Monthly Archives: February 2020

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

Features

bank

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.