The different forms of financing explained

 

The revolving credit.

The revolving credit.

What is a revolving credit? How can I take out ongoing credit? You will find information here about what a revolving credit entails. A revolving credit is a flexible credit that can serve as a financial reserve at all times. You can indicate up to a maximum amount of revolving credit with a lender. Within this amount you always have the option to withdraw money if you are in the red. As soon as you receive money again, you can repay the revolving credit completely debt-free at the desired moment. The revolving credit calculated per month which part of the credit you used and the associated interest rate and amount. If you take out a revolving credit, you no longer have to take out a small loan for each amount below zero, usually at the end of the month. A simple solution for a small advance.

Pay interest on revolving credit.

It is often possible to only pay interest on your revolving credit. The theoretical duration is not easy to determine. The monthly installments can often be limited to a few percent of the credit limit. For example, if you borrow € 3,000 in the form of a revolving credit with a monthly installment of 2.5% of the limit, you pay a fixed sum of € 75 per month in interest and repayment. The interest part is determined by the average actual balance of the past four weeks. The repayment portion is the difference between the monthly installment and the interest amount charged. The theoretical term of the revolving credit depends, among other things, on the interest rate and options selected for your credit.

Characteristics of a revolving credit.

General characteristics of a revolving credit. You agree on a credit limit for which you pay a fixed percentage per month in repayment and interest. The interest rate of a revolving credit is variable. The monthly charges often vary based on options chosen when taking out a revolving credit.

Advantages of a revolving credit.

Borrow money easily without concluding a new loan contract every time. Only pay interest on the amount withdrawn. The interest on your credit is often low compared to other forms of borrowing. You can easily withdraw repaid money. You may redeem money in the meantime (without penalty)

Transfer current credit

If you already have a money loan, it may be useful to take out a revolving credit. You often have different statements, which are then arranged in one orderly manner.

Take out additional credit with a revolving credit

If you need more money than your current revolving credit limit, you can choose to increase the limit. However, you must take your financial situation into account. Only increase your limit if you can handle it financially! Part of the increased credit will be used for the repayment of the previous credit.

The personal loan?

The personal loan?

What is a personal loan and how can I take out a personal loan? The personal loan is an easy way to borrow money and has some of the same features as a revolving credit. You often borrow with a personal loan at lower interest rates than with most other forms of loan. Borrowing money for a car, nice kitchen or car is usually done with a personal loan.

Characteristics of a personal opinion.

Payment is made in installments with a fixed term and interest. Ideal for smaller amounts, think of a few thousand euros. Lower interest costs compared to other forms of loan.

Disadvantages of a personal loan.

More expensive than a mortgage, because there is no collateral. Low interest rates can turn out higher in difficult times for the financial market.
Interim repayment usually leads to a fine.

Benefits of a personal loan.

Interest rates generally low compared to most other loan forms. A lot of competition between personal loan providers ensures a lower cost price.

The private loan?

The private loan?

What is a private loan and how do I take out a private loan? Information about private loans. With a private loan, there is direct contact between the borrower and the lender. The various parties make agreements themselves before the agreement is signed.

Private borrowing.

A private loan does not have to be registered in public registers. Both parties determine the conditions together.

Private loan from a well-known friend / family

You can agree a private loan with a friend. The advantage of private loans is that you can agree on favorable interest. You can also make specific agreements about repayments and payment terms. Acquaintances are more willing to provide you with a loan than the bank. In addition, many people use a private loan as an advance on an inheritance or estate or a gift.

Make a contract.

When you take out a private loan, always make a contract. You will not be the first to see friendships break through a private loan. Record the agreements made clearly so that you and your lender know where they stand.

Finally.

Enough reason to opt for a private loan. If you still have doubts about the loan form to be chosen, then take a look at our other articles regarding. Loan forms.

Lease.

Lease.

Leasing is used for real estate, equipment and consumer goods. A lease contract is often concluded for cars in particular. When leasing, there is a lease (purchase) agreement in which the lessor (owner) makes an item available to the lessee (lessee) for a certain period of time. The lessee pays a fixed amount to the lessor for this.

There are three types of lease: operational lease, financial lease and sale and lease back.

There are three types of lease: operational lease, financial lease and sale and lease back.

Financial lease.

The duration of a financial lease is generally as long as the economic life of the object. The economic risk lies with the lessee (lessee). At the end of the economic life of the property, the lessee has the obligation to pay the book value to become the legal owner.

Operational lease.

The lessee does not include the case on its balance sheet. This form is most similar to just “renting”. The lessee can cancel the agreement at any time. The economic risk of an operational lease lies with the lessor (lessor).

Sale and lease back.

Literally “sell and rent again”. In other words, the lessor (lessor) first sells the property to the lessee (lessee) and then leases the property back. The lessor then becomes the lessee. In this way, the lessee (ie the user of the object) can free up capital for other things because he leases his own things.

Advantages and disadvantages of leasing.

For private individuals, a personal loan or revolving credit is usually more beneficial than a lease contract. However, companies can enjoy a tax advantage through lease contracts.

A mortgage.

A mortgage.

What is a mortgage anyway? A mortgage is a loan in which a building, usually a house, serves as collateral. If you cannot meet the repayment sum, the lender has the right to sell your collateral, or house. Usually this is done with a forced sale, which means that a considerably lower amount is paid than the house would actually have been worth. A mortgage consists of three steps: borrowing money, insurance cover, repayment or capital accumulation.

Borrow money from a mortgage.

You pay interest on the loan amount. The amount depends on the type of mortgage and the conditions that you have agreed. The interest is variable depending on the economic situation.

Build up redemption or capital.

You can repay the mortgage by fixed repayment terms or by building up assets. The capital can be built up through investments and saving interest.

Insurance coverage.

You can take out insurance for disability, death and unemployment. If you have to deal with one of those things you will not get into debt because of the mortgage.

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