Monthly Archive: January 2020

Is pooling loans synonymous with bank filing?

If you are considering using Loan consolidation to rebalance your finances, you may be wondering what the consequences are to be expected from this transaction. Besides the fact that it will simplify budget management, and spread the reimbursement over a new period, should we expect a consequence on your relationship with your creditors, with your bank, or with the administration? More specifically, does a Loan buy-out even on the bank card?

The redemption of Loans is not a reason for registration in the FILP file

The redemption of credits is not a reason for registration in the FICP file

The FILP file, managed by the Good Finance, groups together borrowers who have had Loan repayment incidents. To be very precise, Good Finance actually has several files. The FILP file is the Loan Repayment Incident File, but others are also known as the Central Check File (FCC) for grouping incidents related to means of payment. Depending on the default and its nature, a filing period will be determined (ranging from two years to eight years).

Several cases can lead to filing:

  • If you have not honored several deadlines consecutively, or if you keep an unpaid deadline with a long delay (more than 60 days);
  • If you do not regularize an overdraft situation greater than $ 500, after a period of more than two months of formal notice;
  • Finally, if you do not react after a formal demand for full repayment of the remaining capital of a loan (whether it is a mortgage or a consumer loan).

Is carrying out a loan buy-back a reason for recording in large bank incident files? No.

A regrouping operation is, on the contrary, a solution to better balance your finances and find an answer before switching to over-indebtedness. It is an act that shows your will to get out of a difficult financial situation, or the desire to restore more balance to your finances. No filing to wait in return.

Buying back Loan is an answer for fragile budgets

Buying back credit is an answer for fragile budgets

Combining Loan repurchase and filing with Good Finance is awkward. In fact, carrying out a restructuring is not a punishable action or one which requires special monitoring by the tax administration. It’s quite the opposite.

  • Households who are experiencing lasting financial difficulties and who want to avoid repetitive payment incidents that would lead to their filing with the Good Finance can use redemption as an answer. They anticipate and react. Communication is the keyword, don’t be alone with your problems;
  • People who are looking for a solution to simplify their budget, and who want better readability of their lines of Loan can combine loans if they wish, without being “filed”. They are free ;
  • Finally, in order to face an unforeseen event, or to better anticipate the future, the grouping allows a new spreading of the repayment of loans (consumer and real estate), and this in complete freedom and independence. Everyone can adjust the repayment of their loans as they see fit, given their situation.

The repurchase of Loans is a solution subscribed with financial organizations or via an Intermediary in Banking Operation and Payment Services, without direct link with the tax administration. It does not have to know your project, which is carried out in a completely confidential manner, with the listening of an adviser.

On the contrary, if you are registered with the FILP, and you ask to benefit from a Loan buy-back, your financial situation will have no secrets for the financial organizations. Your debt is known, thus limiting your borrowing capacity, and therefore the possibilities of benefiting from this consolidation. It is essential to use the redemption before falling into the spiral of over-indebtedness, which can lead to registration in the Good Finance files. Because once this filing is done, your room for maneuver will be much reduced.

Credit agreements: almost 40% of adults have one or more in progress

The study conducted by Mister Credit, the CRIF area that deals with the development of educational solutions and tools for consumers, shows that almost 4 out of 10 Italians, more precisely 39.4% of the total of the adult population residing in Italy, at least one active installment credit agreement is in progress (+ 8.0% compared to a year ago) while installments are repaid monthly for an amount equal to 344 dollar (-1.5%).

The average residual debt is equal to 33,084 dollars (down -1.8% compared to the corresponding 2018 survey). Mortgage contracts weigh heavily on the Italian portfolio.

Most common forms of financing

bank

Consumer loans rank first among the most common forms of financing, with a percentage of total loans equal to 45.5%. Second position for personal loans which account for 32.8%. Finally, third position for real estate mortgages (21.7%).

Regional distribution of credit agreements

Tuscany is the region with the highest share of the adult population with at least one active credit ratio, which turned out to be Tuscany (44.2%). Followed by Sardinia (with 43.2%), Friuli-Venezia Giulia (with 42.9%), Lazio (with 42.3%) and Valle d’Aosta (with 41.8% of the population). Last position for Trentino Alto Adige, a region in which only 20.2% of the population has at least one active credit agreement, penultimate position for Basilicata (with 32.1%, third-last for Molise (with 33, 8%).

The distribution of mortgages by region

The distribution of mortgages by region

As regards mortgages, the highest incidence was found to be that of Friuli Venezia Giulia, with 30.8% of the total, followed by Emilia Romagna (with 26.2%) and Lombardy (with 25, 9%). Calabria, Sardinia and Campania are in the last positions, respectively with 13.6%, 15.4% and 15.8% of the total.

Regional distribution of personal loan contracts

With regard to the technical form of personal loans, however, the highest incidence is found in Molise, with 37.2%, ahead of Basilicata, with 36.6%, while Tuscany and Lombardy close the national ranking with 29.9% and 30.3%.

Regional distribution of targeted loans

Finally, as regards consumer loans, Calabrian and Campania citizens are the ones with the highest incidence, respectively with 53.5% and 49.9% of the total.

The average amount of installments repaid each month

The average amount of installments repaid each month

The highest monthly average installment is paid in Trentino-Alto Adige, with 430 dollars, followed by Veneto (with 390 dollars) and Lombardy (with 387 dollars). Fourth place for Emilia-Romagna and Tuscany, respectively with 370 and 364 dollars.

These data must be interpreted taking into account the fact that the incidence of mortgages is high as well as greater income availability cannot be ignored.

In contrast, in the South and in the Islands we find the lightest monthly average installments, especially in Sardinia (285 dollars), in Calabria (290 dollars) and in Sicily (301 dollars). In these regions, the greatest impact is due to targeted loans which generally have lower installments.

Regional ranking of the remaining amounts of the contracts

Also as regards the residual amount of the debt, we find Trentino-Alto Adige at the top of the national ranking, with 43,289 dollar per capita still to be paid off. Lombardy follows in second place, with 41,189 dollars, while the residual exposure of Emilia Romagna and Veneto is around 38,000 dollars.

The lowest residual exposure is that of Calabria, with only 21,848 dollars. Together with Sicily and Molise, they are the only regions where the value still to be reimbursed is less than 25,000 dollars.

When does debt rescheduling make sense and what does it cost?

A debt rescheduling can make sense if the monthly financial burden is to be reduced. If there are already payment problems, rescheduling can be useful to lower the monthly installments. Debt restructuring should only be considered if the bottom line is savings. It is not just the financial relief that comes from debt restructuring. The currently low interest rate also makes debt restructuring particularly attractive. However, there are a few points to consider when rescheduling. Above all, the question should be answered, what does a debt rescheduling cost and what happens to the old loans.

 

When may debt restructuring be necessary?

debt restructuring be necessary?

With the rescheduling of existing loans, the borrower should receive a significant financial relief. Even loans that were taken out at the time of the high interest rate phase can be redeemed with a current debt rescheduling. In principle, debt restructuring is a new loan agreement with better terms and summarized in one loan. Therefore, the question should be answered, what does debt restructuring cost? To do this, it is necessary that such costs

  • Interest,
  • applicable fees and
  • a possible residual debt insurance

should be respected. If you find a cheap loan with a credit comparison, you can get a significantly reduced credit rate with an extended term.

 

What does debt restructuring cost and what should you watch out for?

ebt restructuring cost

As mentioned at the beginning, rescheduling only makes sense if it results in savings compared to the old loans. This definitely means that there are a few things to consider.

So it should be determined in advance whether a prepayment penalty is due when old loans are repaid.

Due to the early repayment of a loan, the banks suffer an interest loss, which they compensate with a prepayment penalty. The borrower should look at the loan agreement to see if such compensation needs to be paid. Typically, 1% of the credit balance has to be paid. But there will be other costs, for example

  • Processing fees and
  • registration costs

A debt rescheduling can amount to around 3% of the loan amount.

These costs can make a debt rescheduling loan so expensive that debt rescheduling no longer makes sense. That is why experts advise that borrowers should make a loan comparison. A loan comparison can then be used to easily compare different loan offers.

Borrowers should pay particular attention to the effective annual interest rate, special repayments and installment breaks.

 

Pay attention to notice periods for the loans

debt loans

If a loan is taken out, borrowers conclude a contract with the lender. Not only the loan amount is determined, but also the interest rate and term. You can always cancel a loan contract. However, the notice periods should be observed. To recognize these deadlines, borrowers should also take a look at the loan agreement here. Notice periods are usually three months. However, once a loan has been taken out, it cannot be redeemed early. Then borrowers should question whether debt restructuring makes sense. The legislator sets a period of six months here.

 

What should you watch out for when rescheduling a loan?

debt loan?

When considering debt restructuring, borrowers should first get an overview of their finances. An expenditure / income check will immediately show how high the monthly financial burden may be so that it fits into the monthly budget. Once the amount has been determined, borrowers can use a loan comparison to find a cheap lender. However, a credit request should not be made directly, but rather a condition request first. If for any reason the loan is rejected, this rejection does not appear in the borrower’s credit record. By the way, borrowers should only cancel the loan when a new lender is found.

 

Can debt restructuring be rejected?

debt restructuring be rejected?

The borrower should assume that debt restructuring is not always successful. A rejection of a debt rescheduling does not seem understandable to the borrower. Borrowers should then consider that the debt restructuring will be accompanied by a new credit check. Nevertheless, borrowers should insist on knowing the reason. For example, insufficient income can cause the loan to be refused. The income should ideally be above the garnishment exemption limit. However, debt restructuring can also be refused in the case of a temporary employment contract. To be sure, borrowers should request a free self-assessment from credit record once a year.

 

How can creditworthiness be improved to repay your loans?

loan payment

If you have a poor credit rating, you can improve it with so-called collateral loan. This can be a solvent guarantor or a second loan applicant. Such a person can come from family or friends. A real estate or condominium can also be viewed as collateral. If you have a loanable life insurance with a corresponding surrender value, you can also offer this insurance as security.