120 month loan – Advantage and Disadvantages

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A loan with a term of 120 months is always associated with a very high risk for the customer and for the bank. Nobody knows what will happen during this time and whether the customer will still have the same income after a few years as was the case when borrowing. For this reason, most banks only grant loans that do not exceed a term of 84 months.

Advantages of a 120 month loan

Advantages of a 120 month loan

There can be many reasons why a customer is interested in taking out a 120-month loan. First and foremost, the fact that the monthly repayment rates are very low and that customers can also afford things that would otherwise exceed their financial possibilities are likely to play a role.

Disadvantages of a 120-month loan

Disadvantages of a 120-month loan

The low monthly repayment rates are usually offset by very high interest rates. In doing so, the bank wants to hedge against the default risk, which is higher the longer the
The remaining term of the loan is. For this reason, anyone who is interested in taking out a very long-term loan should make sure that the bank grants them the right to make unscheduled repayments or to repay the loan at any time. In this way, not only the monthly charge, but also the total loan amount can be significantly reduced, which would then also entail a significantly shorter term.

officials loans

officials loans

There are usually no problems with a loan with a term of 10 or even 20 years if the borrower is an official or a long-term employee in the public service. Under certain conditions, an official loan would also be possible here, which is characterized in particular by the fact that not only is a loan taken out, but also a life insurance policy is taken out. During the entire term, only the monthly premiums for life insurance and loan interest are payable. Repayment is made in one sum at the end of the term. Capital life insurance is used for this. The official does not have to make any additional personal contributions.

Apply for a personal loan with 3 children – This is how you get a loan

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The number of household members has an impact on creditworthiness, as the bank uses income and credit installments to check whether the applicant can repay the loan as agreed. In this check, which is also called the household bill, it also compares the disposable income with the number of people living in the household, since this has a direct impact on the monthly money requirement.

What does the number of children mean for taking out consumer credit?

What does the number of children mean for taking out consumer credit?

If a borrower takes out a loan with 3 children, the regular monthly household income must be sufficient to cover both the cost of living and the loan installments. Instead of a household bill tailored to the personal situation of each individual family, it is customary for banks to use fixed amounts per person, with most credit institutions making small deductions for children.

In contrast to possible additional earnings, the child benefit is regularly taken into account when checking personal creditworthiness. So it is not difficult to successfully apply for a loan with 3 children. If the bank believes that the income is not sufficient for the calculated loan installments, these can be reduced by choosing a longer loan term, so that the creditworthiness is rated positively.

Real estate loans are cheap with three children

Real estate loans are cheap with three children

In one area, a loan with 3 children can even be obtained particularly cheaply thanks to the politically desired support of large families. These are real estate loans. To enable families with many children to acquire home ownership, which, according to the current definition, couples with three children can acquire home ownership, they receive support from different agencies. In any case, the Kreditanstalt für Wiederaufbau grants subsidized development loans for the purchase of residential property by families with at least three children.

In addition, some federal states and cities have launched other programs for family support. Depending on the location, the construction office or the family office can provide information on the conditions applicable at the place of residence. The discounted construction loans not only serve to acquire or build new residential property, but can also be used for construction measures within an existing property. Applying for a cheap building loan for the attic or cellar extension is therefore a good idea, so that the children’s room can be set up for the third child.

Apply for personal loans

Apply for personal loans

For large families, it is advisable to take out a private loan. Appropriate loans are brokered on relevant websites between private lenders and private borrowers, with an approved bank taking care of the formal processing for legal and practical reasons. If loan seekers indicate that they want to take out a loan with 3 children, they will receive particularly favorable offers on request when they are above average. In contrast to a commercial bank, in the case of loans from private individuals, it is also customary to state the purpose of the loan for a consumer loan, since this information serves as a basis for deciding whether to participate in the lending.