It’s easy to fall into the debt trap

Anyone who has fallen into the debt trap knows only too well what that means. Unopened bills pile up on the table, money is already scarce at the beginning of the month, and often nothing goes to the middle. Then there are also reminder fees and interest.


Quick bargains here, free financing there

financial debt

It is actually very quick. We are bombarded with temptations from the consumer world every day. “Zero percent financing”, “Buy now – pay later”, “absolutely super cheap” – these are the keywords we hear in advertising. But in the end we still have to pay for all of that.

Thanks to a credit card and unbureaucratic financing, you can treat yourself to something. But then something unforeseen happens: the washing machine breaks, the car doesn’t start and has to be repaired, maybe a school trip, in which the children take part. And suddenly the account is overdrawn. Often they were forced to take out a loan.


Not everyone is to blame

debt trap

Some get into this situation through negligence because they may have lived above their means, but for others it is social circumstances such as illness, accident, sudden unemployment or separation. Suddenly the income is no longer enough and the mountains of debt become an absolute nightmare.

Young people are also increasingly affected. Companies lure with promising cell phone contracts, and suddenly the high costs can no longer be paid.

Studies have shown that a German private household is indebted on average with more than 8000 dollars, almost three million households are overindebted.

But it’s not just the weakest members of society who are caught in the debt trap and barely get out; in fact, many people who are actually better off are affected.
It is not easy to clear the mountain of debt once accumulated. Due to the sometimes high interest rate on the liabilities, the debt can hardly be reduced despite regular repayments.


There are ways out of the debt trap

In order not to register personal bankruptcy or to avoid foreclosures or garnishment, it is advisable to take advantage of free debt advice at an early stage. Because there you can get help and competent advice quickly and unbureaucratically. Because often those affected lose track of their total debts and no longer know how high they really are.

Refinance Consumer Debt – How To Go? – Consolidating loans

If you have ended up in a situation where you are having one or more expensive loans with very high interest rates, you may want to pool all the loans into one larger loan. High-interest loans with high interest rates can quickly become expensive and can lead to several payment remarks if you are unable to pay. By consolidating loans into one consumer loan, you will get a tidy customer relationship and probably a much lower interest rate and fewer fees than if you continue to let interest rates run, for example, on your credit card debt.


Consumption debt refinancing

debt refinancing

Loan refinancing may sound complicated, but fortunately it is not. Refinancing simply means replacing your existing debt with a new loan. The new loan should have better terms than you had on your existing debt, so you get lower interest expenses while getting a more tidy economy by pooling multiple small loans into one loan. If you convert your loans into a consumer loan with Penlet, you get a predictable repayment schedule of up to 15 years, and a rate that is significantly lower than the one you have on your credit card debt today. The monthly installments you pay cover both installments, fees and interest, and you have the option of requesting up to three payment-free months during the year, which is convenient for, for example, December and July. All types of loans and credit can basically be refinanced,


Requirements for refinancing

debt refinancing

The general requirements for applying for refinancing at Penlet are the same as when applying for an ordinary consumer loan with us: you must be over 23 years of age, a Norwegian citizen and have three years’ tax history. You also can’t have payment notes. When you apply for refinancing, you enter information on the loan amount, account number and repayment period on your existing loans, before the application for refinancing is signed.

After the application has been submitted, a credit check will be carried out. It is this that determines whether you will be granted the loan amount for refinancing. The processing time for refinancing is the same as applying for a consumer loan and in most cases you will receive a response within a few hours on business days.

At Penlet you can refinance loans up to 500,000, and it is Penlet that ensures that creditors get paid when the loan is granted. If you have payment notes or your small loans or credit card debt are about to be collected, you will not have your refinancing application approved.


Avoid credit card debt

Avoid credit card debt

Using the credit in your credit card as a loan, if you do not repay almost immediately, never pays off. The interest you receive on your credit card debt if you do not repay the amount you used within the deadline is very high. Therefore, if you are unsure whether you will be able to repay the extra money you need to borrow, you should consider taking out a consumer loan, which gives you both a lower interest rate and a longer-term repayment plan.


The road to a cleaner economy

The road to a cleaner economy

Not taking out several unsecured loans at one time, whether different loans or through one or more credit cards, is not recommended. You get many customer relationships with different lenders and it is more difficult to keep track of how much you owe in total. You may also be more easily tempted to spend more money than you can repay when you borrow from several different lenders. Interest rates on small loans and credit card debt are often very high, and if you end up in a situation where you are struggling to repay the debt on time, you run the risk of getting more debt collection and payment notes. therefore, is to always think through what you need money for and not to act on impulse when applying for a loan, no matter what kind of loan you end up applying for.

Acceptance loan – what is it?

The word acceptance credit describes the acceptance of a loan. This happens because a credit institution such as the bank or savings bank assumes liability for the liability of a bill of exchange for its customers. This is a bill of exchange acceptance as an unconditional, fixed payment instruction from the exhibitor to the drawee of the bill of exchange.

Credit rating

Credit rating

With its promise, the bank assumes full responsibility for the exchange of bills. The risk is that the bank account is also covered accordingly at the time of the change. The account holder is usually expected to cover the account at least one day before the change is due. If not, the booking is made anyway. Now the lender has a latent credit default risk until the account is settled. Against this background, the acceptance credit is largely a matter of trust between the bank and the account holder. Accordingly, it must have a good credit rating, which must be first-class in the long term.

In most cases, this is secured by other balances with the bank or within the network of the bank or savings bank in question. Even if the acceptance credit results in a temporary underbooking, there is other value-based coverage that is guaranteed.

Acceptance credit in foreign trade

Acceptance credit in foreign trade

In this form it is used both as a means of payment and as a loan; This is especially so because it can be cheaper for the customer, ie cheaper than an installment, a framework or even a overdraft facility on the company account. With an acceptance credit, the undoubtedly very good creditworthiness of the bank is transferred to the bill and thus to its redeemability. The bank takes the place of the account holder as the customer’s contractual partner. Today, this loan is used almost exclusively for import business in foreign trade. As a financial change in domestic business, however, it has lost importance.

A foreign business partner often cannot or cannot correctly assess the creditworthiness and reliability of his counterpart. This is particularly often the case with new business relationships. An acceptance credit, ie the acceptance of the relevant credit institution, eliminates such uncertainties and ensures security in payment transactions. The customer’s unknown or non-verifiable creditworthiness is suddenly upgraded by the acceptance credit. The payee is now on the safe side.

Loan Paid In 24 Hours

For urgent bills, urgently needed purchases or repairs, it can be advantageous if the requested loan is paid out in 24 hours. Since the waiting times at banks and credit institutions for approval are longer, you should rely on a quickly realizable and inexpensive instant loan from the Internet.

In the case of an instant loan, an unbureaucratic application is made online, which is promptly, usually in less than 24 hours, about the approval. But even in a great hurry, important criteria should not be neglected, so that an offer that does not meet personal requirements should be decided.

Unnecessary costs can be avoided

Unnecessary costs can be avoided

In order for a loan to be paid out in 24 hours, the decision for an instant loan is necessary. This can be found and applied for through a private credit broker or lender, but also through your own research on the Internet. In particular, personal loans have become established in recent years and are convincing thanks to their quick approval with low interest rates and fees.

Different portals bring private donors and prospective customers together for the personal loan and make it possible to find a donor directly in the portal, where the approved loan is paid out in 24 hours. Especially when there is a high level of urgency and haste is required, many people lose sight of important details that characterize a good loan and make it a cheap and optimally considered decision. Avoiding costs that are too high and choosing a low-interest loan is the key to satisfaction, even when making a quick decision.

Compare and check all factors

Compare and check all factors

Not only the interest, but also the contractual conditions determine the attractiveness and efficiency of a loan offer. If the loan is to be paid out in 24 hours and thus pay off a rushed invoice or make an acquisition possible, the borrower can still save and opt for an offer in which all personally important criteria are correct and make the loan a well-considered and affordable decision. If you are thinking about an earlier repayment and redemption of the loan amount and wish to be able to use a faster redemption if there is a financial possibility, you should make sure in the contract that this option is offered and is not subject to high fees.

If you only look at the interest, you can sign a contract that proves to be less flexible in the event of unforeseen problems and leads to the loan becoming more expensive than expected. With a well-considered decision through comparisons, it is easy to get a cheap loan that matches your ideas in 24 hours.

6 Tips for Not Debt on Black Friday

November comes and a lot of people are starting to remember that Black Friday happens at the end of the month. There are many consumers expecting to anticipate Christmas shopping by taking advantage of promotions, or even wanting to secure something they had planned to buy for some time.

But before we understand how to make good use of this time, let’s go back to the meaning of the term. The word Black Friday appeared in the United States around the 60’s. The Friday after Thanksgiving was called this by the police, due to the heavy traffic that occurred during this period because of the famous “Christmas shopping”. “Time later, businesses began to use this movement to create promotions and attract more shoppers.

As in the USA, Brazil concentrates its great promotions in e-commerce and always participates in the action on the last friday of november. The time is right to take advantage of the opportunities to buy that product you are needing or rehearsing for a long time, as some discounts reach up to 90%. Despite all the benefits, be careful not to buy things on impulse and get into debt or fall into the well-known “Black Fraud”.

Escape Debt on Black Friday

While Black Friday may bring opportunities to pay less on a product, be careful not to pay ‘half the double’ or end up in debt for making unnecessary purchases. If you have plans to shop on this business date, it is important to follow some important tips:

Make a list of what you want to buy

List the things you want to buy at Black Friday and start monitoring product prices in advance. This will help you to know if the price shown on the day is really advantageous or if the company is offering a lower than informed discount.

Try to stick to your planning when it comes to buying, that is, following the list of things you really need. Many temptations will come during the season because of the big discounts, but remember not to compromise your budget, especially with things you might not use.

Searching in advance is a great way not to be fooled by inflated discounts. Many sites raise prices weeks before Black Friday and then show discounts that appear to be higher on action day.

Know your budget

You need to understand how much you can spend and set your priorities. This is critical to not end up paying overdraft or revolving credit card interest because you spent more than you could. This can make that super promotion no longer worth it.

Watch out for revolving card interest. If you fail to pay an invoice for a poorly planned purchase or choose to pay the minimum, it can become a big snowball. If you prefer, you can take a Black Friday loan as a supplement to the money you set aside for some purchases.

Buying what you don’t need at a discount is expensive

Remember, focus on buying things that really make sense and that are in your budget. You can pay half the price on a product, but if it is not useful for you, it will turn out to be bad money, and therefore an expensive purchase.

When you look at the discount percentages that stores offer on Black Friday, the purchase seems even more tempting and consequently causes a sense of immediacy and need to buy at that time.

However, it is important to keep in mind some considerations: If you tracked the price of that product during the year and set aside money for the purchase, it may be the perfect opportunity. However, if you have no idea how much it costs, you may want to leave the purchase for another time.

Observe delivery times

During Black Friday it is common for companies to work with longer delivery times. If you are taking the time to shop for Christmas gifts, be very careful, after all, if the delivery does not arrive on time, you may spend again in December.

Escape from scams

Research the reputation of the stores and websites you want to shop on, and also research the quality of the products you are buying. This prevents you from getting into debt and no longer receiving the product or even receiving something with poor quality. Sites that do not have basic security elements should be avoided.

Look for tools like Complain Here to know the reputation of the establishment and also check the social networks. Thinking about technology, another factor that can be observed is if the site has security certificate, ie, if there is an ‘s’ after http, in the site address link.

If the discount is too high, stay alert. Search other sites to compare values ​​and see if the discount really makes sense.

Attention to payment methods


The installment of purchases on Black Friday is not always without interest. Stay tuned for payment methods and see which ones are really interesting and fit your budget. Beware of high interest rates.

If you ended up forgetting the tips and spent too much during Black Friday 2016, be careful about the card rotary. One option to pay lower interest is to opt for a personal loan.

Debt Refinancing – what are the benefits

Refinancing means that you take out a new loan to repay the previous debt. The reasons why we resort to this grip are many and complex. Here is a review of the most common cases, as well as all the tips you need to get the most out of it financially.
What is achieved when you refinance?

Of course, it is best to never have to resort to the refinancing of expensive debt. However, when the need arises, you can at least comfort yourself with the fact that the refinancing is a lot of positive.

  • You probably get lower interest costs.
  • You get fewer fees if you refinance more loans or credits.
  • You avoid debt ending up in debt collection and payment remarks.
  • You get a better overview of the economy.
  • You are probably avoiding worries and stress.

What you need to refinance will affect the benefits. We’ll take a closer look at this below, with suggestions on how to proceed.


Suitable for larger consumer loans

consumer loans

It may be appropriate to refinance even for those who only have a single consumer loan. As a rule, finding a more affordable alternative is more than getting out of a debt trap. The factors that will affect most are what interest you receive on the new loan, what any establishment costs will be, and how long you have left on the repayment period. Basically, most loan customers should always look for cheaper solutions.
Get quotes for new consumer loans of the same size.

  • Look for banks with no setup fee.
  • If necessary, use a finance agent to get plenty of offers.
  • Move the loan if the total cost is lower.
  • Choose shorter or equal payback times, as long as you have enough revenue.

The refinancing of expensive debt can be very profitable if you keep the installment amount constant over time.


Therefore, you should collect more small loans

So-called small loans and micro loans are among the worst when we talk about the need for refinancing. The effective interest rates are often on a par with the credit cards, and in some cases higher. In addition, the borrower pays as many term fees as the number of loans. This fee is also consistently higher for small loans and micro loans, than is the case for larger consumer loans. The phrase “many streams small.” is very descriptive in this context.

  • Collect small loans into a larger and more affordable consumer loan.
  • Search at multiple banks and choose the cheapest option.
  • Refinance the most expensive debt if you don’t get a large enough loan.
  • Choose the shortest repayment time possible.


Delete credit card debt and cut interest rates

credit card debt and cut interest rates

Figures from the State Institute for Consumer Research (SIFO) show that more than 300,000 people are struggling with credit card debt. These are also debts that are significantly more expensive than most other loan and credit products. The interest terms you get in your credit cards can come up to close to 35%, while the cheapest solutions are down to 15%. Credit debt refinancing almost always ends up in much lower costs.

Find a consumer loan with lower interest rates than for your credit debt.
Collect all debt into one loan.

Please note that if the credit is completely used up in a credit card, you can request that the debt be converted into a repayment loan. The terms you may then have, you should compare with the conditions you can get from other banks. If you can save money, move the debt.


What about small loan amounts

What about small loan amounts

Strictly speaking, it is rare that it pays so much to refinance small loan amounts. For example, if you have a consumer loan of USD 10,000, or credit card debt on the equivalent, you should prioritize getting this off through your paycheck. With a little discipline, most people can do this in a month or two.

  • Only move the loan if you are unable to pay down in the usual way.
  • Only move the loan if you get better terms in a new loan.
  • Remember to include establishment costs in the calculation.
  • Don’t use credit cards to pay off small consumer loans.


For you with a mortgage, car, or similar

car loan

Mortgage secured loans are more comprehensive to get refinanced. This includes a new registration of the mortgage secured object. In addition, the establishment costs for the new loan can be several thousand USD.

As a rule, the purpose is also different. For example, we call it refinancing the mortgage when we move it to another bank, only to improve interest rates. Many also bake the car loan into the home loan, to cut interest costs.

In our context, however, there are other situations that may involve a mortgage.


To refinance consumer debt with collateral

consumer debt with collateral

Expensive debts from credit cards and consumer loans can be baked into a mortgage you already have. In that case, there must still be enough mortgage insurance on the property. That is, total debt when the refinanced amount is included cannot exceed 85% of the property’s sales value.

If you are considering this solution, please note the following:

Do not deposit small amounts into the mortgage.
End costs can be significant on debt you might be able to pay through your income, or through an unsecured loan with shorter down payment.
Pay the extra down on the mortgage if you can.

For example, if you invest USD 100,000, the interest rate differential is partially offset if the repayment period is considerably longer than you would have had for a corresponding unsecured loan.


A brief summary

debt loan

The benefits of refinancing debt are as we see many. The savings are often in an order of magnitude that can change the life situation significantly, especially when the debt comes from credit cards and expensive small loans. In addition, such debt becomes even worse to deal with as we struggle to cope with each expense. If they end up in default, expensive debt collection fees come on top. At worst, we end up as debt victims.

Consider getting refinancing offers, especially if the installments are already difficult to manage. Also look for cheaper loan options, even if you have good finances and overview.

A good alternative when applying for debt refinancing is to use the lender Astro. This is a service that accepts your application and sends it to up to ten Norwegian banks. This way, you can be sure that you will end up with a good loan offer, as the bank must compete for you, and not the opposite.

Debt-to-income ratio’s

The ratio debt-to-income calculation shows how much of your monthly income goes to debt payments. This information helps both you and lenders find out how easily you can cover your monthly expenses. Along with your credit scores, your debt-to-income ratio is one of the most important factors for getting approved for a bank loan.

The calculation

money ca;lculation

If you want to calculate your current debt-to-income ratio, add up all your monthly debt payments and divide your gross monthly income from your total monthly debt payments. You can also make a calculation to estimate how much your monthly debt payments should be in relation to your income.

Multiply your income by a target debt-to-income level, such as 30 percent, and use the resulting debt percentage to guide your debt repayment strategy if you are looking to qualify for a future loan.

Monthly debt payments below the required minimum payments for all your loans, including:

  • car loans
  • Credit card debt
  • Student grants
  • Mortgage
  • Personal loans

The gross monthly income used in the calculation is equal to your monthly salary before any taxes or other deductions are taken out.

A few examples

Suppose you have a monthly gross income of $ 3,000. You also have a car loan payment of $ 440 and a student loan payment of $ 400. Calculate your current debt-to-income ratio as follows. Divide the total of your monthly payments ($ 840) into your gross income: $ 840 debt payments / $ 3,000 gross income = 0.28 or 28 percent debt-to-income ratio.

Now, assume you still earn $ 3,000 a month gross, and your lender wants your debt-to-income ratio to be over 43 percent. What is the maximum that you have to spend on the debt every month? Multiply your gross income by the target debt-to-income ratio: $ 3,000 gross income * 43 percent target ratio = $ 1,290 or less per month target for debt repayments Any amount of debt payments lower than the target would be ideal and a lower number would improve your chances with your banker.

Which qualifies as a good Ratio

Banks and other lenders use debt-to-income ratios to measure affordability. Lenders want to be sure that you can comfortably report to your existing debt payments, especially before they approve new loans and increase your debt.

The specific numbers vary per lender, but many lenders use 36 percent as the maximum debt-to-income ratio. That said, many other lenders will let you go up to 55 percent. Lenders can look at two different variants of the debt-to-income ratio. When we look at payments, they can look at a front-end ratio, which only considers your housing costs, including your mortgage payment, property taxes, and homeowner’s insurance. Lenders often prefer to see the ratio at 28 percent to 31 percent or lower.

A back-end ratio of income to the total debt ratio looks at all your debt-related payments.

money debt

This means that you would include car loans, student loans and credit card payments. For your mortgage on a qualified mortgage, to be the most consumer-friendly loan type, your overall ratio must be less than 43 percent. This rule has exceptions, but federal regulations require lenders to show that you have the option to repay a home loan they approve, and your debt-to-income ratio is an important part of your assets.

You are the ultimate judge of what you can afford. You don’t have to borrow the maximum available to you, and it’s often better to borrow less. Borrowing the maximum can put a strain on your budget, and it’s harder to absorb surprises such as a job loss, change schedule, or unexpected costs. Keeping your debt payments to a minimum also makes it easier for you to transfer money to other goals, such as education costs or retirement.

Improve Your Stats

If your debt-to-income ratio is too high, you must bring it down to get approved for a loan. You have different ways of achieving this, although you need a certain amount of strategic planning and discipline.

  • Pay off debt: This logical step can lower your debt-to-income ratio because you will have smaller or fewer monthly payments included in your ratio. Paying credit card debt aggressively allows you to cover lower mandatory monthly payments.
  • Increase your income: Any additional work you can take before borrowing can help. All the income does not have to be yours, however. If you apply for a loan with a spouse, partner or parent, their income and debts will also be included in the calculation.
  • Of course, that person will also be responsible for paying off the loan if something happens to you. Adding a cosigner can help you get approved, but be aware that your cosigner is taking part of the loan repayment risk.
  • Slow down borrowing: If you know you’re going to apply for a major loan as a home loan, avoid getting on other debts until getting your home loan financed. Buying a car just before you get a mortgage will hurt your chances of getting approved because the big car payment counts against you. On the other hand, it will be harder to get the car after you get a mortgage, so you’ll have to set priorities.
  • Bigger down payment: A large down payment ensures that your monthly payments are lower. If you have cash available and can afford to transfer it to your purchase, see how it would affect your ratios.

Lenders calculate your debt-to-income ratio using income that you report to them. In many cases you need to document your income, and lenders must be confident that you can continue to earn that income for the duration of your loan.

Your debt-to-income ratio is not the only thing that lenders consider.

money debt

Another important ratio is the loan to value ratio (LTV). It looks at how much you borrow compared to the value of the item you purchase. If you cannot put down money, your LTV ratio will not look good.

Credit is another important factor. Lenders want to see that you have borrowed, and more importantly, the repayment of the debt, for a long time. If they are convinced that you have handled your debt properly, they are more likely to get you a loan. They will look at your credit history and scores to evaluate your lending history.

Instant credit despite poor credit rating.

A bad credit rating is not necessarily based on a negative private credit checker information, but can also be the result of insufficient income or existing credit liabilities. Particularly for loan applicants with fluctuating or multi-component income, the credit rating varies depending on the bank.

This also applies to temporary workers and employees with fixed-term contracts, the creditworthiness of which some financial institutions generally classify as poor. Lenders usually pay out an instant loan within two bank working days of submitting the application.

Bad creditworthiness is not caused by the private credit checker information

Bad creditworthiness is not caused by the private credit checker information

Consumers have a good chance of an instant loan despite poor creditworthiness if their poor creditworthiness is caused by a changeable income or by a low wage that was enhanced by a part-time job. Proof of earnings is generally required for lending with processing times customary in banks, with many credit banks ignoring additional income.

Financial institutions, on the other hand, often refrain from submitting proof of earnings for instant loans because they cannot review them in any case given the short processing time for the loan application. A deliberately glossing over of the monthly income is of course not permitted in the case of an applied for instant loan despite poor creditworthiness. However, applicants can take into account all income components, including part-time jobs, without fear of the bank calculating earnings differently.

If the bad credit rating is based on the private credit checker information

If the bad credit rating is based on the private credit checker information

If the poor creditworthiness is based on negative private credit checker information, an immediate loan can be applied for from a Good lender bank despite poor creditworthiness. This does not make a private credit checker request and is therefore not informed about the poor creditworthiness due to a previous financial irregularity. When it comes to household bills, Good lender lenders only take into account income earned in their main job; in contrast to German lenders, they don’t even count child benefit.

The federal banks do not understand an instant loan as transferring money after two bank working days, but rather paying out the loan within one week. This time is necessary because the federal institutes have extensively checked the submitted proof of earnings due to the waiver of the private credit checker request. The money is transferred in Good lender private credit checker-free instant loans in USD.