Prevent residual debt by borrowing money

The number of houses underwater is falling. Yet 32% of the 4.3 million people who own home still run the risk of being left with a residual debt if they were to sell their home now. has more notes

Among homeowners younger than 35, no less than 75% have the problem that their mortgage costs more than their home are worth.

Worries due to residual debt

Worries due to residual debt

These younger homeowners bought their homes before or during the crisis. Even if you do not have immediate relocation plans, the potential risk of residual debt can cause you sleepless nights. Certainly, if you have taken out a mortgage on the basis of more than 100% of the foreclosure value of your home.

Save money by paying off your mortgage

Paying off your extra mortgage may then be a good idea. Not only for your peace of mind, but it can also save you money.

Different risk classes apply to mortgages. Is your mortgage in the class above 100% foreclosure value? Then you pay an interest surcharge. In some cases, this increases your interest by 0.3%. With a mortgage of $ 200,000, that means $ 600 extra interest per year.

Example of borrowing money for a mortgage


Some time ago I met Good Finance. In 2009 they bought their current home for $ 240,000. For this they took out a mortgage of $ 250,000, interest 5.4% fixed for ten years. They recently received a new assessment for the WOZ tax from the municipality with a WOZ value of $ 235,000.

Borrowing advice for a mortgage

Banks have been relying on market value since 2013 to determine the risk of a mortgage. 100% of the foreclosure value corresponds to approximately 90% of the market value. With the WOZ value as a starting point, this means 90% of $ 235,000 = $ 211,500.

My advice to this couple: take out a loan of $ 38,500. If they repay their mortgage with this, they will be placed in a lower risk class. That means a saving of 0.3% risk surcharge over the entire mortgage.

Take out a loan and save

Take out a loan and save

You can already take out a loan of $ 38,500 at an interest rate of 4.1%. This provides the following savings:

Old situation
Interest rate mortgage: $ 250,000 x 5.4% = $ 13,500 = $ 1,125 per month

New situation
Interest rate mortgage: $ 211,500 x 5.2% = $ 10,998 = $ 916.50 per month
Interest loan: $ 38,500 x 4.1% = $ 1,578.50 = $ 131.50 per month
Total interest charges per month: $ 1,048 per month

That means a saving of $ 924 per year. An amount that you can do many fun things with. But Good Finance mainly sleeps a lot better. Also because transferring a mortgage in a lower risk category is much easier. They may, therefore, save even more!

Take out personal loan advice

Of course, we make this calculation just as easy for you. Contact one of our Valmont specialists and discover how much you can save with taking out a loan.

Debt increases. Moldovans borrowed from the financial sector

The indebtedness of households in 2018 reached the level of 9.2% of GDP, and in 2019 it will approach 11% of GDP, which is 5 times more than 15 years ago, writes in his blog IDIS Viitorul economist, Veaceslav Ioniță.

However, the indebtedness of Moldovan households is 6 times lower than the European average and almost 2 times lower than the average of the countries in the region.

The basic customer of the entire financial sector

The basic customer of the entire financial sector

In fact, after the 2014 crisis, individuals became the basic customer of the entire financial sector and this trend will continue in the coming years.

As a consequence, the degree of indebtedness of households will grow closer to the regional average and most likely this year or maximum in 2-3 years, the portfolio of loans offered to individuals will exceed the credits offered to legal entities.

Households contract loans for:

  • Consumption;
  • mortgage;
  • Leasing for the purchase of cars;
  • Loans for starting a business.

According to the aggregate data from the National Bank, the National Commission of the Financial Market and the National Bureau of Statistics, in 2018 households have borrowed about 4.8 billion lei, which is four times more than the average of the last years.

After 2014, when banks significantly reduced their lending to economic agents, individuals became the preferred client of both the non-banking and banking sectors.

As a consequence, if by 2014 the lending to the natural persons by the financial institutions constituted 15% of the total loans granted, the rest being returned to the legal persons. Then, in 2018, the share of individuals rose to 40% of the entire loan portfolio.

The main creditor of the Households remains the banking sector

The main creditor of the Households remains the banking sector

With a 53.8% share, followed by the MicroFinance Companies which hold a 36% share. The microfinance sector has considerably increased the lending portfolio of individuals in the last 5 years, from 1.4 billion lei in 2013 and a 20% market share to 6.7 billion lei in 2018 and a market share of 36%.

As a result, microfinance companies in this period won the battle in first of the banking sector, even though it increased its loan portfolio from USD 4.9 billion in 2013 to USD 10 billion in 2018, yet its market share has decreased by from 69% in 2013 to 53.7% in 2018.

For 2019-2020 we anticipate the following developments

For 2019-2020 we anticipate the following developments

  • The loan portfolio offered to individuals will increase significantly, with a minimum of 4.5-6 billion lei annually. This will have two major consequences: a) The degree of indebtedness of the Households will increase 1.5-2 percentage points annually, which means reaching the level of 15% of GDP in the next 3-4 years, a level comparable to the regional average, b) The loan portfolio offered to natural persons in 1-2 years will exceed that offered to legal persons.
  • Most likely in 1-2 years, the non-Banking sector will outperform the banking sector in lending to individuals.
  • In order to maintain market share and attract individuals, banks will develop various attractive banking products for individuals, especially in the field of consumer loans and mortgages.

Certainly, Moldova is actively involved in the era of consumption based on financial loans, and financial institutions must accelerate the launch of its products on the market, in order not to lose market share that will grow strongly in the coming years.

Best Credit Cards for Students – Credit Cards for Students

When you are a student there is often a need to shop online and then the need for a credit card can sign up. There are many cards available for students, but where to apply depends largely on the age limits of the different cards.

What will be the best card for a student will vary from student to student. No one has the exact same need and this will be decisive for what becomes the best card. The smartest thing to do is to sit down and manage a monthly budget, when you have this clear you can use this to see what credit limit you will be able to cope on a monthly basis and you will also be able to use the budget to compare with the different cards discount deals to see where you can use the card to save money or get cashback when shopping.


Credit card overview for students

Credit card overview for students

We have an overview that you can use to compare the different cards against each other and your own budget. Here you will find information on effective interest rates and other terms and conditions and benefits of each card. You also have references to all your credit cards so it’s easy to click in, if you want more detailed information about something.

It is very easy to submit an application for a credit card, the application itself is filled in a few minutes and contains basic information such as personal number, social security number, e-mail address and the desired credit amount, this information is sent in and when companies receive an application then are made It a check by you to make sure they have no payment notes or other negative financial information.

After the credit assessment, you get a quick reply by email whether you can get cards through this company or not.


Your age affects the number of opportunities

credit cards

As mentioned initially, all the different card companies have different age limits, but from the age of 18 it is quite possible to find good cards with attractive advantages. Then the older you are the more opportunities open up.

A good tip if you are younger is to apply for a low credit limit when you apply, then it is easier to get a credit card and you have the opportunity to show over time that you are a good payer and later it will be easier to increase the limit.

Loans for pensioners with assignment of the fifth, how it works

The transfer of a fifth of the pension is the typical pensioner loan, usually INPS, granted by financial companies on more advantageous terms than other personal loan solutions.

Loans for pensioners are loans designed and granted specifically to those who enjoy a retirement pension (read pensions excluded from the assignment of a fifth).

These are types of loans that can be easily granted to both private and public pensioners, with great advantages and decidedly affordable interest rates.

Loans to pensioners through the assignment of the fifth: characteristics

Loans to pensioners through the assignment of the fifth: characteristics


  • It is a loan that is granted to those who have a retirement pension granted by INPS;
  • To be able to request it, you must usually be up to 75 years old (but there are exceptions, we talk more about it below);
  • It’s a non-finalized loan, so you don’t have to say why you need the loan;
  • You can use the money both for yourself and help a son or grandson;
  • It can also be requested if there are other loans already in progress;
  • Bad payers and protests can also request it.

Loans to retirees, how it works

  • the applicant applies for funding to one of the best financial agencies or banks;
  • from the moment the application is accepted, you will receive the money in your bank or postal account;
  • the reimbursement of the sum takes place by withholding the installment from the net pension



Age restrictions

When it comes to the transfer of a fifth of the pension, one of the major limits that could be encountered is that of the age of the pensioner.

Usually, the maximum limit is 75 years not completed at the time of the payment of the last installment, but since the law does not provide for anything on the matter, the financial companies can safely grant loans even to older people. In this case, we speak of loans for pensioners up to 80 years or up to 90 years.

Loans to pensioners over 80 years

For those with up to 80 or more, there are still possibilities of requesting funding.

The 80 years must not be completed on the day of payment of the last installment of the loan. Since the risks to the financial sector may be higher, higher interest usually applies.

These loans to pensioners over eighty are also covered (which, however, happens with all financing solutions, by an insurance that has the purpose both to protect the financial granting the loan, and to give protection to the debtor’s family in the unfortunate event that he fails and the loan has not yet been repaid 100%.

Loans to pensioners up to 90 years

In this case, the maximum age of the applicant can be 90 years at the time of payment of the last installment of the loan. Due to the high degree of risk, not many financial companies grant this loan.

Maximum amount

Let’s say there is no maximum amount that I can apply for as senior citizens loans.

Much depends on the monthly payment that you can afford to pay. The calculation of the same is very simple and fast and must be done considering the minimum pension, which at the time of writing is $ 501.98 per month for 2019).

Installment calculation

  • Gross monthly pension: $ 502.98
  • Withholding tax: 0 $
  • Net pension: $ 502.98
  • Minimum statutory pension: $ 501.98
  • Transferable share: $ 1 (given by the difference between the net pension and the minimum pension)

Here is also another example of calculating the installment:

  • Gross monthly pension: $ 1,500.00
  • Withholding tax: $ 375
  • Net pension: $ 1,150.00
  • Minimum statutory pension: $ 501.98
  • Transferable share: $ 648.02 (given by the difference between the net pension and the minimum pension) 

As can be seen, the minimum pension is always safeguarded and cannot be affected in any way.

Read also our specific text on how to calculate the transferable share for the transfer of a fifth of the pension.

Also keep in mind that the installment includes all ancillary costs, life, and employment risk insurance costs, as well as the principal and interest portions.

Guarantees and necessary documents

Usually, there is no need to provide any additional guarantee in order to have access to this type of financing, given that the pension slip and the transferability notice are sufficient, or a document issued by the local office of your INPS in which the maximum amount can pay as a monthly installment.

Who can apply for loans for retirees?

Who can apply for loans for retirees?

Here is one of the most interesting questions that retirees usually ask and ask themselves. Let’s say that, in general, all INPS and ex-INPDAP pensioners can apply for loans for pensioners with the assignment of the fifth, whether they are ex-employees, private, public or ministerial.

Instead, the following forms of pension or checks are excluded:

  • civil disability pensions
  • pensions for banking staff
  • pensions and social allowances
  • income support allowances
  • monthly allowances to assist retirees due to incapacity
  • family allowances

Loans to civilian disabled pensioners

When we talk about disabled pensioners we say that, usually, the condition of invalidity in itself does not allow access to the loan for “classic” pensioners.

This does not mean that disabled civilian pensioners cannot access a loan as long as the pension allows repaying the installments. In this case, the disability pension must be considered as any other income.

Suppose a person has a civil disabled pension of 1,000? per month, can the monthly payment even go up to 300? – 400?, Depending on the other expenses you have around.

In this case, the maximum installment that can be paid depends on the bank and bank and is not subject to any statutory taxation (as is the case for the transfer of a fifth of the pension ).

For more information, read our article on subsidized loans for disabled civilians.

Reimbursement of the assignment of the fifth

Reimbursement of the assignment of the fifth

Usually, these loans are granted according to the method of transferring one-fifth of the pension. In practice, the monthly installment that is paid has a maximum amount equal to 1/5 of your net pension.

This installment is paid by your pension institution directly to the finance company so that you don’t need to remember anything.

With regard to the transfer of the pension, there is a limit imposed by Italian law on the minimum pension. Let’s see everything with an example, in order to clarify better.

The minimum pension that a pensioner must have every month is 501.98 dollars. Therefore, the amount of your net pension, less that of the installment of the assignment, cannot be less than this minimum amount.


Loan for renovation

People need a cozy and homely environment, here they feel particularly at home. You can blossom as a person in a pleasant and sensual atmosphere, where privacy and relaxation are no foreign words. All these moments and feelings are best experienced in your own four walls. It is therefore fundamental and important that you feel safe and comfortable in your home. A basic prerequisite for this is that the apartment or house is clean and furnished according to the wishes of the residents.

In dirty and in the worst case moldy apartments, a feeling of security can certainly not occur. In this respect, it is important that you keep your home in good shape and, if necessary, strive for renovation at regular intervals. When purchasing a corresponding property, it is often necessary to invest in a renovation before moving in. However, many people do not have the necessary financial means to afford to renovate a house or apartment.

The loan for a renovation as a solution to the problems

The loan for a renovation as a solution to the problems

But there is a very simple and sensible remedy for problems of this type – namely a loan for the renovation. Banks and credit institutions provide financial resources that can be used to renovate and remodel the apartment. It is completely irrelevant whether the floor is newly tiled, windows are sealed or the walls are cleaned of mold and moisture. With a loan for a renovation, however, you have to have certain collateral so that the bank grants it.

On the one hand, regular income, for example from work or pension, must be available, on the other hand, there must be no entry in the nationwide database. Job security is also an important criterion for granting a loan. Regular costs for insurance, telephone, electricity etc. are also checked. In general, this is called a credit check, which is carried out before a loan is granted. The essential framework conditions for a renovation loan are examined in more detail below.

Conditions and framework conditions for a loan for the renovation

Conditions and framework conditions for a loan for the renovation

In principle, the loan for the renovation can be equated with a classic installment loan. Here the desired amount of credit is made available to you in full, the maximum amount depending on the bank and credit security between 10,000 and 150,000 dollars. The loan is then repaid in monthly installments. The amount of the installments to be repaid is determined by the loan amount granted and the interest rate. Depending on the current market situation and credit institution, this is between 2.5 and 6 percent. A comparison of the different offers is worthwhile in any case, since the banks can usually offer different interest rates.

Some banks even allow special payments during the loan period. The maximum possible duration of the loan is 60 months (5 years). The loan amount will then be repaid within this period. With a loan for renovation, you can quickly and easily get financial resources to beautify your home. This gives you the opportunity to get your own four walls back in shape.

Debt consolidation: all in one installment

In past years, the relative ease of access to credit and the commercial simplicity with which some loans were offered (especially targeted loans and revolving credit cards) have contributed significantly to the over – indebtedness of people and families; indebtedness which most of the time seems to be linked to the shortness of the amortization periods of the loans and which implies an excessive accumulation of monthly installments.

The need therefore arises to have a single loan, consolidating those in progress, at advantageous rates and spread over the medium or long term, which allows extinguishing all open positions while maintaining a single monthly installment.


Debt consolidation allows you to reorganize all the existing loans

money loan

It is possible to incorporate, in fact, one or more contracts, signed both with the same bank or financial institution, and with different financial institutions, in order to pay off all loans in progress and pay in substance a single debt with a single installment per month.

The goal is to make the repayment of debts sustainable, simplifying the customer’s debt burden and thus remedying a monthly amount of expiring installments that can no longer be tolerated by a family or by an individual and which risks leading to one state of insolvency. We speak of a “refinancing” useful for those who have difficulty following the times or the refund amounts.

In addition to the obvious advantage of having to manage the payment of a single loan and dealing with a single lending institution, it benefits from the possibility of having a single reduced monthly installment which is again sustainable for the debtor; in fact, thanks to the lengthening of the repayment times of the debt, the overall amount of the installment to be paid periodically undergoes a significant reduction.


When Should You Really Apply for Debt Consolidation?

money loan

In order for the transaction to make sense, certain conditions must be met: the consolidation loan must be of medium or long duration, therefore from 8 years upwards and preferably with a rate similar to that of the loans to be closed.

Furthermore, the payables to be paid must be of short residual duration: it obviously would not make sense to pay off a debt with a residual duration of 9 or 10 years with another 10-year loan because the installment would not be reduced.


Debt Consolidation and Bad Payers: Can Everyone Really Claim It?

money loan

Although the debt consolidation solution is designed for those who find themselves in financial difficulty and need to rebalance their situation, based on their new economic needs, it is also important to consider that the consolidation loan is still a loan. Credit institutions therefore have the right to verify the creditworthiness of the applicant in order to assess the real capacity to cover the new refinancing.    

Often people think too late about the possibility of a debt consolidation when the situation is unsustainable and the first payment delays have already started. In these cases, the reporting of insolvency to the Credit Information System makes the granting of other credits very difficult.

It is true, however, that debt consolidation can also take the form of assignment of a fifth (as well as a loan for consolidation) and can also be obtained in the presence of any bad reports.

Each situation is obviously different and requires careful analysis and evaluation. Study the best practicable strategy and find the solution that best suits your case.StarSave Finance checks all databases in order to have a complete picture of your debt position and evaluating the necessary conditions to be able to intervene.

How does the mortgage bridge loan work?

One of the most important decisions that all people must make at some time in their lives, is to buy their own home. When buying a home, mortgage loans for land and house are an excellent option to take that first step of independence and get a mortgage and a personalized house. However, your needs may change over time and you need a bridge loan. Do you want to know what a bridge loan is? We tell you in this post.

What is a bridge loan?

What is a bridge loan?

A bridge loan is a mortgage loan through which a person who has acquired a home through a mortgage and still has part of it without paying the bank, can receive another mortgage loan to acquire another home without the need to sell in a hurry. that you acquired first.

In the case of applying for a second mortgage for a bridge loan, it is best to use a mortgage comparator. So you can directly find the mortgage that really suits your new needs and preferences .

Are you going to change houses?

Are you going to change houses?

Generally, the first house that is bought is usually one that suits the current needs of the owner, however, these needs may change over time, needing to buy another house that is larger, in another area or city. Many people often wonder what they should do, if they need to buy another house and still have a share of the self-promotion mortgage pending payment.

Given this situation, contrary to what most believe, it is not necessary to wait to sell the first house to obtain another , fortunately to solve these situations there is a mortgage bridge loan and then we mention everything you should know about this type of credit bridge.

How does the mortgage bridge loan work?

How does the mortgage bridge loan work?

The bridge loan is granted by the same bank to the person who already has a mortgage loan and wishes to receive another to buy a second home. In this way, the two loans are united into one.

However, in most cases until the first house has not been sold, the person will continue to cancel the mortgage payments of the first mortgage plus the interests of the second. Once the first house is sold, the person must pay the part owed on the first mortgage and start a new payment process for the second mortgage.

What is the time limit to sell the first home?

This will depend on the financial institution, usually giving up to 5 years for the person to sell the house. In case of not selling the property in the agreed time, the person must start paying fees for both mortgages. Many entities are flexible and establish fees that are comfortable to pay, since they have the assurance that being a bridge loan, the two properties are the guarantee of insolvency.

Debt restructuring for trainees

Education – usually means little money, but big wishes. The first own booth is set up and a used car is purchased. Tempting offers such as “pay later” or “0% financing” make buying easy. But young people in particular quickly lose the overview. The apartment wants to be heated, you have to pay electricity and water. The car needs petrol or diesel, and even if it doesn’t drive, it costs tax and insurance – and that is often very expensive for beginners.

Spending grows over your head

Spending grows over your head

If, in addition to the costs for housing and car, there are now credit installments or an expensive mobile phone contract, the disposable income that can be obtained from the short training allowance after taxes and social security contributions is quickly exceeded. Those who have to learn and work for their apprenticeship usually do not have the time to earn a little extra. A part-time job might jeopardize the educational goal, and you shouldn’t take that risk. If the refrigerator or the washing machine breaks now, a repair on the car is due, it looks really bleak on the account. It goes into the red, and that means new expenses for the high interest on the overdraft facility. And even that is used up at some point, the house bank will no longer grant you any further loans without collateral. If you are not careful now and keep a clear head, you will quickly find yourself in a bad debt trap that is difficult to get out of.

Debt restructuring – a way out of debt

Debt restructuring - a way out of debt

Debt restructuring is an important way of mastering the seemingly hopeless situation. Debt restructuring means that existing loans or other debts are transferred to new contracts without a reduction in the amount of the debt. Debt restructuring is therefore very different from private bankruptcy – this means a haircut that, although it allows a fresh start, is bought with serious restrictions on financial freedom. It doesn’t have to go that far.

Improve debt sustainability through lower interest rates and longer terms

Improve debt sustainability through lower interest rates and longer terms

But what does debt restructuring bring if the total debt is not changed at all? There are two main answers to this:

1. The interest charge is reduced. The overdraft facility on the checking account is very convenient, but disproportionately expensive. Despite a long period of low interest rates, banks and savings banks still charge an average of more than 10% annual interest. Anyone who exceeds their overdraft limit also pays a substantial overdraft commission.

Expressed in numbers: If your account is minus $ 1,000 and you have agreed on a 12% overdraft interest rate, you pay $ 10 each month just for the interest – provided that the interest does not increase your debts. Otherwise, the amount increases monthly due to the compound interest effect. You get an installment loan on average for half this interest, with some providers even under 4%. So that saves you at least $ 5 every month.

2. If this saving seems rather small, you should take a look at the effect of the extended loan term. Those who have to pay back borrowed money in a short time have high monthly installments. It is therefore important to extend the term and thereby reduce the rates. Especially in your situation as a trainee, a break in payment is also an option if the end of the apprenticeship is foreseeable and then a permanent position is due. Your great advantage is that your financial constraint is only temporary and the situation will probably improve significantly once you have completed your training.

Here is a calculation example, for the sake of simplicity, without taking interest into account: To set up your first apartment, you bought a kitchen and bedroom from a furniture store for $ 3,000 and agreed to finance it for 24 months, making a rate of $ 125 a month. In the electronics market, the flat-screen TV was so tempting at a price of $ 600 that you took it for $ 50 for 12 monthly installments. You now have $ 3,600 in debt and a monthly charge of $ 175 in the first year. Does that exceed your options? Sign a new loan agreement for $ 3,600 with a three-year, 36-month term. With this money, you pay for furniture and TV sets, and your monthly charge drops to $ 100 for the new loan. You have $ 75 more disposable income to live on.

Professional help from the debt advisor

Professional help from the debt advisor

Of course, things are not quite as simple as this sounds. You have to get a new loan first and you have to respect the notice periods of the existing obligations. Debt counseling pays off here, because there are professionals who can negotiate for you with creditors and banks at eye level. Serious debt counseling is available free of charge, for example, from large organizations such as Caritas, and the Forum Schuldnerberatung e. V. can give corresponding addresses.

A good debt counselor is not only familiar with loans and contracts, he can also psychologically understand the situation of the debtor. Although more than six million Germans are over-indebted – one in ten adults – the situation for the debtor is often characterized by uncertainty and shame. This is especially true if there are problems such as gambling addiction or alcoholism behind the overindebtedness. The following applies to you: Only if the advisor knows all aspects of your financial and personal situation can he effectively help you and bring about a debt relief. He is a professional, deals with indebted people every day and does not judge. Trust him and he can show you the way to a new financial start through debt restructuring.