MARKET Restructuring, mortgage or loan? Obliged choice up to 30 thousand euros

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Tax deductions continue to support restructuring, and more and more Italians require loans in order to be able to tackle the initial expenditure. An often forced choice, given that banks do not grant mortgages under, at best, 30 thousand euro. Let’s see then what are the opportunities to be exploited, the costs to be faced and the things to pay more attention to.

The fiscal advantage pushes the market
In all of 2018, 50% of the costs of the interventions can be deducted, even 65% in the case of ecobonus. According to Real Estate Scenarios, in 2017, 700 thousand homes were renovated and 23.2% of the acquisitions concerned buildings that were then polished. The same movement is observed looking at credit requests: 34% of loans are allocated to housing. More specifically, 24% for a renovation, 7% for furniture and 3% for the purchase (data Facile.it ).

The benefits of restructuring
Many Italians therefore invest to improve their homes. Firstly, it is a choice dictated by necessity reasons, given that the overwhelming majority of Italian real estate assets are obsolete (36.6% of homes are over 40 years of age and consume, from an energy point of view, six times more than a class B).

But the goal of improving the profitability of the building is also very important. A renovation or new appliances generally increase the living comfort, the efficiency and therefore the savings in the bill. Putting in the field the most widespread works (change of boiler, fixtures, roof or thermal coat) can be reduced by 20-40% per year the consumption required for the winter heat and for the cool summer (estimate Enea). On the market, a “refurbished” house acquires an added value higher than the costs incurred for the works, especially in the main capitals according to a development of real estate scenarios: + 10.4% in Rome, + 9.8% in Naples, + 9.4% in Florence, + 9% in Milan, + 8.1% in Bologna.

«And if we talk about income-generating houses, a major restructuring can increase the potential rent up to a maximum of 50% in the most dynamic cities, such as in Verona», points out Giuseppe Romano, director of the company’s study center Consultique consultancy and member of the Nafop board (Association of independent financial consultants).

Costs: loans and loans compared
Therefore, the reasons for proceeding are not lacking. But how much is it? And what is the right tool? Today, the average amount of the most common interventions, based on requests for funding from the Facile.it and Prestiti.it portals, is fixed at 15,904 euros. But the development of real estate scenarios estimated a total expenditure of 46.5 billion in 2017, which divided by about 700 thousand interventions returns an amount exceeding 64 thousand euro. We must also take into account that often when buying a house a part of the mortgage is used for the purchase and another for renovations.

Looking at the cost, then the monthly payment to be paid, between loan and mortgage there is no comparison, to the full advantage of the latter. Mortgage financing involves expert expenses and a notary deed, but the final outlay will always be lower thanks to the market rates that allow you to get money at a 2% Taeg, against 7-8% of the loans (the Taeg is the reference value to be considered, ie the “global annual percentage rate”). What’s more, the interest payable on the loan can be deducted to Irpef up to 19% (if we talk about the first house), while this discount is not granted loans. The problem is to find a compromise between the needs of the client and the proposal of the supplying banks. First, mortgages are not granted for low amounts.

The main institutions, such as Intesa Sanpaolo, offer them starting from € 30 thousand , but some direct banks (such as CheBanca or WeBank) propose the mutual restructuring of € 50 thousand. And this mortgage loan does not cover the entire amount of the work, but is generally subjected to some “stakes”, such as a maximum ceiling of 80% of the total interventions, or as a percentage of the total value of the building. Attention then that some clauses now widespread, favorable to the customer, often do not trigger for the mutual restructuring: it is the case for example of the possibility of suspending the installment.

The loan has some procedural advantages , due to the fact that the money, once the preliminary investigation has been carried out, is made available to the customer more quickly, and without the need to burden the property of a mortgage. «Having said this, there is no doubt that when the characteristics of the operation allow the loan to be obtained, this is to be preferred» says the consultant.

Will the trend continue? “The prospects are positive, but the tax department is the main unknown factor. The real engine that is driving the building interventions is represented by the generous deductions, certainly not from the foresight or the ecological propensity of the owners. And, in the absence of these reductions or with lower rates, the cost / benefit ratio should be reviewed “, concludes Romano di Consultique.

Educational loan for students

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Those who are in academic education would ideally like to be able to concentrate fully on it. Many, however, need a source of revenue to cover the ongoing costs. A part-time job must be, which often makes the study time unnecessarily difficult. A loan is a real alternative here.

What is the loan?

A loan is a state educational grant, which is limited in time. The funding is awarded in the form of a low-interest loan to various groups of people. The credit should not be confused with the payments approved under the Federal Training Assistance Act (). The loan is an additional subsidy.

For the receipt of the credit, it is not relevant in which amount the income of the applicant or his parents exists. The purpose of the loan is to cover unexpectedly costs that are directly related to the type of training and can not be met by existing payments:

  • excursions
  • study materials
  • school fees
  • Etc.

A loan is a state educational grant, which is limited in time. The funding is awarded in the form of a low-interest loan to various groups of people. (# 01)

How much is the loan granted?

The loan amount is paid out by the KfW, Kreditanstalt für Wiederaufbau. To enable the loan to students, the federal government acts as a loan bureau. This also allows the low interest rates of the loan.

The loan is paid for a maximum of 24 months within the training period. The payments are made monthly, the monthly installments can be 100 euros, 200 euros or 300 euros. The minimum loan amount must be 1000 euros. An applicant can receive a maximum payout of 7,200 euros.

It is not absolutely necessary to use the entire loan amount in successive payments. If, for example, two longer periods have to be covered by subsidies due to a costly field trip, they can be used independently of each other. It is not specified how much time must or may be between the payment months.

Who can use the loan?

There is no legal claim for the educational loan. The application is possible for several groups of people:

  • Full-time students who are already in the penultimate year of training or beyond and who are seeking or already possessing a vocational qualification.
  • Students who are already in an advanced training phase.

If the program does not provide an intermediate examination, the training center must provide a corresponding statement in writing. It must also be clear from this that the services provided to date have equaled a passed intermediate examination.

Students must have passed the intermediate examination of the program and continue to be in training (# 02)

Special features for the awarding of the loan

In addition to the basic requirements, there are a number of other framework conditions that must be taken into account for a successful loan approval:

  • Applicants must be of legal age.
  • Credit benefits can only be claimed up to the age of 36.
  • Credit benefits can only be granted until the completion of the 12th semester.

An exception is students who are already in the 12th semester and are admitted to the final exam. If the educational establishment confirms that the completion of the degree will be beyond the 12th semester, the achievement can be extended accordingly. Students who are in the field of human medicine in a practical year, can also get beyond the 12th semester, the performance.

How can students apply for credit?

The application for the education loan can be submitted to students in two ways. It is possible to submit the required documents and forms in writing to the Federal Office of Administration in Cologne or online via the website provided by the federal government bildungskredit.de.

After examination of the documents, a notification of approval will be issued by the Federal Office of Administration. This is issued to persons who fulfill the eligibility requirements. This notification allows the applicant to sign a loan agreement with KfW.

The applicants will receive a ready-made contract offer together with the notification. From here, the students and apprentices turn directly to the KfW. If the contract is not sent signed to the credit institution within four weeks after receipt, the validity of the approval notice expires.

Does the educational loan apply to study abroad?

It is possible to obtain the education credit for studying abroad. There are no restrictions for the chosen country. Upon application, it is checked whether the foreign educational institution is equivalent to a German university.

It is possible to obtain the education credit for studying abroad. There are no restrictions for the chosen country. (# 03)

loan: repayment and interest

As soon as the student has received the first loan payment, four grace years follow. When the four years have passed, the repayment period begins. Irrespective of the amount of the loan or the current income, monthly installments of 120 euros will be charged. Ideally, you are already in permanent employment for at least one year and are able to bear the costs.

Since this is not a profit-oriented credit agreement, it is always possible to cover the costs by partial payments or a one-time payment. There will be no extra charges for special repayments.

Is a student loan worthwhile?

Although the interest rate is based on the general interest rate level, it far undercuts the value of traditional installment loans. In the second quarter of 2017, the interest rate was reduced to a nominal value of 0.75%. This was in line with the general decline in interest rates. The low interest rates keep the total cost of the education loan extremely low. Also in terms of fees, the cost structure is very favorable.

Anyone who is unable to cover the cost of the loan leaves the debt burden to the federal government. The KfW relies on the guarantee deposited by the federal government and secures the repayment directly. At a later date, the Federal Office of Administration will contact the borrower and try to collect the outstanding payments. The Federal Administration Office is very accommodating. It is possible to arrange rates that are appropriate to the individual financial situation.

What is the difference between an education loan and a student loan?

While the loan is a state subsidy, a student loan is a classic financial product of private finance. This means: The terms of the loan are fundamentally different from those of the loan.

For the approval of a student loan, the banks demand high collateral. Typical is the guarantee. It is often asked by the parents of the student. These guarantee that in the case of insolvency of the borrower to settle the defaults. In this context, it is important to know that banks have to follow a long process to implement the guarantee. It must be demonstrable that the bank has used all necessary means, including foreclosure, to recover the costs from the borrower.

In addition to the high level of collateral, it is above all the costs that make up a student loan. Even though interest rates are based on the general market interest rate, banks can pay the high default risk with corresponding fees. Compared to a normal installment loan, students must therefore expect special conditions.

However, the student loan by the bank also has a few advantages:

  • Loan sum freely selectable
  • Flexible terms
  • Also available for freshers
  • Not earmarked

The application for the loan includes the indication of a purpose of use. Although this may be quite general, it still has to be study-related. For the loan application for the student loan it is not absolutely necessary to name a specific purpose. Even if the use is explicitly requested, it is possible here to name reasons such as relocation or the purchase of furniture.

Are there alternatives to the loan?

Nationwide, there are more than 2000 funding institutes and foundations that specialize in providing training. Contrary to popular belief, foundations are not reserved exclusively for highly gifted students. It is quite possible to secure funding through one of these foundations.

Apply for loan only if necessary

Even though the granting of student loans is subject to a few conditions, in many cases it is possible to secure it without much effort. However, this should not mean that as a student you consider the funding opportunity as a simple source of income.

The credit burden has to be borne after four years and can then become a real nuisance. Therefore, it is advisable to use financial support of all kinds only if there is no other way out. This ensures a debt-free start into the world of work.

Employer loans: benefits, opportunities, risks

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If you need a loan, you should contact the main bank first and foremost. The Employer Loan, also known as Employee Loan, offers the opportunity to use a low-interest loan.

What is an employer loan?

The employer loan is agreed between a company and an employee. Compared to the classic bank loan, these special loans are usually quite cheap. Companies use the granting of an employer loan to ensure a better employee loyalty, especially for qualified skilled workers with special skills, such offers are therefore easy to obtain.

Do you have to meet certain requirements as an employee?

The employer is in no way obliged to grant an employer loan. However, if it is customary for these to be awarded within the company, the general principle of employment law must be observed.

This means that all employees who take out an employee loan receive similar loan conditions and then, for example, regardless of whether the worker is in full-time or part-time employment. This requirement follows the prohibition of discrimination in § 4 (1) of the law on part-time work and fixed-term work (TzBfG).

Danger

Employees are not required to provide any employee with a loan just because they have already done so for other employees. Employees are in no way legally entitled to this particular form of loan. A rejection can be made for various reasons, such as due to existing debt or a current garnishment.

Does the employee have to name a purpose?

Again, there are no legal requirements, but it has become common in the course of time that an employer loan is often earmarked. This means that the capital is used for a specific reason:

  • Training
  • real estate
  • buying a car

There is a special regulation for company-owned goods. It is prohibited under § 107 paragraph 2 sentence 2 Trade Regulation (GewO) to grant a loan in order to leave the employee’s own products.

How much can the loan amount be?

Employer loans can be applied for at any credit level. Financing for further training is a classic case in many companies, and loan amounts between € 300 and € 2,000 are usually sufficient for this. More and more employers are also running special financing programs for real estate purchases. In this case, the loan amounts are correspondingly high. The legislator has not set any rules for maximum limits. This means that there is basically no limit to the top. Of course, the amount actually granted by the employer depends on the individual circumstances.

Why is the employer loan an alternative to bank credit?

Now the question is whether an employer loan is the right choice for everyone. Many workers are afraid of the idea of ​​being financially tied to the employer in the long term. However, there are a number of benefits that an employer loan has to offer:

For one, the loan is often very low interest. The employer is based on the market interest rates, but often the offer is below. This can make a significant difference, especially for large loan amounts.

Companies are also often able and willing to lend small amounts of credit without a full credit check. Obviously, the employer is informed about the amount of a regular income, so that only a few credit checks are performed. Collateral is not always necessary.

What should be considered when concluding an employer loan?

Whether employer loans or not, consumers should never refrain from making a comprehensive credit comparison. For although an employer has the opportunity to offer good terms, this need not always be the case. The framework conditions are also interesting for lending:

  • interest rate
  • running time
  • Repayment
  • unscheduled
  • termination

Is an interest subsidy the same as an employer loan?

It is possible to receive a so-called interest subsidy from the employer. However, this has nothing to do with the award of an employer loan. Here, the employer takes over the interest for a bank loan in whole or in part for the employee. The loan is taken by the employee from a bank. This interest subsidy is classified as a cash value benefit and is tax deductible in its entirety as wages.

How is the loan treated for tax purposes?

If you want to avoid causing trouble with the next tax return, you must take into account a few conditions when accepting the employer’s loan. If the loan is not contractually regulated, it may be that the entire loan amount is classified as a pecuniary advantage by the tax office. This means that the amount is treated in full as a wage, the capital is not correctly defined as a loan.

In this context, it should also be noted that according to a ruling of the Federal Finance Court (AZ VI R 28/06), the interest advantages of an employer loan are monetary benefits, the interest rate is below the market rate. Again, these costs are taxed as wages.

Are there any tax credits for the employer loan?

The Federal Ministry of Finance establishes an exemption limit of 2,600 euros for monetary benefits. This means that they only have to be fully taxed, the sum of the un-loaned loan after the end of the pay period is above this value. If, for example, an interest-free loan of € 1,500 is granted by the employer, which is assigned to the employee as a salary advance, the resulting interest benefit need not be taxed.

Note

According to § 8 para. 2 sentence 9 EStG, the employer can assign monthly subsidies of 44 euros to his employees. If this exemption limit is exceeded by the interest rate advantage, it must be fully taxed.

How can the monetary advantage be determined?

The interest rate advantage granted by the employer is determined individually for each case. There are no general rules here, according to each employer loan works with other numbers and conditions. The EStG distinguishes two ways for the determination of the monetary benefit:

  • Paragraph 8 (2) of the EStG: applies to workers who receive an employer loan from commercial firms and industrial companies that are not specialized in the business of loan agreements.
  • § 8 para. 3 sentence 1 EStG: Valid for employees who receive a low-interest employer loan from a financial institution.

Basically, one calculates the monetary value advantages over the market standard effective interest rate. Employees can find out their amount at, among others, the house bank. In addition, relevant information can also be viewed online, for example at the Deutsche Bundesbank. The usual interest rate at the time the contract is concluded is relevant for the calculation. This changes, it is an employer loan with variable interest rate.

Release of the loan capital by the employer

In order to be able to claim all payments taxable as loan capital and the interest rate advantages calculated, the originally agreed contract must be fully complied with. A classic employer loan agreement should not essentially differ from a classic installment loan contract. Here, in addition to the loan amount and the interest, the term, repayment and possible collateral are set.

If the employer makes part of the loan, the capital is no longer seen as an employer loan, but as a salary payment. This must be reported accordingly by both parties and taxed. The remaining loan amount is considered as a one-off payment in this case.

Danger

If an employer loan is granted without interest, it is also considered under tax law as a one-time payment.

Employer loans for employees of financial institutions

Employees who receive an employer loan from a financial institution are classified differently under the EStG. What type of financial institution in this case is the employer does not matter. What matters is whether the company operates as one of its main businesses to lend.

If there is an interest rate advantage here through the granting of the employer’s loan, this is regarded as a personnel discount in this case. This is accompanied by a separate tax treatment. The pecuniary advantage is not calculated using the usual market interest rates, but via the comparables of the financial institution. If the calculated monetary advantage exceeds the 1080 Euro, it will be fully taxable. What is below the allowance is not taken into account.

The advantages and disadvantages of an employer loan in the overview

Both employers and employees benefit from an employer loan. For the employer, it’s a great way to underpin their appreciation for employees. Above all, qualified specialists are needed in the highly competitive job market. If you want to achieve a close and long-term commitment, you can certainly spend these offers. But not only for employers there are significant benefits to discover. The loan is often very cheap and easier to obtain than a classic installment loan.

Note

If the employee leaves the company, the loan agreement will continue. It can therefore happen that the loan is paid off beyond the employment relationship. In this case, the conditions do not change. The original contract is still valid. This is also ensured in the case of a termination of the employment contract by the employer.

Car Loan

Whether new cars, used cars or vintage cars. When it comes to the car, everyone dreams of their own dream model. But this dream can not always be realized so easily. A cheap car loan, however, can fulfill this request immediately. More and more people therefore rely on a car loan when it comes to buying or financing a vehicle. Buying your dream car through a loan will yield some benefits for you. You benefit from favorable interest rates, a very fast processing and thanks to immediate payment you will receive your money tomorrow in the account. Take advantage of the favorable car loan and drive tomorrow to the car dealer.

Stay financially flexible – car loan with small installments

Are you interested in a car loan? Then today you have various means and ways available. While a traditional installment loan of the house bank is usually highly interest-bearing, since the bank receives no collateral, looks with a Kfz credit already a little differently. Also, the commitment to a pure car loan is usually much more likely than a simple loan. Some banks even offer a so-called “0% car financing” (car loan without interest). Through the 0% financing traders waive the cost of the loan and offer you an interest-free repayment.

Why is a car loan cheaper than a classic installment loan? A car loan offers the bank a higher degree of security when you deposit the vehicle registration document, which in turn has a positive effect on the interest rate of the car loan. After purchasing the vehicle, the vehicle registration document will be deposited with the bank as collateral and you will enjoy the benefits of small installments. With the help of a favorable car finance dreams can be realized sometimes within one day. Similar to a home or real estate financing, in which a home is deposited as collateral with the bank.

The amount of the installments depends on different factors. Of course, you as a customer have a certain say in this position. The longer the term, the smaller the installments and the higher the financial flexibility. Other customers, on the other hand, would rather have a shorter term and lower interest rates. Also possible is the financing of the car through a car finance with closing rate. For motor vehicle financing with a very high final rate, this is referred to as so-called balloon financing.

At which conditions you want to take out a loan, you ultimately decide. The current life situation plays a decisive role here. Financing the dream car no longer has to be a pious wish.

What are the advantages of having a car loan?

In addition to greater flexibility, car loan offers the chance of cash discounts. These are special discounts, which car dealerships or even dealers give, if the customer pays the vehicle in cash. So if you complete a car loan, the sum will be credited to the account within a very short time and you can basically immediately implement the purchase of the dream car.

Do not be too small to act. Partial discounts can be negotiated up to 20%. A little skill and confidence are needed. It is worthwhile in any case to conclude a car loan, which is not directly related to the dealer or the dealership. Because here you as a customer hardly have the opportunity to compare the car loan and sometimes customers are promised that due to the cheap financing no discount is possible. In any case, it is better to apply for a cheap car loan online and to appear with the total cash at the dealer. This assures you a perfect basis for negotiations.

For what purposes can a car loan still be used?

A car loan does not always have to be used to buy a new car. There are a few other uses that can benefit from the benefits of the loan. There is a distinction between car financing, where you deposit the car as a security (vehicle registration), or whether you apply for an unsecured loan. The latter is basically for free use and therefore not bound to the intended use of the car purchase.

Apply for cheap car loan online in just a few steps

Times have changed. It has never been easier to apply for a car loan than it is today. Modern communication and networking make it possible. If you are looking for a cheap financing for a vehicle quickly and, above all, uncomplicated, then you are in the right place.

The fully digital loan can be requested by you within 5 minutes anytime, anywhere. All you need is a smartphone, laptop or PC with internet access.

As usual, first the most important personal data are recorded. The verification of this information is either via two ways. Either over the data upload or by the verification over your account.

A direct commitment is therefore possible because the data is compared in real time and a further query of other personal information is not required. A demand at the does not have to be carried out.

About the video identification of the vehicle loan can be signed and it is only the so-called “eSignature” due.

Afterwards the loan will be paid out immediately (car loan with immediate payment). In other words, apply today for your cheap car loan and go tomorrow with the money to the dealer to meet your car request.

Car financing also possible without !

If you want a car loan without , this is no problem. Due to the fact that the verification of the salary account is carried out and thus a regular receipt of money is confirmed, a cheap car loan is despite negative nothing in the way.

Many people have been denied this possibility so far. But now you too can benefit from favorable conditions and directly conclude your car loan online. Fulfill the long-awaited dream and maybe drive tomorrow the car, which you always wanted to drive once. Whether high-class new car or a collector’s item from old times. The cost-effective financing makes it possible for you to fulfill this wish.