A Personal Loan To Finance A Trip, Is It Possible?

According to a study carried out by Cofidis with the CSA institution, nearly 8 out of 10 British people have already used a bank loan or another organization specializing in loans to finance their projects. Also according to this study, 1 in 5 British people would borrow money from a bank or credit organisation at least once a year, for an average amount of £4,800. This shows that borrowing is part of the British people’s habits, even if many view this practice negatively, because the interest rate is considered too high. While credit is in most cases used to finance personal property, as well as the purchase of a car, the number of British people taking out personal or consumer credit is tending to increase. This type of credit is generally used to finance the purchase of household appliances, computers, telephones… But you can also take advantage of it to take a trip! Today, I’m going to shed light on personal credit and the criteria to be taken into account when choosing it.

What is meant by personal loan?

A personal loan is a good way to finance any type of project, except the purchase of real estate. It is therefore particularly suitable for financing a trip.

It is an unassigned consumer loan, which means that you do not need to present an invoice or other proof of use to obtain a personal loan, unlike an assigned loan. It simply meets a household’s liquidity requirement. You are free to decide how much you want to borrow, regardless of the purpose of the loan – you can visit the Palma Violets Loans website to learn more. Most banks and other lending institutions offer personal credit, but the repayment period will range from 3 to 84 months, depending on the amount you borrow and your ability to repay.

Why take out a personal loan to finance your trip? Because the conditions are fixed, and therefore remain stable throughout your contract. You will know in advance the amount you will have to pay each month and the duration of your repayments. Another advantage: the interest rate is much more interesting than that of other credit solutions, to mention only the revolving credit! The cost of the Annual Percentage Rate of Charge (APR) depends on the duration of your repayments, but it does not increase along the way, as it may with other financing solutions.

The faster you repay, the lower your interest rate will be. Personal credit is governed by the Consumer Code. Its minimum amount is £200 and the maximum amount is £75,000, but some loan organisations and banks can apply their own minimum and maximum amounts and repayment periods without however derogating from the Consumer Code.

Why take out a loan to go on a trip?

The world is full of wonderful places just waiting to be discovered. If, like most British people, you dream of travelling to discover the world in all its splendour at least once in your life, or to explore job opportunities, personal credit is the solution to make your wish come true. You don’t have to wait years to save before you can live your dream.

You can obtain financing shortly after you apply for credit without having to provide any proof of your application. Some organizations offer to give you an answer within 24 hours. With personal credit, you have the option of withdrawing within 14 days of signing the contract if you change your mind. Once this period has passed, the funds can be released and all you have to do is pack your bags, provided of course that you have already chosen your destination. The lender has 7 days to give you an answer to your credit application. In general, the first monthly payment is taken the month following the signature of the contract. To get an idea of how much you can borrow and how much you can repay, you can use the personal loan calculation tools on Younited Credit.

Choosing the right personal loan to travel with peace of mind

To enjoy your trip with peace of mind, you’d better choose the right personal loan. While the bank is the best known and most sought-after financing solution, the British are currently turning to other solutions in order to benefit from a lower interest rate. In any case, you will need to compare several offers in order to find the best one. To do this, you can call on a broker, who will be assigned to act as an intermediary between you and the financial institutions. This will ensure that you find the credit that best suits your needs and situation and will make the competition work for you.

On the other hand, you are able to find an advantageous travel credit without having to resort to a third party. All you have to do is do your own research, using the Internet. It is currently possible to apply for a personal loan 100% online and do all the necessary steps without having to leave your home. You can also sign the credit contract at a distance. Convenient isn’t it? You’re probably wondering whether this is really a reliable and secure solution. I’ve also asked myself this question, just like you. Then you should know that there are serious online banks offering personal loans! Not only does this solution save you from having to travel, but it also allows you to take out a personal loan fairly, transparently and as quickly as possible with an innovative system.

Choose an online bank that has a banking license, which will allow you to be sure of the seriousness and reliability of the platform. It also gives you peace of mind regarding the protection of your personal data.

Overdraft Facilities – A Permanent Solution?

Need a little more money in your wallet quickly? No problem – the overdraft facility to your own account makes it possible. Quickly to the ATM, withdraw money and that was it. Fast, simple, uncomplicated. But the offer has its pitfalls…and its price.

 One often has the impression that the only target group without a chance of an overdraft facility is children and young people. But this assessment alone does not necessarily correspond to the facts on the credit market. Because even minors can – with appropriate liability and the consent of their legal guardians – take advantage of a certain credit line as an extra to the bank account. Although this is indeed rather an exception, as most banks will hardly consider this. However, the assumption that low earners have little chance of success with an overdraft facility application is not generally correct. The fact that even people with very low incomes can obtain overdraft facilities is due to the general conditions prevailing in most banks.

How much “overdraft” can I get as an account holder?

The vast majority of all banks operate according to a clear rule: account holders can obtain an overdraft facility at almost all branch and direct banks, although an upper limit is almost always set in advance. Two to three times the monthly net income is regarded as the industry standard, so to speak. However, this rule usually applies mainly to bank customers with a “normal” income. Deviations from this are possible. Up and down.

This applies in particular to these groups:

  • Clients with above average regular cash receipts
  • Persons receiving state benefits as “income
  • Self-employed and freelancers without a fixed monthly income
  • Account holders who have repeatedly overdrawn/overdrawn the overdraft facility

The latter customers should keep one danger in mind above all. What is meant is the unexpected request for a full refund of the balance.

Is there a risk of premature credit repayment?

This question is important on closer inspection for two reasons. Firstly, as a customer you should not constantly make use of the individually defined credit line or even put the account into the red beyond that. The house bank will certainly turn a blind eye a few times. After all, the interest rates for a tolerated overdraft are usually even higher than the standard market overdraft interest rate. And even this can be seen in a negative light. While overdraft interest rates are already at ten percent or more per year anyway, the interest rates for overdrafts usually increase by another few percent. The most expensive offers on the market are around the lower level of a typical credit card interest rate. In addition, the bank will eventually put a stop to this.

The result is the aforementioned reclaims. However, if you constantly use your disposition, you will hardly have the funds to balance your account completely. What then remains is usually only the taking out of another loan. A change in creditworthiness can also lead to corrections!

Can the bank subsequently adjust the overdraft facility?

This is also conceivable. If you use an overdraft facility, you should know These are always financial products for which the bank can make adjustments despite prior approval. On the one hand, it is precisely the all-too-committed use of the credit line that will cause banks to make downgrades. On the other hand, customers also have to ask many banks to set up higher lines of credit on request, especially when there is an acute need. The adjustment risk, however, plays a role above all with regard to the balance interest rate. This is particularly important because many consumers equate overdraft facilities with call loans. However, this is a big mistake that can lead to considerable additional costs. Not to forget: Either way, banks can make changes to the details of lending without giving reasons.

Dispo interest rates – always aware of changing cost risks

In the case of overdraft facilities, banks are guided by the current interest rate level – whereby a few percent premium on the current base rate is usually expected. In the case of overdraft facilities, interest is also only charged for funds drawn down. However, borrowers often receive a certain interest guarantee for an agreed term. In the case of an overdraft facility, the bank reserves the right to lower or raise interest rates at any time. For this very reason, providers usually mention the variable debit interest rate as the basis of overdraft facilities. Incidental costs may be incurred due to insufficient cover.

More overdraft facilities due to higher salary income?

Here the answer is: It depends. Anyone who uses overdraft facilities as a freelancer or self-employed person should not expect the bank to approve an increase in overdraft facilities after one or two better months. However, employees who can prove that they have received a salary increase or other supplementary funds have extremely good cards when it comes to negotiating higher credit lines. Self-employed or freelance bank customers will most likely have to prove that they have significantly better income for several months. You should always ask yourself the question: Is overdraft really the right choice in the long run?

Permanent use of overdraft facilities – the worst of all options

The fact that banks generally offer overdraft facilities as a temporary solution is not only for legal reasons. After all, banks must inform customers of the risks and high costs. Above all, the loans are only intended as a bridging measure. The bank will also inform you of this and will recommend a rescheduling to an installment loan from time to time if the utilization rate remains constant. And this step makes sense in terms of cost containment. Perhaps it is necessary to rethink your own expenses? If you really only need more money in the short term than you have in your account, the dispo is an unbureaucratic option. In the long run, however, any other loan is the better alternative. The only exception is the credit card. As mentioned above, it is even more expensive, regardless of the convenience of using a plastic card for payments and withdrawals. But this is a different matter.

So never forget possible costs when making arrangements, but also bear in mind the banks’ cancellation option. Otherwise, if you are asked to balance your account, good advice is expensive in the truest sense of the word. Even bankruptcies are possible if you do not get a loan for the complete repayment of the account balance.

How To Optimize Your Credit Score Step By Step

You have recently submitted one or more credit applications and have literally stumbled over your creditworthiness? This can happen, but rejected applicants do not always know how the bank came to a negative decision.

Actually, everything looked good, but the desired credit is rejected by the bank. This is it, the bad and completely unexpected surprise of the rejected credit. How can this be? Often one is not aware of any financial misconduct. So what went wrong?

The surprise is due to the fact that many consumers are firmly convinced that open credit debts alone are reason for rejection. Unfortunately, this is not true. Several aspects can have a negative impact on creditworthiness. Therefore, here are a few tips on how you can, with a little luck, bring about positive changes in your score in the register of Agency or other credit agencies. The consumer situation turns out to be difficult when it comes to the question of the value. The Agency has always been reluctant to discuss this issue. Consumer protectors have consistently criticised this lack of transparency for many years.

Worth knowing: → The best possible “basic score” is 100. Anyone who can show it will receive the best offers in credit enquiries. Whereby 100 is in fact an unattainable value, but anything above 90 points is considered highly creditworthy.

The right to information on personal Credit data

To be able to take action, you must of course understand which characteristics are important for Agency. Current loans are in fact only one point of importance for credit agencies when determining creditworthiness. First of all, you should make use of the right to self-disclosure. Consumer protectors complain time and again that many consumers waive this right – often out of sheer ignorance. In fact, a few years ago the legislator made sure, through an amendment to the Data Protection Act, that you can have a data overview of your register entry sent to you once a year free of charge. To claim this right is not only useful in case of acute credit need. You can also find out from the documents whether there may be incorrect or unauthorised entries in the file.

How long do notes remain in the score?

Even if consumers rely on the accuracy of their data: Sometimes errors or obsolete entries occur because deadlines for deletions are not met. This must not happen, but it does happen. Therefore, leaving blind trust is negligent, become active and check entries annually. Normally, entries on credit charges may remain in place for 36 months after full repayment. Entries in debtor registers at local courts and other public data are stored equally for three years. In the digital age, removal from databases is now automatic.

If newly completed mobile phone or internet applications are reason for registration, entries must be removed after 12 months at the latest. With the mobile phone tariff, data is archived for one year, but for the score, the information is only added for ten days. The 12-month period also applies to account openings.

No rule without exceptions – also for the Credit score

In general, Agency scores are recalculated after three months. During the year your credit rating may therefore change significantly. On these dates old data will be deleted and new data added. So much for the theory of entries. As always, there are some special rules. You are closing an account? You have settled open claims up to 1,000 GBP? In both cases you are entitled to immediate entry deletion. In the context of a so-called private insolvency, entries remain in force 36 months after the end of the six-year proceedings. This results in a total duration of nine years. The beginning of the period is the filing of the private insolvency.

These options for score optimization are available

Let us now turn to the opportunities for improving your individual rating by the credit agency from Wiesbaden. Or their “competitors”, who mostly work quite similarly. Here you will find our top 7 tips for improving your score.

1.  Refrain from changing banks and accounts too frequently

With regular special offers and switching bonuses in the banking sector, it is tempting to keep switching bank accounts and reducing spending. However, it is advisable to change accounts as rarely as possible and to apply for new bank accounts. In comparison under otherwise identical conditions, it is noticeable that scoring values of long-standing loyal bank customers are better than those of customers who constantly change accounts. In addition, it is not recommended to use too many bank accounts in parallel. This can also have negative effects.

2.  It is best to use only one credit card!

Just like loans, credit cards are an obstacle on the way to an optimal Credit score. If you absolutely need a credit card, you should leave it with a single one. Each additional card has an additional negative effect on your rating. Not to mention card usage fees. Replace expensive cards with a cheaper one rather than applying for a second card.

3.  Always pay bills on time

Exemplary payment behaviour is the be-all and end-all for a good to very good Agency score. This means in plain language: Whoever buys something in instalments or regularly receives invoices should always transfer amounts punctually or have them debited by direct debit. Direct debiting is the safest way. The prerequisite is, of course, that there are sufficient funds in the account to cover the debits. If this is not the case, this not only causes reminder and chargeback fees. At the latest if you do not comply with a payment request of your electricity supplier, landlord or other contractual partner for the second time, a negative Agency entry will be the result.

4.  Pay credit instalments always on time – also think of the disposition!

Direct debit is also the most reliable approach to avoid missed payments. For your own safety, do not set monthly instalments too high. If the repayment phase runs smoothly and as agreed, the basic score will rise very gradually. After a successful loan agreement, your score will first drop noticeably. Attention: You should also make use of the disposition in between and not continuously use it to full capacity. If you never pay anything back, the bank may cancel the overdraft facility. This in turn leaves a negative mark on your Agency score.

5. Do not make unnecessary and too many loan inquiries

For some consumers, it is tempting to make credit enquiries from time to time – so to speak, in order to sound out their own opportunities. But it is not useful if you do not actually need a loan. This is because banks usually make an Agency inquiry, which sooner or later has an influence on the scoring value. The higher the number of your inquiries, the more significant the impact on your basic score. Even non-binding enquiries to brokerage portals and platforms for the granting of loans “from private to private” can make themselves felt in your data overview. Exceptions can be so-called-neutral offers, which are advertised on the market in a few cases.

6. Reschedule several loans quickly

You pay instalments for several (small) loans? Perhaps you are using zero percent financing from online shops or retail chains. With regard to the Agency database, a single loan is always better than several monthly instalments for different loans. Especially since you can also save cash money by rescheduling debts.

7. Do you absolutely have to move?

Many people do not even know that the place of residence as well as the frequency of the change of residence can also have an effect on the Credit scoring. Time and again, the media criticise that credit agencies allegedly include the notes of people in the immediate vicinity and their scores in their calculations. Of course you have no influence on this. What you can influence, however, is the number of moves you make. The longer you live in one place, the better it is for your basic score. Agency appreciates “reliability” in this respect. Of course, changes of residence for professional reasons are not generally avoidable.

Our conclusion for the optimization of the Credit-Scorings

They must know that the measures presented do not allow for acute improvements. After three months, however, you can probably already see a first positive change. It is no less important to have incorrect entries deleted. If you are concerned about the correctness of your score, do not hesitate to contact Agency. And in any case use the right to the mentioned annual self-disclosure.

Loan: How To Find The Right Amount Of The Loan Installment

Thanks to the Internet and digital application processing, it is often only a matter of hours to take out a loan. But if you make decisions too quickly, especially regarding the term of the loan and the resulting monthly installment, you could find yourself in financial difficulties.

If your own financial liquidity is limited and does not permit necessary purchases and/or repairs, taking out a suitable loan is often the only solution. The number of credit offers is large, and by using a credit comparison, it is often possible to “find” the right credit quite quickly. All too often, attention is focused on the classic characteristics of a low interest rate and a low monthly rate. Especially the low monthly rate for the desired loan is often the decisive element when choosing a loan.

Low loan rate sounds tempting, but can be expensive

But this is exactly where a certain danger lies, because it is often much cheaper to choose a higher loan rate, even if this is more of a burden on your own budget.

The higher the loan rate, the cheaper the loan.

But why can a higher credit rate save a lot of money? And how can a certain financial flexibility be guaranteed? In addition, the question then also arises, which amount of a loan instalment is then actually individually suitable?

Low loan rate = long term = high interest payments

The amount of the installment for repayment of the loan always depends on the term. And the longer the term, the more interest must be paid. Even with a low interest rate, a considerable amount of interest payments alone is incurred over the long term.

Which in the reverse conclusion means that the shorter the term is chosen, the smaller the sum that has to be paid for interest payments alone. The price for this is that although the monthly installment to be paid for the repayment of the loan increases with a shorter term, the loan as a whole becomes more expensive. How much can be saved with a short term, therefore, depends mainly on the amount of the loan and the interest rate.

Important: How much credit rate can I realistically afford?

Basically, before taking out a loan, the question should be asked how much credit is actually needed and can be repaid. In order to find out how much a monthly loan installment can actually be paid, while maintaining the necessary financial flexibility, it is advisable to use the classic budget calculation. Which means nothing else, that all regular expenses of a month are compared to the monthly income. The deduction of all expenditures from the income is the sum of the monthly disposable income. Within this free amount, the maximum payable monthly loan instalment can then be determined.

In addition, a credit calculator should be used with which various scenarios can be simulated with regard to different interest rates, maturities and the resulting credit rates.

The consequences of choosing too high monthly credit instalments

However, the use of generally too high credit rates should also be avoided. Because too high credit rates almost always mean a maximum restriction. And this restriction usually means the loss of any financial (residual) flexibility: If, for example, another problem arises during the term of the loan (new car, unexpected workshop bill, high additional payments for ancillary costs, etc.), it is once again not possible to resort to one’s own financial resources to solve the situation.

How much financial leeway, even if it is already burdened with a loan instalment, should be chosen with care. In this respect, after calculating a maximum affordable loan instalment, this amount may have to be reduced slightly.