MonthFebruary 2020

Framework credit, the extended overdraft facility?

Framework credit, also known as call credit at some institutions, has become a popular form of additional liquidity. Unlike a normal loan, it is not a one-off sum that is constantly being repaid, but the permanent availability of additional capital. Some people already see the credit line as an alternative to the normal overdraft facility. But is that also true?

How does the credit line work for the customer?

How does the credit line work for the customer?

Anyone opting for a credit line will discuss a fixed framework with the executing bank

the line of credit from which this type of loan gets its name. For example, it could be agreed that an additional 5000 USD will be permanently available. What makes the loan special is the fact that the loan can be used again and again. If around 2500 USD of the 5000 USD have already been repaid, the customer could have the remaining amount. He is only obliged to pay the interest. The differences between the providers are important: While some banks prescribe a fixed monthly repayment of the framework loan, there are also providers who only request payment of the interest.

Special repayments are then used here, which have also become a standard for the other form of loan. The differences in interest rates are also interesting. If the overdraft facility is usually between 12 and 17 percent, a credit line can be obtained with interest between 6 and 9 percent. It is therefore an interesting alternative for customers with good credit ratings. And: The overdraft facility is linked to an account with a bank, the framework credit can be requested independently from any other institution.

The search for the right credit line

The search for the right credit line

The credit line is far from being available from every bank. Gradually, however, these are added to the portfolio, which makes the search a little more difficult. It should also be noted that the exact terms and conditions for the loan can vary considerably. If you are looking for this type of loan, you should take a look at our framework loan comparison. This makes it possible to compare the different providers and financial institutions with regard to the conditions and to choose the offer that best meets your own requirements.

The framework credit has already become an interesting alternative to overdrafts due to its flexibility and lower interest charges. If you are planning a debt restructuring or want to have financial freedom, you should consider the possibilities in this area.

How much credit do I get with 1500 net?

 

You are planning a larger purchase, a car or a kitchen equipment, or you just want to go on a larger holiday trip. Your project cannot be realized or can not be fully realized with your own resources. Therefore, before you commit, you want to know if there is a chance to fund your wish with a loan.

You are earning $ 1,500 net per month and now you want to find out what is the maximum loan amount that the banks will grant you with this salary.

The maximum loan amount cannot be predicted exactly with a net salary of 1,500 USD. The guidelines according to which a credit institution carries out credit checks are not uniformly defined and remain the secret of every bank.

Determine freely disposable income

Determine freely disposable income

How much money can you spare each month to pay the loan installment? This is the first question that you have to answer for yourself first.

For this purpose, all income and all expenses of a year are compared. You divide the difference by twelve months.

First, about the income:

All regular income belongs here, not just your net salary. Rental income, income from capital assets or income from regular secondary employment can also be added.

Some banks also accept social benefits such as child benefit in addition to their salary.

On the other hand, income that is largely uncertain is not recognized. Examples are performance-related bonuses or commissions that are not based on contractual obligations, but are voluntarily given by the employer.

Important: The income of all people who sign the loan application is taken into account. As a rule, the co-signer also becomes a borrower and not just a guarantor, as is sometimes mistakenly read.

If you are married and your spouse also earns, for example 1200 USD net per month, this income must also be taken into account, but only if the spouse additionally signs the loan agreement.

Note: The spouse is never obliged to sign a loan agreement.

In some cases, co-signing does not make sense because the signer’s salary is sufficient and therefore the spouse does not have to debit his credit score.

In other cases, co-signing can be sensible, otherwise the income will not be sufficient to obtain the desired loan.

Many direct banks expect another person as a borrower to sign the loan agreement if the loan amount is USD 10,000 or more. Every now and then it is even required that the second signatory lives in the same household.

Since you earn around 1500 USD, we assume an annual salary of 18,000 USD.

Calculate expenses:

Expenditures include the cost of living such as groceries, clothing, insurance, household supplies, car costs, and hobbies and vacation expenses.

In addition, there are the costs of financing your apartment (rent, additional costs or loan installment for a land charge). If there are other liabilities such as maintenance obligations, these must also be taken into account.

If the costs come to around 15,000 USD per year, the remaining amount is 3,000 USD for the loan installments. That’s 250 USD a month.

To make your work easier and don’t forget anything, you can use a household calculator from the Internet.

Many banks are not interested in the exact specification of expenditure. You work with lump sums that can vary slightly from bank to bank.

For the first person in a household, for example, 600 USD to 800 USD are used. For each additional person, 200 to 300 USD are added.

Let us assume that you are married, but that there are no children yet. Taking into account the household flat rate and rental costs, for the sake of simplicity, 250 USD per month should also be available for the loan installment.

According to the household bill, 250 USD per month are available for the loan installment. The next question is whether it is actually disposable income.

Income is only freely available if it is also subject to attachment. You can clarify this question using the following screenshot of the attachment table (as of August 2019).

With a net salary of 1500 USD per month, an amount of 224.99 USD is attachable, provided there is no other person subject to maintenance.

Only at 1630 USD net per month is a small garnishment-free amount of 3.92 USD available if a person is subject to maintenance.

You will therefore hardly get a loan worth mentioning if you are the sole wage earner and have a family at 1,500 USD.

Installment loans for consumption purposes are automated credit products, for which the assignment of wages is usually the only security. If nothing can be attached or assigned, this security is not applicable.

In the further course of our considerations, we assume that you have no maintenance obligations with a net wage of 1500 USD.

Under this condition, the amount we have assumed in the amount of USD 250 is freely disposable income and can be used for the credit installment.

How much credit do I get with 1500 net?

How much credit do I get with 1500 net?

In order to calculate the possible loan amounts, we assume the loan rate that you can afford. According to the above calculation, this is 250 USD per month.

The possible arithmetical loan amount depends on two factors: the term and the effective annual interest.

With regard to the effective annual interest rates, we ignore the interest rates given by the banks in advertisements, comparative calculators or on their websites.

Rather, we use the statistics on the average interest rates of the Agree bank.

The following interest rates result from the current survey: For loans with a term of one year to five years, the average interest rate is approximately 4.60% effective. For longer terms over five years, the average interest rate is approximately 6.79%.

Such a table is easy to create with the computers from Lite lender. You only have to enter the data you want into the computer.

As you can see from the example table, the loan amount depends on the choice of term. The longer the term, the more credit is mathematically possible. However, the loan costs increase as the term increases.

Credit check by the bank

Credit check by the bank

The calculations we propose give you an overview of your economic performance and the possible loan amount for a specific term.

You can now make an inquiry with a realistic loan amount. If you choose a loan term of 60 months, a loan amount between 10,000 USD and 15,000 USD is realistic

The actually possible loan amount and the associated interest conditions and terms depend solely on the individual credit check of the bank.

Many banks estimate in advance what the maximum loan amount can be, taking into account your net income of 1,500 USD. Mostly 10 to 15 times the net salary is accepted.

Under no circumstances will you get more than around 20,000 USD with a net salary of 1,500 USD.

After the bank has assessed the possible credit limit, it will carry out an exact credit check.

Your score, as determined by credit bureaus, plays a role here, as does the economic performance ascertained in accordance with the guidelines of the bank.

The bank will also take your personal circumstances into account.

This includes marital status and job. For example, civil servants and civil servants, as well as workers in crisis-proof industries, have the best chance of high loan amounts.

The longer the term, the more closely the bank will check your credit rating. The statistical credit risk for the bank increases as the term increases.

Do you get a loan without Credi bureau with a net income of 1500 USD?

According to the guidelines of the lending Cream bank, a Credi bureau-free loan of 3500 USD is possible if you have no children and are subject to tax classes 1, 2, 4 or six.

Financial check loan comparison

Financial check loan comparison

Enter the desired term and the realistic loan amount based on your calculations. Don’t forget to indicate the purpose.

If your credit rating is good, the loan amount can even exceed your estimate because the annual percentage rates remain below average interest rates.

Finance check offers a free advisory hotline. With a net wage of 1500 USD per month, you should make use of it before filling out an application form.

Finance check will surely be able to help you, which loan amount is realistic in your specific case.

You can also determine the service quality of the financial service provider in this way.

With a click on “Compare now” you get to the offer. You just have to fill out a form. Finance check will then automatically offer you the best loan offer.

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