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Credit Despite Debt – Housewife loan

The housewife’s credit

The housewife

In most cases, those who have a negative Credit Bureau entry will not receive any money from their house bank. But there is a solution: The housewife credit is needed! However, caution is advised here, because providers who work without a credit check are often dubious.

The housewife loan is basically a normal consumer loan, as it is granted by banks, savings banks or online banks. Some providers on the Internet expressly advertise that no credit check is carried out.

However, there are serious providers of housewife loans that are offered through credit intermediaries or foreign financial service providers. It is important to remember, however, that if the Credit Bureau information is not provided, generally worse conditions are offered. Housewife’s credit can quickly become an expensive pleasure that only increases the mountain of debt.

Disadvantages of the housewife loan:

  • high interest rates
  • high fees
  • exact conditions are only given on request

There are no generally valid loan offers here, these are precisely tailored to the respective customer. Loans are processed via the Internet, which can even be done very quickly. Anyone who makes an inquiry will get an answer within a few hours.
The lower limit for housewife loans is 500 USD for most providers.

The advantages of a housewife loan are:

The advantages of a housewife loan are:

  • prompt processing of the request
  • with approval: rapid payment of the loan amount
  • Even small financing requests are taken into account (from 500 USD)
  • Lending possible without a Credit Bureau check

However, the housewife loan is not always granted. It is not necessary to have a permanent job and you do not need a regular income. However, it must be proven that there is enough money left each month to repay the loan installments if all expenses are deducted. Proof of salary must be provided if available. If necessary, a surety can also be consulted.

CAUTION: If you do not have a secure financial position and have had payment problems before, you should not carelessly take out a housewife loan. There is a great danger that the debt trap will become a bottomless pit. Even low loan amounts can become a major burden due to the high interest rates.

Everyone should ask the question here: Do I really need the loan? Or can the planned purchase wait a little longer? Satisfying consumer needs has become the top priority – but this should not be the case if debts already exist.

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Bank loans advance

Advance bank loans are a type of long-term loan; they are mostly used to pre-finance a building society loan contract that has not been paid or has not been fully paid up. The home savings sum corresponds to the amount of the loan. However, no repayments are made with this type of financing, the borrower only pays savings contributions for the building loan contract and interest during the term. Only with the allocation of the home savings contract can the bank advance loan with the home savings sum be redeemed. This type of financing is particularly suitable for renovations or if the borrower has to cover a certain period of time financially. A bank advance loan therefore also creates a certain amount of security until the date on which corresponding cash receipts such as the maturity of a life insurance policy or a fixed-term deposit investment can be expected.

Bank advance loan variant

The banks have the investment or life insurance pledged to secure credit. In most cases, this loan variant has a term of between 8 and 10 years. The advantage of this loan is that the borrower does not have to wait until his home savings contract is ready for allocation, but can immediately have financing. A bank advance loan thus represents a long-term loan for the pre-financing of own or external funds in the context of real estate financing. For larger amounts, a bank advance loan is secured by entering a land charge and assigning the claims from the building loan contract.

Real estate financiers who want to keep their monthly charges low can place several building loan contracts in a row. The borrower only has to pay the savings contributions and the loan interest. At the same time, however, the borrower has the option of having the necessary funds available before the due date, because he is virtually pre-financing them. If advance loans are to be repaid via a newly concluded building society contract, this building society contract serves as a so-called repayment alternative. In this way, the home savings contract can be pre-financed or interim financed. Example:

Conclusion: If the loan is allocated quickly, it can be quickly replaced by the building society contract.

This financing option also offers advantages for families with children who want to own a condominium or a house in the countryside. In many cases, such a goal can only be achieved through an advance bank loan, because buying a property is always associated with very high costs and thus a financial burden for everyone. With a bank advance loan, however, the dream of owning a home can be fulfilled; you have something stable and secure at a very early stage – even without a lot of equity. If you want to be sure with this financing option, you shouldn’t take out the first-ever loan or real estate financing, but also ask a loan calculator in advance. Because even the smallest differences in interest rates reveal significant differences in monthly charges.

Advantages and disadvantages of a bank advance loan

The term advance bank loan is identical to the term fixed-amount mortgage and has the advantage that no repayment is required during the entire term. Rather, this takes place at the end of the term and then in one sum. Over the term, the borrower pays the contributions and savings for the home savings contract in addition to the interest. The respective amount depends on the term of the building society contract and the agreed building society sum. When the building society contract expires, the existing fixed-amount mortgage is then repaid in one sum. Another advantage is that advance bank loans can also be realized in combination with life or pension insurance as well as with investment and savings contracts.

The difference to the annuity loan is, in particular, that in this financing variant, the monthly repayment significantly reduces the percentage of the remaining debt. In the case of an advance bank loan, the lender receives only the agreed interest due to the repayment suspension; the borrower is entitled to the accumulated credit from the home loan savings contract. Comparing the number of annuity loans with an advance bank loan, i.e. a final loan, the calculation is as follows:

Annuity Loan Amount of the mortgage loan 150,000 USD
fixed interest period 15 years
nominal interest rate 5%
Interest, principal and home savings payments 2.667% (= 333.33 USD per month) monthly with immediate settlement
Final loan payment in a new home loan contract 333.33 USD (= 4,000 USD pa)
savings target identical
Interest and building society savings payments no monthly
Calculation of annuity loans
Remaining debt after 15 years 60,992.74 USD
Building society credit after 15 years in accordance with building society tariff XY 0.00 USD
Building society loan after 15 years in accordance with building society tariff XY 0.00 USD
After 15 years, there is an increase in debt due to the home savings deposits
in the amount of 28,835.59 USD
Amount of the monthly rate for interest and repayment 629.00 USD
Total runtime 16 years, 2 months
Nominal interest pa 9.84%
If the affiliate loan is after 15 years with the annuity loan
below 9.84% pa, the bank advance loan is more expensive
Calculation of advance bank loan
Remaining debt after 15 years 150,000.00 USD
Building society credit after 15 years in accordance with building society tariff XY 61,671.67 USD
Building society loan after 15 years according to building society tariff XY 89,828.33 USD
After 15 years there is more debt due to the savings in home savings
in the amount of 28,835.59 USD
Amount of the monthly rate for interest and repayment 629.00 USD
Total runtime 16 years, 2 months
Nominal interest pa 3.95% (4.5% effective)
If the affiliate loan is after 15 years with the annuity loan
below 9.84% pa, the bank advance loan is more expensive

Due to the right of termination by the borrower after 10 years (ยง 489 BGB), this interest rate is rather unlikely. If we take a follow-up interest rate after 15 years, which should be 7% pa, the loan would have been repaid even faster, namely after 11 years and one month. This would save the borrower around 31,000 USD (629 USD x 49 months). From this calculation it can be seen very well that a new building society contract is generally not recommended for a later repayment of a bank loan. In addition, there are the closing fees for the building society loan contract as well as other loan and account management fees for the building society loan.

The use of a building society savings contract therefore only makes sense if it either becomes ready for allocation in the foreseeable future or if it can be saved as a result of asset-related benefits.