Loan Realization in 2017 – Borrow or Not
In many life situations, we need financial support, which is typically found in a parent or financial institution. Which of the above desires is a good reason for borrowing, and on the basis of which banks make the decision to approve a loan, let us look together in the following section on how banks decide whose needs or desires are worth taking the risk on. But it also speaks to the risks that citizens need to be aware of when deciding to borrow in 2017.
Good Finance Credit Questionnaire
The article deals with the subject in detail. If you’re just looking for the best line of credit and don’t have time to read, you can fill out a credit questionnaire right away.
Let’s go to the questionnaire!
First of all, the bank determines the creditworthiness of a potential borrower, ie assesses its ability to pay the installment / annuity loan on a regular basis in the future. As a basis for creditworthiness, banks define: the amount of income a client receives and the orderliness of fulfilling their existing obligations. But banks do not know with certainty whether an acceptable borrower will pay the loan tomorrow.
Only citizens – potential debtors – know the exact answer to the question of whether they should borrow in 2017. The assumption is that citizens are familiar with their own sources of income, the actual amounts of regular incomes and monthly obligations, that they are aware of their health situation and working capacity, that they differentiate their needs from desires and desires from opportunities, and that they know how they intend to spend money from approved loan.
Good Finance Group Credit Brokers will advise you not to enter a credit relationship in 2017 if you do not have an exit solution in case you reduce your monthly income, lose your job, exercise your pension rights, etc. Only when there is a cash fund in which reserves sufficient to cover six monthly installments you should decide on the realization of the loan.
Arrange safe and / or favorable interest rates
A potential interest rate risk involves a change in the amount of the annuity or loan installment. The problem arises when interest rates rise. The greatest risk is for debtors who have contracted annuity repayment over a longer period. Debtors who have agreed a fixed interest rate do not face this risk.
When deciding whether to negotiate a variable or fixed interest rate, citizens should take into account that the change in interest rates is market and not administratively conditional. The variable interest rate consists of a fixed margin and a variable reference parameter. Thus, the interest rate fluctuates depending on the fluctuations of the contracted parameter, typically NRS, EURIBOR, LIBOR and Treasury bills yields. Regardless of the type of benchmark interest rate, market interest rate growth will translate to a variable interest rate.
Given that the possible growth of reference interest rates is an important source of risk for debtors, they should certainly be kept informed.
It is important to note that clients who duly fulfill their commitments, whether contracted at a fixed or variable interest rate, can always refinance existing loans.
Credit in local currency or with the euro clause
By negotiating a loan with a currency clause, the user assumes the risk of changing the loan rate depending on the change in the exchange rate. If a loan with a currency clause is contracted for a longer repayment period, there is a greater likelihood that a significant exchange rate change will occur in the repayment period.
When negotiating a loan with a euro currency clause, it is important to know that the value of the kuna against the euro is overvalued, and that the CNB is the one that keeps the kuna stable, and the kuna is by no means fixed with the euro, as citizens often believe.
Given that foreign currency savings are predominant in Croatia, mainly with the euro currency clause, the CNB will curb major changes in the kuna / euro exchange rate. Savings in kuna have been extremely encouraged in recent years. On the other hand, a stable exchange rate of the kuna against the euro is necessary, as a fall in the value of the local currency would put many debtors in a situation where they would not be able to repay their loans.