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A residual debt and now?

It’s time. Your property has been sold! For many people that is a big deal. The average home is soon for sale for more than a year. But with the sale of your home, you are usually not completely rid of your mortgage. In many cases, a residual debt remains.

A residual debt is the debt that remains when a house yields less after the sale than the mortgage debt that exists. So if, for example, you sell a house with a mortgage of € 250,000 at a price of € 200,000. Then the remaining debt is € 50,000; the difference between the proceeds and the mortgage debt.

Because not everyone has the option to pay off the residual debt with their own resources, I will discuss the possibilities that you have to finance a residual debt in this blog.

Option 1: You make a (residual debt) arrangement with your mortgage bank

Option 1: You make a (residual debt) arrangement with your mortgage bank

In consultation with the bank where the residual debt remains, you will find an arrangement whereby you will repay the debt in installments. Often at a considerably higher interest rate than the interest you paid for your mortgage. Your mortgage bank is not obliged to cooperate with a residual debt scheme.

Option 2: You take the remaining debt with you in a new mortgage

Option 2: You take the remaining debt with you in a new mortgage

When you buy a new home and finance it with a new mortgage, many banks offer you the option of financing your residual debt within this new mortgage. Of course you must then meet the mortgage standards.

Option 3: You finance your residual debt with a revolving credit

Option 3: You finance your residual debt with a revolving credit

You can also choose to finance your residual debt with a revolving credit. In this way you opt for flexibility. With a revolving credit, you can always pay extra (fully or partially) without penalty. You may also withdraw the amounts that you have repaid (extra). Only the interest that you pay on the amounts withdrawn is not tax deductible. Other features of a revolving credit are:

* You have a variable interest rate and term
* You only pay interest on the amount withdrawn
* You pay a fixed monthly installment (2%, 1.5% or 1% of the credit limit)
* Your monthly installment consists of interest and repayment

Option 4: You finance your remaining debt with a personal loan

Option 4: You finance your remaining debt with a personal loan

In addition, you can choose to finance your residual debt with a personal loan . With this you opt for certainty; the certainty of a fixed monthly period, a fixed interest rate and a fixed term. You can therefore perfectly match the duration of your personal loan to the maximum term that you may deduct your interest for tax purposes. Other features of a personal loan are:

* You borrow a fixed amount once
* You know in advance where you stand
* At a number of banks, you may recently repay without penalty

The interest is tax deductible

The interest is tax deductible

It has just been mentioned, the interest you pay on your residual debt is tax deductible. This applies to both a revolving credit and a personal loan. The condition here is that the residual debt arises after October 29, 2012. Since 1 January 2015, the period that you may deduct this interest has even been extended from 10 to a maximum of 15 years! So make sure that the maximum duration of your loan is 15 years.

Obtain information in advance

Obtain information in advance

In any case, it is important that you are properly and timely informed about the options for financing your residual debt. Even if your home has not yet been sold, that is wise. After all, you want to know what awaits you. The CreditPostol partner banks can also issue an agreement for a residual debt loan, subject to the definitive sale of your home. This way you know before you start selling the property that you have arranged your residual debt financing properly.

Of course at the lowest possible interest and without closing or consultancy costs. As you are used to from CreditPostol. Do you have questions about your residual debt? Or do you need help with taking out a residual debt loan?

 

Pay off debts with personal loan

If you want to pay off your debts in one go so that you only have to deal with one party, the personal loan may be suitable. Simply put, you get a personal loan by requesting one or more quotes. Yet it is good to know why you exactly want a personal loan. The personal loan is one of the most common loans in the Netherlands. This loan is popular because your personal needs and wishes are taken into account. The usually lower interest rate on this loan is another reason why this loan is so popular. The interest on the personal loan is often not only low, but is also often fixed for the duration of your loan.

The personal loan therefore offers more certainty in the area of ​​interest rate risk than, for example, a revolving credit. The amount that you pay in installments and interest per month is therefore fixed. This is an advantage because you will not be faced with unpleasant surprises, but this can also be a disadvantage because early repayment is prohibited and entails a fine. If you need money for a renovation or the purchase of an expensive product such as a car or motorcycle, the personal loan can be a good solution. The low interest rate and the security make the personal loan a form of borrowing that is very popular.

Exactly how much money do you want to borrow?

Exactly how much money do you want to borrow?

If you want more money without having a specific goal, then a revolving credit is suitable for you. With a revolving credit, you can have an amount of money that you indicate yourself, provided you receive the loan. You can withdraw money from your account when and how much you want. You can also repay the borrowed money without penalty whenever you want, but you can also withdraw the money if you wish. Because you can pay off without penalty, different lenders also charge different interest rates that can often be higher than with a personal loan.

On the other hand, the advantage of a revolving credit is that you determine how long the term of the loan is because you pay off when you want. That is why it is called a revolving credit. If you compare revolving loans, it is most important that you ensure that the loans you compare have the same term. You can easily consult various providers online and you will know within 10 minutes how high the interest is and luckily this is also completely free of obligation.

Why should you not opt ​​for the personal loan?

Why should you not opt ​​for the personal loan?

One reason why you should not opt ​​for a personal loan is that it is not usually possible to borrow money. This means that with a loan of 10,000 euros you can later borrow another 2,000 euros with the same personal loan. This is restrictive on the one hand, but also safe on the other so that you do not keep borrowing money. Another side effect of the personal loan is that you have to pay a fine if you want to repay early.

This ensures less flexibility. This fine exists because the lender wants to be compensated for the fixed term of your personal Loan. The bank misses out on interest income because the loan has a shorter term due to the early repayment. Reasons why people do borrow money through a personal loan are: the low fixed interest rate, the security and the fixed monthly charges. The interest rates of different credit providers differ and that is why it is easiest to inquire online with the provider to know exactly what the requested interest rate is.

Apply for continuous credit – Online with low interest rates

Taking out a Standing Credit means borrowing money flexibly. Not only do you borrow money for a specific loan goal, such as a car, but you also want to have access to extra money in the event of unforeseen expenses. If the washing machine or dryer breaks, you want to be able to buy a new one immediately. If you have to deal with an expensive repair or maintenance of your car, you want to be able to arrange this immediately. With this flexible credit you don’t have to worry about these unexpected, sometimes high, expenses.

Characteristics of a Revolving Credit

Characteristics of a Revolving Credit

A Continuous Credit is, just like a Personal Loan, a loan form of consumer credit. The flexible form of borrowing is characteristic of the Continuous Credit and it gives you financial freedom. You agree on a credit limit and up to that limit you can decide yourself when and how much you withdraw. In the case of an unexpected release, you can immediately dispose of your money. You only pay interest on this withdrawn amount. The interest and duration are variable.

What makes this credit really flexible is that you can withdraw repaid amounts up to your withdrawal limit. A revolving credit means withdrawing money when you need it.

Duration

In contrast to a Personal Loan, a Continuous Credit has no fixed term. Credit providers want you to have repaid the credit before reaching a certain age. We use the maximum age of 74 years; before you reach this age, the revolving credit must be fully repaid.

Tax benefit

Taking out a revolving credit to finance the residual debt on your home means that the interest costs are tax deductible. You do not receive this tax benefit when financing other loan objectives. This scheme expired on January 1, 2018, but still applies to rescheduling of a residual debt.

With a Personal Loan the interest costs are tax deductible if the loan target is residual debt financing, or a renovation or improvement to your own home.

Fines-free redemption

With a revolving credit you can redeem at any time without penalty. Do you have a financial windfall? Solve this amount free of charge on your credit and reduce your outstanding loan amount.

Homeowner revolving credit

Homeowner revolving credit

As a homeowner, you borrow a higher loan amount at an attractive low interest rate because a owner- occupied home offers extra security to the lender. Here too, in the case of a residual debt financing, you as the owner have a tax advantage provided that the loan is taken out before 1 January 2018. With other loan objectives you will not receive a tax benefit.

What does a credit cost?

What does a credit cost?

What costs do you have to pay for a Standing Credit? The amount of the costs, your monthly amount, depends on the amount of your credit limit. The monthly charges consist of a part interest and a part repayment. You pay the variable interest on the outstanding balance. The rest of your monthly amount is repayment. With a Continuous Credit you can choose a monthly installment of 1 to 2% of the credit limit. The amount of interest and repayment together form your monthly amount.

Our interest rates are low and our conditions are favorable. You borrow money cheaper if you are married, both have a steady job, have children, have a house for sale and do not have a negative BKR registration. Calculate which interest rate we can offer you.

Borrow money more cheaply

Borrow money more cheaply

  • Transfer an expensive Continuous Credit to a new Continuous Credit

Do you have a Continuous Credit with another lender at high interest rates and unfavorable conditions? You can transfer the credit to us free of charge. We convert your current credit free of charge into a new credit with a low interest rate and on favorable terms.

  • Convert personal loan to revolving credit

In the case of a Personal Loan you have no flexible management of your loan. Have you taken out a loan for your car, but is it due for major maintenance? Transfer your Personal Loan to a Continuous Credit, so that you can pay the costs of the extra expenses.

  • Aggregate loans or credits

Do you have multiple loans and / or credits? Combine them into one Continuous Credit, so that you have an overview and pay a lower interest. The interest for a low loan amount is usually higher than the interest for a higher amount. Merging loans is free of charge.

Better loans for the unemployed

Finding and getting an unemployment loan can be a difficult proposition for those who are unemployed or have very little income. Life is not free and it is not easy. Providing you or your family with the basics of our society can be a financial burden when things turn around in an emergency.

Sometimes we just need a little more money to get back on track, but the problem is finding a suitable lender. Let’s look at loans for the unemployed and how to get different types of jobless loans before applying.

Common problems for unemployed people looking for loans

Common problems for unemployed people looking for loans

Under normal circumstances (that is, when employed), the process of obtaining a loan from a source of financing is more or less simple.

The person in question decides how much to borrow, how much disposable income he or she can use to pay interest and principal, how to find a suitable source of finance, and how to get the loan.

This process is easy for those who are already working because one of the first factors that credit institutions consider in deciding whether and how much to lend to a person is their ability to repay the loan.

By definition, unemployed people with no income can obviously be a huge red flag for most traditional lending sources.

The situation then becomes a catch-22: The unemployed person needs an income in order to qualify for a loan to overcome financial difficulties and find work or start a business. However, without a job or business offering this income, it will be very difficult for him to obtain this loan. It is a difficult situation.

In many cases, those who apply for such loans may seek an emergency loan in order to:

  • Repair or buy a car for transportation.
  • Purchase clothing or equipment that may be needed at work.
  • Pay for studies that will help them improve their skills and get a job.
  • Pay rent and utilities so that their living situation is stable enough to allow them to find and keep a job.
  • Money for Christmas

These problems, although different, all follow a common theme: the unemployed often need financial resources to find ways out of relative poverty and re-enter the labor market.

Different types of loans for the unemployed

Different types of loans for the unemployed

Fortunately for those struggling in situations such as those described above, there is indeed a wealth of resources to help them put their lives back in order on time.

1. Loans to those receiving unemployment insurance payments

If the person in question has lost his job without fault on his part, in most cases he will be eligible to receive unemployment insurance benefits from the state in which he lives. The amount that is given to individuals varies from state to state, but generally represents a decent percentage of their former salary.

In many cases this amount will not be enough to cover all household expenses. The good news is that many credit institutions view UI as income and, if the person applying for the loan has a poor credit history, many credit institutions will make a loan available to them. individual in question.

It may not be huge, but it’s just enough to help the person overcome the barriers that unemployment can create.

2. Loans secured by real estate or other

Many modern credit institutions are more than willing to provide credit even if the person applying for the loan does not receive any income. As long as it can provide some form of collateral, these lenders frequently provide loans to the unemployed.

In most cases, the amount of credit granted will be proportional to the value of the property provided as security.

For example, a person seeking to take advantage of a portion of the equity in their home will generally be able to borrow more than someone who uses their motorcycle or car as a source of collateral.

Another similar method is to obtain a loan using accumulated life insurance funds as a source of collateral. In most cases, once the loan is repaid, the credit worthiness of the person is restored.

People looking to use their property as collateral in this way should carefully consider the situation before embarking on it. If they end up defaulting on some of their payments, their home or property is usually subject to requests for assistance, which may ultimately result in loss of ownership.

Therefore, it is important to count the cost of the loan before proceeding.

3. Use of co-signatories

If the unemployed person has family or close friends who have good credit, credit institutions are generally more willing to extend a line of credit if they are willing to co-sign the loan application.

This can be a big lifeline, but borrowers need to make sure they will be able to repay their loan on time. Otherwise, the co-signer will become responsible for the outstanding balance, which can obviously lead to financial difficulties for friends or relatives.

4. Use credit cards

Credit cards sometimes have high interest rates, but in an emergency, they can save your life. They can be used as emergency loans for the unemployed. If the person needs money quickly to make ends meet or to facilitate the creation of a new job, this option should not be overlooked.

Cash loans for the unemployed, in the form of a cash advance on credit cards, are also a good idea, but need to be carefully considered.

If this option is chosen, borrowers should be fully aware of the company’s credit card requirements for fine print. They need to know when payments are due, what the minimum payments will be and what the penalties are for late payment.

Being armed with this type of knowledge can help them further damage their credit ratings, thus preserving their credit history for the future.

5. Retraining loans

In some circumstances, many state and federal governments offer recycling loans to those who are entitled to them. For example, according to the Opportunity.gov website, the US government is prepared to extend loans of up to $ 5,500 to Pell Grant for job retraining purposes to people receiving unemployment benefits.

In addition, many states and municipalities will also provide recycling funds. Once added together, the amounts can be quite large.

6. Micro lenders

Usually, big banks have little interest in lending money to those at the bottom of the income ladder or those with bad credit. The unemployed fall into this category.

In response to this, many non-profit organizations have been created with the express purpose of providing small, interest-free loans to people in need of financial assistance.

How micro-credit works:

These types of loans are called microcredit because their amount is usually much smaller than the one banks offer to people. In many cases, loans of this type are in the range of 250 euros at low prices to about 5,000 euros at high rates.

Micro loans up to 50 000 euros are not unknown. Getting a loan of € 3,000, if invested wisely, can help a person to completely change his life.

How can you get one of those incredible micro loans? The process is quite simple. The US Small Business Administration, or SBA, provides microcredit to small business owners. This is a good thing overall but as in most bureaucracies; the process can be painfully slow and impersonal.

What would be a better option? There are quite a few micro-loan sites between individuals, one of the best known being Dubal. The process could not be simpler or more user-friendly. Dubal has two types of users, borrowers and lenders.

The person applying for the loan, the borrower, creates a self-identifying profile, their financial situation and the amount of the loan they are looking for.

At this point, one of the many lenders affiliated with Dubal consults lists of borrowers, chooses one to sponsor and voila! A loan is granted and repayment terms are generally quite generous.

What is the best loan for the unemployed?

What is the best loan for the unemployed?

Payday loans and fast term loans are unlikely to be a solution because of their interest rates and high fees. However, if you need someone to approve a loan for you, this could be an option in an emergency.

It all depends on each person’s situation and the resources available in their area. In most cases, the unemployed should focus on easy-to-manage sources of funding that require little or no paperwork, do not require solvency or revenue verification, and have good repayment terms..

Borrow money quickly?

If you can get money from one of the lenders, it is partly up to you how quickly this goes. If you get started immediately with requesting quotes in more than one location, you will also get clarity more quickly if you can borrow money quickly or if you can take out your loans. If you do this you will also find out why this is possible or not. The reason why this may not work does not always have to be a bkr registration if you have one.

It is important that you can show what your situation is at the moment and why you think you can repay the money to borrow in the future. It may therefore be important that you get clarity about your financial situation by placing everything in a personal loan or revolving credit with a lender. Because you do this you can also discuss the terms of the loan.

You must not forget that the lender makes a profit by giving you a loan, they would like to give you a loan, but they do want to be sure that they will see their money back. By being clear about the situation and communicating clearly you increase the chances of more money in your account at the moment.

View the possibilities for you to borrow money quickly

View the possibilities for you to borrow money quickly

Borrowing money with bkr registration is possible in several ways and we will discuss it here now. You can still borrow money from banks and lenders that are not affiliated with the credit registration agency in Tiel.

Credit providers who are not affiliated with this agency cannot see or request your BKR registration. This means that you can borrow money in the form of a revolving credit or a personal loan without any problems. If you want to withdraw money and repay whenever you want, borrowing with bkr via the revolving credit is a possibility.

If you prefer to have the total loan amount in your account in 1 go and pay off a fixed amount per month, the personal loan is an option for you. There are several options for borrowing money with BKR