer credit: towards more supervision

The final part of the consumer credit reform came into effect yesterday, May 1. In the line of sight of Lite lender: revolving credit. Update on the main measures of this reform.

Loyalty cards reviewed

Loyalty cards reviewed

“From May 1, loyalty cards of stores with revolving credits must obligatorily provide for a cash payment function” , explains Lite lender. In this way, cash payment will be activated as a priority , which will prevent consumers from contracting credit despite themselves. Indeed, until now some loyalty cards have automatically activated a credit, unless the consumer expressly requests not to obtain one. From now on, it will be impossible to take out consumer credit without having applied for it.

Develop classic credit

Develop classic credit

From now on, “for any request for financing in store or on the internet for an amount of more than 1000 USD, consumers will be offered the choice between conventional credit and revolving credit”. This should prevent certain individuals from being caught off guard.

Accelerate the repayment of revolving loans

Accelerate the repayment of revolving loans

Since May 1, revolving credits of less than 3,000 USD will have to be reimbursed in less than 3 years and those of more than 3,000 USD in less than 5 years. The government hopes to reduce the cost of consumer credit. “This reform is a major change from the current repayment terms offered by lenders,” said the minister. According to a study by the consulting firm Athling Management, for a borrowed capital of 3000 USD, 8 lenders out of 16 offered repayment in more than 5 years, with a maximum of 14 years and 10 months.

In addition, if previously a consumer could multiply the drawdowns on his revolving credit without its monthly payment increasing, this practice is no longer authorized. Indeed, the multiplication of credits increased their duration and therefore the total cost. Today, the repayment period will apply even in this case, so it is the monthly payments that will increase and no longer the duration.

Credit Checks on Borrowers

Credit Checks on Borrowers

The Lite lender sets new obligations and responsibilities for lenders. Thus, since May 1, they are obliged before offering consumer credit to check the creditworthiness of the borrower and to consult the FICP file which lists incidents of repayment on credits. In addition, “at the point of sale, the person who distributes a credit has the obligation to complete with the consumer-borrower a form which takes stock of his income and his level of debt. For loans over 3,000 USD, this information must be confirmed by supporting documents (identity, domicile, income), ” adds Lite lender.

Strengthening consumer protection

“Before the reform, consumer loans of more than 21,500 USD were not covered by the consumer protection rules of the consumer code , ” said the minister. But from May 1, this ceiling is raised to 75,000 USD. Ditto for the withdrawal period which went from 7 to 14 days.