Why is the APRC not a good indicator of the attractiveness of loan companies’ offers?

Finding the best non-bank loan involves analyzing the various offers. Take into account not only the repayment terms and requirements for customers but also the fees added to the basic amount.

This indicator is referred to as the APRC, which many people confuse with the nominal interest rate. What is worth knowing about these parameters?

Nominal interest rate and APRC

Nominal interest rate and APRC

Financial institutions are required to inform customers of all costs that affect the repayment schedule. Many people are attracted by the nominal interest rate, which only determines the amount of interest on an annual basis. APRC is a much broader indicator and includes all loan costs, such as:

  • nominal interest rate,
  • commissions,
  • additional fees,
  • insurance.

And what does the APRC not include? Notary fees and the cost of additional services that are not directly related to the loan, such as setting up a bank account or credit card, are not included in this indicator.

Why is the APRC higher than the interest rate?

Analyzing individual offers, it can be seen that the APRC is often higher than the interest rate. This is the case with cash loans repaid in installments because the capital made available is stretched over time. Therefore, it includes all the costs of debt, which are repaid gradually. Only in the case of a one-off repayment of the entire liability, the APRC would be equal to the interest rate.

How to calculate the APRC?

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A special mathematical formula is used to calculate the APRC height, but it is quite complicated and easy to make a mistake with. A better way is to use the APRC calculator, which can be easily found on the internet. In order to make calculations, it is enough to complete such data as:

  • cash loan amount,
  • repayment period,
  • interest,
  • commissions,
  • other costs,
  • installment type

On this basis, the calculator will calculate the APRC, which can help you choose the cheapest loan.

APRC – how does it affect the loan?

The actual Annual Interest Rate defines how the debt costs of the selected loan are presented. However, this is not a reliable indicator on the basis of which you can choose the cheapest offer. It all depends on the repayment period, so comparing a short-term payday loan with a long-term loan does not make sense. The longer the loan period, the higher the APRC will be for the same amount as it is spread over time.

APRC is also not a good indicator of attractiveness in the case of loans repaid in various installments. This means that a comparison of a cash loan with decreasing installments with a fixed installment will not give a reliable assessment. The best solution in finding the cheapest offer is to use the online comparison site. At Good Finance you can check which among the loans with the same parameters is the most advantageous option.

Divorce and repurchase of credits: instructions for use

 

Divorce is the source of emotional and psychological concerns as well as financial difficulties. This is why, the repurchase of credits can be an interesting solution to start serenely a new life and face future expenses.

Divorce and its financial consequences

Divorce and its financial consequences

As soon as you find yourself in the process of divorce, you have to face many costs, such as the costs of lawyer and notary, the cost of relocation as well as that of the new equipment to be bought. Once the divorce decree is pronounced, the community, which notably includes the house, the car, all the loans or the overdrafts, is liquidated, which means that all the material goods are divided. Loans and joint accounts are separated in order to cut all financial ties with your former spouse. Therefore, you must take charge of your share, which leads to an increase in your debt and a significant drop in your budget. Separation is one of the most common causes of over-indebtedness.

The solution: buying back credits

The solution: buying back credits

Depending on your situation, you have the option of restructuring your debts after a divorce. Credit consolidation can include a cash buyout, consumer loans, mortgages, alimony or even compensatory benefits. The advantage is to be able to reorganize all of your loans to match them into one while reducing your monthly payment. It can be useful to fully assume your credits after the divorce by spreading your debts, but also to build up capital in order to buy back the real estate share of your ex-spouse.

A special situation: the buyout of the real estate share

Divorce and its financial consequencesA special situation: the buyout of the real estate shareDivorce and its financial consequences

This situation needs the implementation of a cash buyout, that is to say the buyout of one of the two shares following the division of a property after the delivery of a divorce. Thanks to this solution, one of the two ex-spouses can buy back to the other the share of the accommodation, of which he will then be the full owner, provided that he has sufficient income. Indeed, depending on the date of purchase of the property, it is not always advisable to resell the common property. For example, if the mortgage is less than two years old, it is still far too little repaid, which will most likely make you lose money.

The optimal solution is then to make a grouping of credits so as not to lose the reimbursements already made. To assist you, the loan buy-back expert offers you a free comprehensive diagnosis adapted to your situation.

What is a restructuring loan?

The concept of restructuring is very extensive and most often refers to a change in the economic structure of the enterprise, which leads to an increase in its efficiency or functionality. In the financial context, however, one can talk about a restructuring loan.

 

What is it and who is it for?

What is it and who is it for?

 

Restructuring loan is a loan that is intended to help a customer who is already repaying a bank loan in paying installments on time. It aims to change the repayment terms at the same bank due to the worsening financial situation of the borrower. 

 

Specific offer from a bank

Specific offer from a bank

 

Loan or a restructuring process of restructuring the loan is a financial service offered to banks, which aims to change the repayment terms of the loan current. Restructuring can often be the only solution to customer financial problems that could lead to a loss of financial liquidity and to insolvency and falling into a spiral of debt.

 

When a restructuring loan is taken, the terms of repayment of existing liabilities change. The bank granting such a loan modifies the credit terms and adjusts them to the client’s financial possibilities. These may be much smaller than when the loan was taken. The repayment schedule is changing and in the majority of cases the restructuring leads to the extension of the loan repayment period, which, unfortunately, causes an increase in interest and total loan costs.

 

The restructuring loan is not a completely new loan for the borrower, as is the case with consolidation and refinancing loans. So the lender doesn’t change.

 

Who will benefit from credit restructuring?

Who will benefit from credit restructuring?

 

Banking law guarantees all borrowers a chance to restructure the loan. An application for restructuring may be submitted by anyone in accordance with Article 75c of the Banking Act of August 29, 1997. The bank is obliged to accept such a request and should enable debt restructuring by changing the loan repayment terms or terms, provided that it is justified on the basis of the bank’s assessment of the financial and economic situation in which the borrower finds himself.

 

Most likely, the person who already has debts in a given bank and has ceased to pay the loan installments will have no chance of restructuring. Restructuring should be applied for when we know that we will have financial problems, which will most likely prevent us from paying off principal and interest installments, but we are still meeting our obligations to the bank.

 

This action will also cause the bank to consider the client as a reliable and trustworthy borrower and willingly renegotiate the terms of the contract as part of the loan restructuring. It will be in his interest that the customer be able to pay the installments on time and finally meet his obligations, even if it would happen much later than originally assumed in the loan agreement.

What supporting documents for your loan repurchase?

 

The repurchase of credits allows you to repay only one loan by grouping all your debts. This new loan is taken out according to your needs and repayment capacity. The supporting documents are used to assess these points in order to guarantee you an offer adapted to your profile.

Supporting documents necessary to assess the feasibility of your loan buy-back

Supporting documents necessary to assess the feasibility of your loan buy-back

First, the broker studies your online request based on the information you provide. Remember that this first step is completely free and does not commit you to anything: it allows the broker to perform a first analysis of your file.

If your project and your profile seem to allow a grouping of credits, the broker will contact you to request additional documents. These are used to specify your project, an essential phase to check the possibility and the interest of buying back your credits.

The supporting documents requested are, for the most part, the same as those required for the granting of a loan from a bank. Among the first documents requested:

  • A copy of your national identity card
  • Your last three pay slips
  • Supporting documents for all your current loans

Find the list of the main documents to best prepare your loan repurchase file. In addition to being used to assess the feasibility of the operation, this information also makes it possible to find the offer to buy back loans at the most advantageous conditions with regard to your project.

Better knowledge of the file for an optimized operation

Better knowledge of the file for an optimized operation

Your supporting documents give the broker all the data he needs to canvass his banking partners effectively. An in-depth study of your file is indeed essential to submit quality commercial offers and real benefits.

Why a broker for your credit buy-back? Brokerage is strongly advised for this transaction: the broker’s financial network allows many offers to compete. In addition, restructuring your debts on your own is a time-consuming process and the offer obtained is rarely the best for you.

The average drop in monthly payments was $ 530 on credit consolidation applications validated. The rates continue to drop this year, you can hope to obtain similar or even better results!