A Loan from a Family or a Loan Company?

When we need money, we often use family support, sometimes even sign a contract with our loved ones, but it’s worth considering the option. A critique at plainsnews.com

We need money very much. Sometimes, situations happen when we urgently need cash. Then we often go to someone from the family or to friends asking if they will be willing to help us. Another option is to use an online loan, which we will be able to repay easily without having to indebt our relatives.

Loan agreement in the family

Loan agreement in the family

There are situations when we need money. Unfortunately, often the bank does not want to give us a loan . Therefore, we are looking for another support. The first thing that comes to our mind is to help your family or friends. This solution seems most reasonable. The relatives do not usually refuse, and you can always agree on the sum and the repayment date. Even if we are in trouble, untimely debt repayment will not lead to the visit of the debt collector or bailiff, so – delays will not cause problems. Many of us think so, but before we sign a loan agreement with someone from the family, it’s better to check what it is.

First of all, it is worth finding out whether the loan from the family is taxed. The loan from the closest belongs to the first tax group. We can avoid fees if the amount does not exceed PLN 9,737. In the case of a larger amount borrowed from people close to us, we may be exempt from payment provided we report it to the Tax Office with the PCC-3 print. It’s important to do it within 14 days of signing the contract – then we have to wait for an answer.

Online loans are a good option

Online loans are a good option

Each of us has their own needs, but we can not always afford what we care about the most. Not everyone can afford a loan from the family. They think that a payday loan and an installment loan in a non-bank institution will not be a good option either. Sometimes they are wrongly afraid of the effects of unpaid loans , which is why they give up the opportunities offered by the companies from the loan sector. As it turns out, sometimes they leave the idea too soon.

Meanwhile, using the services of loan companies does not necessarily involve high risk. Everyone who is afraid of installment loans in non-bank institutions should check the exact information about them before making a decision. Loan portals will help. There you will find details on the rules of safe lending. What’s more, we can read the rankings of loans in installments and payday loans, as well as use loan comparison engines. As you can see, choosing a loan company is worth remembering . If we stick to these rules, it may be a better option for us than a loan from the family.

Private loan and online loan

Private loan and online loan

The loan from the family is undoubtedly a tempting option. It allows us to take advantage of financial support, without weakening our creditworthiness . However, when thinking about this kind of obligation, we should remember that money is a frequent cause of conflicts in families. Difficulty in paying off a commitment to relatives can set them apart for many years. In such situations, it is better to withhold the decision and think whether it is better not to take a loan from another source.

When looking for financial resources, it is worth remembering that secure borrowing in a non-bank institution is a right decision, if we are guided by common sense. The use of offers from proven companies should not have unpleasant consequences. If you make a loan on time , you will certainly not be exposed to additional fees due to delays.

Where to Start Investing – With Strategy

 

I have repeatedly witnessed sad stories when a novice investor suffers serious financial losses. Unfortunately, sometimes this leads to disappointment and even abandonment of plans to invest. It has long been suggested a separate article on how to start investing money, what tools are better to use for a beginner and what mistakes should be avoided. http://palehorseandrider.com/financial-guidance-for-poor-credit-consumers-is-available/ for clarification

 

What Should Be a Novice Strategy

 

What Should Be a Novice Strategy

 

I have been running this blog for over 6 years now. All this time I regularly publish reports on the results of my investments. Now the public investment portfolio is more than 1,000,000 rubles.

Especially for readers, I developed the Course for a lazy investor , in which I showed step by step how to organize personal finance and effectively invest my savings in dozens of assets. I recommend every reader to go through at least the first week of training (it’s free).

Read more

Most often, debutants, even knowledgeable in terms of knowledge and having read quite a few books on the topic of investing, simply do not cope with their emotions. Where better to start, because it turns out a vicious circle: emotional stability, an adequate response to stress usually come with experience!

My recommendation is to start with a strategy that I endow with the three signs necessary for a beginner.

  1. It should be least dependent on the emotional background. Feelings are the main enemy of any investor and in the first stage they can provoke irrational actions on the basis of panic or euphoria. You should not be comforted by the confidence that you are an adult and therefore are able to curb the inner impulses. Your real behavior and its financial result may unpleasantly surprise you.
  2. The strategy should not require high qualification from a novice, developed operational skills in financial management. For example, it should be neutral to the presence of an established trading system. That is, there may not be any particular concept at all. Even an experienced high-risk trader often loses money, deviating from a pre-established rigid framework. His trading system is made up of the ratio of stop-loss and take-profit and following several technical indicators. A novice participant has not yet developed such an algorithm.
  3. A strategy for an inexperienced investor should not require constant intervention, actions such as I / O, portfolio rebalancing, etc. Yes, such passivity does not contribute to fast learning in practice. But it is better to study in parallel, reading useful materials, watching the actions of experienced colleagues or trading on a demo account. It is better than to drain capital and be disappointed in this lesson at the very start.

Frequent manipulations with investments have one more harmful effect: they multiply the commission costs, because the broker has to pay for each order. An experienced investor can compensate for the commission through accurate and efficient action. The chances of a beginner to earn on trading activity are much lower.

 

Typical Mistakes Novice Investor

 

Typical Mistakes Novice Investor

 

Calling signs of the right strategy, let me remind you of the common mistakes of the investor , which beginners often make.

Goal = profitability, when the investor sets himself a task based on the requirements for capital growth. Of course, these goals may be quite moderate, but the problem is different. Task setting should include not only a benchmark in percent per annum. It is important from the outset to identify the level of risk (the maximum allowable drawdown) and capital protection measures. Your risk profile is determined primarily by the ratio of conservative and aggressive instruments in the portfolio.

The perception of the image of the investor as a gambling, constantly risking player who quickly makes decisions in a changing market. Such a view is characteristic of many newcomers, which can have a detrimental effect on their finances. The reliability of a long-term strategy, by contrast, is based on strict adherence to the original plan, regardless of fluctuations in quotes and rates. For an inexperienced investor, it is not the reaction rate that is important, but constancy and resistance to stress.

Attempts to guess the price movement. It seems to many newcomers that they have conducted a sufficiently deep fundamental or technical analysis to understand in which direction the price of the asset will go. Perhaps this is the case. But the market often presents surprises that break the usual logic. Unable to know the future. Example: Facebook shares fell by 10% in the summer of 2018, amid a predictable political scandal. What is important is not so much how accurately you calculated the market situation, but rather how insured you are in case everything goes “wrong.” The investor pays for safety by reducing potential profits. But the one who knows where to stop and where the road to retreat wins.

The desire to get a lot at once. It is difficult for a novice investor to come to terms with the fact that a portfolio designed for long-term profit requires patience and the ability to wait, perhaps more than one year. There are traders on the market who make short speculations. But you need to understand that trading is another occupation and only a minority of professionals win here. As a rule, these people work with complex derivatives, and what they are doing, by and large, cannot be called investment. I wrote about the difference between investment and speculation in this article .

Haste and fussiness are the enemies of a novice investor. What can you hurry up and lose because of this:

  • Accept a tempting offer to participate in a project without properly examining possible risks;
  • Enter the market or leave it spontaneously, under the influence of fear of losing or losing profits.

The antipode of haste is a long postponement, this is another disease of beginners. Someone considers himself insufficiently prepared and as a result loses the opportunity to learn in practice. Another catches the “ideal” conditions for the start and endlessly postpones the decision.

Another mistake is to enter the market immediately for “the whole cutlet”, with all the available money (or, even worse, taken on credit). I will give 3 rules regarding the amount of investment.

  • For the first investment it is especially important that the loss of the deposit does not become a psychological and financial catastrophe for you. The essence of the rule: the more experience, the greater the amount you can afford. I once started with $ 100 .
  • Always create a safety cushion for yourself and your family, and only then begin to invest significant amounts. It is usually 3–6 months of life without an external source of income, depending on your family situation.
  • Phased purchase in 2-3 receptions. There is always the possibility that the asset may still fall in value.

Invest in one or a group of related assets. For beginners, it is typical to “fall in love” with the object of their investments, to consider it extremely promising. Example: Amazon shares, which looked like technology growth leaders and a stronghold of stability, lost 14% of their capitalization in 2 days due to a slight discrepancy in revenue and forecast in 2 days.

Conclusion: nothing personal, no preferences, just a cold calculation. The antidote here is one: the widest possible diversification, as far as the amount of your deposit allows. Ideally, no more than 10–15% of a portfolio in one asset or instrument. In addition, it is recommended to diversify by country, currency, industry, risk indicators, instruments. But too small crushing has disadvantages, since it is fraught with a decrease in efficiency.

 

Why You Should Start With Bonds and ETF

 

Why You Should Start With Bonds and ETF

 

Such tools tend to have lower yield potential. Their value is that they contain protection against the risk of losing or greatly reducing the deposit. Therefore, if you have come to investing for a long time, are going to associate with them the future well-being of your family, you should start with conservative instruments tied to a rate or a broad index.

For example, OFZs , in terms of risk / reward ratio, are very close to a bank deposit . The current yield is slightly above the average rate – about 8% per annum. A big plus is the ability to sell bonds at any time. For comparison, prematurely closing a deposit without loss of interest income is unrealistic. The entry threshold is suitable for any investor – the lot is only 1000 rubles. Compare OFZ quotes of different issues can be in the service Smartlab.

 

If you want to increase the yield of a portfolio, you can dilute it with a small number of liquid stocks, gradually increasing their share. The main thing – in parallel with this to learn and consolidate new skills in practice. Subsequently, as competencies are formed, one can consider Eurobonds of Russian companies (the minimum lot is $ 1000, the yield is 4–7% per annum in foreign currency).

From which market to start – our or foreign? It’s easier and safer to learn a new profession: “Never invest in something you don’t understand.” After mastering the tools of the Russian market, you can try to go to foreign exchanges. Another thing is that this step must be done sooner or later. Country and currency portfolio diversification has always been helpful. Today, this is exacerbated by the regular devaluation of the ruble, a negative news background. And the set of domestic tools is very limited.

If you already have experience in trading on a Russian stock exchange, then you know how to find undervalued stocks. There are convenient services that allow you to compare foreign issuers by multiples: finviz.com, Google Finance, Yahoo Finance, stockflare.com, etc.

In the Russian jurisdiction there are 2 main options for entering into foreign assets. If you prefer to make a choice yourself, then you can select several large issuers on the St. Petersburg Stock Exchange . If you are not ready to filter the paper by the piece, ETF (Exchange Traded Funds) Exchange Funds, whose shares are traded on the stock exchange, are suitable for you. You can start with ETF from Finex , which are on the Moscow Stock Exchange. Of course, the choice is not rich – there are only 15 ETFs in the list. But you can begin to master the tool with them, by opening an account with a Russian broker. There are 2 more ways to enter this product: through the acquisition of shares of a Russian mutual fund investing in an ETF and through a funded insurance program. But both of these options have many restrictions and high costs for the payment of services of the Criminal Code.

For a novice ETF give undeniable advantages:

  • Low entry threshold – from 500 rubles here and from $ 100 abroad.
  • In the ETF itself has already laid the diversification of assets from different industries and even countries.
  • The composition of the fund’s assets is usually tied to the base index (for example, the S & P 500); this insures against the drawdown of individual issuers.
  • Asset security by auditors, depositories, insurers, SEC commissions.
  • ETFs are denominated in foreign currency, which eliminates the worries of the ruble exchange rate.
  • Relatively low commissions, on average 0.5%.

The commissions are small because the funds often follow the index and manage hundreds of billions of dollars. This does not require a large staff of analysts, but it allows you to earn on volumes. The composition and dynamics of ETF quotes are conveniently tracked on aggregators: etf.com, morningstar.com, etc.

As your capital and competencies grow, it is logical to think about going beyond the domestic market through a foreign broker. Russian brokers offer services for the withdrawal of foreign exchanges only to qualified investors . You shouldn’t think that going “over the hill” requires an amount that is very heavy for our investor. For example, in Interactive Brokers there is no minimum threshold at all. In addition to a wide selection of tools, the protection of your investments will be a plus, in particular, deposit insurance up to $ 500 thousand.

Returning to the question that subscribers are asking more often than others, “Where to start?” – start with yourself. Invest in learning and do not stop doing it, even when you feel confident in your professionalism. The market is undergoing constant changes, for which you need to keep up.

 

 

 

 

Corporate finance: a loan adapted to your needs

 

Active and specialized in solutions, we can offer to finance tailored to your company. Easily and quickly, get the money you need to carry out your professional projects!

Your situation

financing

You are independent, manager of a company, partner, director? If you need financing for a company, we can offer you a loan focused on your needs that will take into account the specificities of your company, your need for money in the short or medium term, and your ability to repay. With defining your own need:

  • Free choice of methods : choose the amount of 10,000 to 300,000 Chf and freely dispose of the amount borrowed. With a repayment term of between 12 and 84 months, you make sure you have the time needed to repay the loan.
  • Fixed monthly payments: whatever the amount borrowed or the expected repayment period, we offer a fixed monthly payment each month. You can calmly plan repayment without running the risk of a rate increase!
  • No administrative complications : with Multicrédit, you are sure to benefit from a financing offer adapted to your company. Our team takes care of most of the steps, you get your loan without administrative complications and can focus on your projects .
  • Free use of the amount granted : whatever your need, it is you who freely choose the use of the money obtained through our financing. Whether it’s financing a project, an investment, you stay in control!

Security and confidentiality

Security and confidentiality

With many years of experience in the field of corporate finance, we place great importance on the security of our customers’ data. Whatever your situation or the needs of your business, we guarantee a 100% confidential treatment of your file.

Contact Us

Contact Us

Whether renovating your office, buying new equipment to stay at the forefront of your field, filling a temporary cash flow problem, or any other investment, the ideal partner ! Do not hesitate to contact us to benefit from an offer as soon as possible!

 

Credit Bank – Loan Consolidation Simulation

 

A bank that listens to its customers is a winning bank for an assured future”. The company creates in 2010, is active in order to improve daily its services for customer satisfaction, which is based on the principles: “Being close to customers, responsibility, seriousness and transparency”. Its main activity being the financial product, it has recently proposed the credit Brer Rabbit, to be able to get closer to its customers. The postal bank offers a new look at the gathering of credits.

The credits, how does it work?

loan,credits

Free your debts: financial institutions offer its customers consumer credit which includes the personal loan, the loan for works, renewable loans … And mortgages. For La Banque Postale, to avoid being in the red, you only need to have one credit with a bank and pay it monthly. An enticing proposition: buy back your debts.

It should be noted that the credit Brer Rabbit is to buy back your debts by giving in return for cash, but not to negotiate the rates to pay. The amount you receive will initially be a way to pay all the debts you have with several organizations. In the end, the postal bank will be the only remaining bank, and this will alleviate the monthly payment which will have a longer repayment period.

Loan aggregation proposal may concern only a portion of your total debt, this is a partial credit. Note that it is not useful to combine consumer credit and mortgage or real estate loans, they are modular and can harm your needs. The ball is in your camp and you choose according to your needs.

The consolidation of consumer credit and real estate is not impossible, however, the prices paid monthly will be even more expensive, the same for the mortgage. The Postal Bank offers the possibility of making another loan to settle other needs in progress. On the net, the information on the ceiling to be followed to have a credit is clearly visible, as an example, the minimum rate granted for the consumer credit depends on the remaining principal outstanding and must be at least 1500 euros and at most 50000 euros .

What are the advantages of credits?

Most French citizens rush to obtain the financial credit to make its projects a success, because of the purchasing power which is constantly decreasing, especially with the help of revolving credits. It turns out that it is a great help for households, but over time, this help will become a big financial problem, certainly, we have our own house, but as soon as we see the bill every month, we realize that we are in the red.

The credit offered by the Postal Bank helps its customers a lot, because it includes all its debts and decreases the monthly expenses, so that they can enjoy their daily life.

Every detail is valuable in a credit deal

credit

For the Postal Bank, it first looks at the source income of each person and all the credits to be paid. The rates of his debts are the first to be studied before embarking on a thorough analysis. Following this study, the advisor of the Postal Bank will determine the possible offers for each situation. It should not be forgotten that a credit  will be part of the bills to be paid every month.

The slogan: “Be close to consumers to better support them! “

“The customer is king”, a proverb widely used in the marketing community. Without clients, a bank will not be able to walk, play on its integrity, or show its seriousness and responsibility in the face of a situation. To listen to all its customers, the Postal Bank can be reached by phone at 3639.

How to calculate mortgage insurance

Group or delegation contract?

The calculation of the mortgage loan insurance rate depends mainly on the nature of the contract. To put it simply, there are on the one hand the “group” contracts offered by the banks or their subsidiaries and on the other hand, the contracts offered in external delegation.

The former calculate the premium on the capital borrowed, the latter on the capital remaining due.

Mutualization of the banking contract

mortgage loan

If you opt for the group contract of your bank, the calculation will be relatively simple since it involves applying the following formula:

Loan Insurance Calculation Formula

Loan Insurance Calculation Formula

Take the example of a couple who borrows 150,000 euros with an insurance rate of 0.30% by choosing the following percentage: 100% for Monsieur and 50% for Madame. The monthly payment will be calculated as follows:

Which gives as result: 56,25 € .

Note that the duration and the credit rate do not affect the calculation.

Individual pricing with an external delegation

mortgage loan

With regard to external delegation, it is not possible to calculate the premium or the rate accurately without having a pricing software. In addition, these results depend on the companies and vary from one contract to another. They are also based on an analysis of the situation of each borrower that combines two variables:

  • The age
  • The capital remaining due at the end of the period following the amortization schedule

In addition, there are many situations that can increase the premium, such as smoking, aggravated health risk or dangerous work. 
In addition, keep in mind that rates may vary from one company to another. It is therefore advisable to go around the competition before choosing.

Choice of the quota

When you buy a loan, the bank requires that you be insured for 100% of the capital.

For this, a couple of borrowers can choose freely to distribute the load on each of them by combining for example the following quotations:

  • Half on each head
  • 70% for Monsieur and 30% for Madame etc.

The insurance portion therefore represents the percentage share of each borrower. 
By choosing a percentage of 100% on each head, it is thus possible to ensure up to 200% of the loan amount. This choice will obviously influence the calculation of the final cost.

The options

No need to talk about rates or premium without addressing the chapter of the insurance contract guarantees. In fact, any tariff comparison must be based on equal guarantees.

Most contracts include death and disability guarantees and incapacity for work (after a 90-day deductible). But looking at it more closely, you will notice that there are some noticeable differences, particularly with respect to disability. We also advise you to read the chapter on exclusions carefully.

Lastly, other factors coming into the mortgage insurance calculation, the options may weigh down the rating as the unemployment insurance.