Month: November 2019

Assignment of wages and salaries for loans

by admin

Almost every second German over 18 has taken out a loan once. A loan agreement was signed for this. Assignments of wages and salaries are an integral part of the loan agreement. What is hidden behind these terms, in our article.

Banks need collateral

Banks need collateral

Banks have a lot of money, but they don't lend it to everyone who makes a loan request. Banks need collateral much more. Assignments of wages and salaries are included and are accepted when a loan agreement is signed. This enables the lender to contact the borrower's employer directly if the loan installments cannot be paid. Employers then transfer the required amount directly to the creditors. But there are untouchable sums.

Subsistence level and other untouchable amounts

Subsistence level and other untouchable amounts

The basic allowance for attachments is currently $ 1,133.80. This means that the amounts up to this sum always remain free of deposit. Furthermore, the following cash benefits are not attachable: Overtime payments, vacation payments and payments to persons subject to maintenance (above all alimony).

The more you earn, the bigger the deposit will be deducted. Anything over $ 3,500 per month is considered fully attachable.

Afraid of attachment?

Afraid of attachment?

An attachment is always unpleasant. Especially because the employer is always involved as the third party. You don't get killed, so it's best to inform the employer yourself before the creditor does. You shouldn't be afraid either, because you are not the first, and certainly not the last, to be involved in a mortgage process. Furthermore, a garnishment must never be seen as a reason for termination, so that you do not have to fear directly for your job. There are always exceptions (more about this here), but mostly they are isolated cases.

Tips

Tips

You should think carefully before signing a transfer of wages. If you have already done so and you expect to be seized soon, you should ask the employer to talk to you before the creditors surprise you.

There are now enough debt counselors who can be helpful with various questions and uncertainties.

Conclusion: Garnishments are unpleasant and it is best to avoid them - but if you are inside, you simply have to go through it. Preparatory measures are essential in the situation: inform employees in good time, calculate the possible deposit amount from the table and, if necessary, consult a debt adviser. And remember: everything will pass!

What is a good loan?

by admin

Nominal interest rate

Nominal interest rate

Loans are currently very cheap thanks to the low interest rates. Many who want to take out a loan are happy about it. But low interest rates do not automatically mean that you actually get a cheap one, and thus - in the opinion of many borrowers - a good loan. A good loan is not the only thing that makes up the nominal interest rate , not just the nominal interest rate given to the lender. Especially the people with limited financial knowledge often make a mistake.

Nominal interest rates only state how high the interest rates for the loan offered are per year. Nominal interest does not include all costs. Such expenses as processing fees, disbursement costs, repayment periods etc. are only received in the annual percentage rate. To put it simply, it can only be said that the entire monthly repayment rates including all costs can only be calculated with the help of an effective interest rate. In this respect, you should always compare the various loans with the help of an effective interest rate. Because only the low effective interest rates make a good loan.

Good credit is the fixed interest

Good credit is the fixed interest

Another characteristic that speaks for a good credit is the fixed interest . Since interest rates are still low at the moment, fixing interest rates for a longer period is very advantageous financially. Because only this step can guarantee that a loan does not become more expensive with the interest rate increase, and thus your own planning security is maintained.

Not everyone can offer loan collateral to a lender . But some loans automatically include such. One example is a car or property purchase. The following are examples of collateral for the bank:

  • the vehicle or
  • estate

If such a loan cannot be repaid, the banks automatically acquire ownership. That is why such loans are usually cheaper. Savings deposits and guarantees also ensure that loan interest rates can be offered lower than the average.