Most people come into the situation of needing money quickly. Be it for a big purchase or to overcome a financial shortage. The idea of having several hundred or even several thousand euros from one day to the other causes many customers to apply for a loan. If it comes to rejection, the disappointment is great. One reason why the loan is declined may be too high a sum.
There is a greater chance of success for consumers who only claim credit at the level they really need. The question of how high the loan can fail can not be explained in one sentence – after all, every loan is subject to different acceptance criteria.
Anyone who asks themselves, “How much credit can I afford?”, Has to think in different directions and must not ignore the reason for the financing.
Do a house – credit helps
Living in your own home one day is the dream of many people. Unfortunately, most can not afford a house, at least not on their own. There is no question: A loan has to come from. Real estate usually costs a lot of money – although buildings for several hundred euros are usually paid off without credit and in installments, the new inhabitants still have to invest a lot of money.
It is recommended to pay a little more. Thus, the chance increases to a serious offer or on a house that is not in need of renovation. In particular, who wants to afford a new house, requires a lot of capital through a loan.
How much can I afford?
Who decides on a loan should not fix a fixed amount. The amount of credit needed depends on different criteria. It is important to think until the end. So that means: The loan should not be used solely for the payment of the property. Many borrowers still have to afford a renovation or want to make renovations. It is better to take the credit in the sum as needed. Unfortunately, this project is not always easy, because ultimately the bank decides what credit someone can afford.
However, financial support is not a game of chance, so prospective borrowers can tax a positive decision on the loan. The best way to ask interested parties is not only the question: “How much credit can I afford?”, But what are the expectations of the bank and what can be fulfilled. These include income of a certain amount, Credit bureau entries, age, place of residence and whether a loan is already being paid (if necessary, customers should consider rescheduling). Depending on whether borrowers buy a new house or afford an existing property, the loan amount is several tens or hundreds of thousands of euros. A cash fall helps to determine the available capital. An example calculation shows how much credit a family can afford:
890 Euro (fortune after all deductions) times 12 months times 100 (percent) gives 1.068.000. This number is divided by the interest rate plus the repayment rate (in percent). The result indicates which credit the family can afford. At best, borrowers have equity. This is added to it – the family can then afford a loan increased by the equity.
Most banks offer special construction loans, making it easier for the borrower to calculate.
For a normal loan other guidelines apply
Applicants who do not want to afford a home, but need the loan for a smaller purchase, do not have to make complicated calculations. Nevertheless, here as well: do not take more loads than necessary. If the interested parties want to afford a vehicle, there are usually also separate conditions and loans for this purpose. Otherwise, the loan may only be needed for a washing machine or for balancing the checking account.
As an applicant you have to consider how much credit you can afford. First of all, if you only want to balance your account, you should use the financial support only until you have reached the credit balance – to claim a higher credit in order to be able to afford it is recommended only if the additional purchase is unavoidable and necessary After all, borrowers also pay interest back. The higher the amount, the more interest you pay.
How much credit can I afford – a short version
The amount of the loan to be disbursed depends on the following factors :
- Value of the goods to be purchased
- existing equity
- Tolerance of certain loan amounts by the bank
You can not always afford the credit you want. However, there are ways to make the lender more attractive in order to increase the chance of a commitment.
So you become an interesting borrower
Credit bureau is a big topic when it comes to getting a loan. Some banks offer the loan without Credit bureau. Once a year, interested parties can send a list of their Credit bureau files. The overview can be used to determine which entries still exist. If possible, you should have wrongly deleted existing entries (possible when the case is done) – the higher the Credit bureau score, the better. Often, income plays a crucial role. If you want to get the loan you want, you might want to take a second job to increase your income. In addition, it is advisable not to take a disproportionate loan: those who only earn 1,000 euros probably will not get a loan of 50,000 euros. The following factors make lenders more interesting:
- higher income
- positive Credit bureau
- honest information in the application, proportionate loan request
The collateral – different loans with different requirements
Consumers who make a loan without Credit bureau need so-called guarantees – guarantees for constant installment payments, for example through a guarantor. There are prospects who afford a personal or blank loan. The special requirements for creditworthiness and proof of repayment ability apply. Customers can also afford mortgages – but this is a loan in the true sense. Rather, the “hypnotist” must be in a debtor relationship. As security, the land charge on land seizes. The security that a bank wants to demonstrate depends on the kind of loan you want to afford; Other collateral includes, for example, collateral and the provision of insurance by the borrower.