Archive December 31, 2019

What is the age limits for a loan?

What is the maximum age to apply for a loan?

What is the maximum age to apply for a loan?

For some time, when it comes to loans, many have been wondering if there is actually an age limit or not.

Looking at the regulations envisaged by the main credit institutions present in Italy, we can say that the limit is up to 75 years of age. These do not have to be done when paying the last installment.

Obviously there is a reason why this age was chosen since many banks consider it fundamental to have a certain guarantee of returning the money in advance.

And if we take into account that life expectancy tends to drop beyond 75 years of age, we understand why many banks have set this type of limit. A very important aspect that should be considered is that it is not the maximum age in which to apply for the loan, but the age that is reached for the payment of the installments foreseen for the repayment of the amount of money to the bank. Some notable exceptions for loans

The limit universally recognized by the main banks is that of 75 years

The limit universally recognized by the main banks is that of 75 years

For a loan. Yet it is worth mentioning some particular cases: there are certain lenders that guarantee loans even to people over 80 years of age, even though it is therefore a rather low life expectancy.

However, there are fundamental conditions that cannot be ignored, such as guarantees including good life insurance and also the possibility of paying a debt repayment in the event of death.

In addition to remembering that among the conditions there are also the pension, which must be high enough to allow the payment of the installments foreseen for that loan. And without forgetting an accurate assessment of the state of health which thus allows you to have a sort of natural guarantee as regards the person who receives the loan at 80 or even 90 years.

It should be noted that among the conditions provided for loans over 75 years there are also quite high interest rates based on increasing age: so a 90-year-old person will have higher rates than a 75-year-old.

The conclusions: what to know about loans beyond a certain age

The conclusions: what to know about loans beyond a certain age

When it comes to loans for people of advanced age it is good to remember that many lenders provide guarantees of a certain level. So this is certainly not an easy possibility, but that some banks still provide. It is important to know that the loan term is calculated taking into account the future age of the person requesting it.

To understand this, one can think of a 70-year-old person applying for a loan : obviously a division of the installments will be studied in such a way that it does not reach an excessively high age and that it could be a problem not only for the person, but even for the same bank.

The maximum duration that is usually accepted is five years so that those who request it do not risk leaving a debt to be paid to their heirs and that there is a certain guarantee for the bank.


Budget and credit calculation: how is solvency calculated?

Whoever intends to apply for a loan must first be aware of the fact that this decision means making a long-term financial commitment. Therefore, it is extremely important that future creditors receive a loan, which corresponds to their income. How can you calculate your budget for a future loan and who to ask for an offer? Find out our expert opinion on this new article


Budget calculation is always required

Budget calculation is always required

Banks in Switzerland are required by law to calculate the applicant’s budget for each loan application (see LCC). This is called the so-called solvency check, the purpose of which is to protect the client from over-indebtedness. However, the law does not explicitly establish which elements are to be included in the calculation of the financial statements. But in principle:

  • The borrower is considered eligible for credit provided that he can repay the loan without getting into debt
  • This part of the budget is calculated differently depending on the canton.
  • A consumer must be able to repay his credit within 36 months, even if the contract may be longer.
  • It should be noted that these are basic requirements. Generally banks can also apply stricter criteria regarding the bugdet.


Budget surplus

Budget surplus

Different elements determine the loan capacity for a customer. The most important key figure is the budget surplus. It is the part of the budget that remains when several expenses are deducted from net income; a consumer must therefore have a positive balance to obtain a loan. The elements of the balance sheet calculation are:

This legislative regulation can be put into practice for individuals but also for married couples with or without children. In addition, banks set an estimate for costs that cannot be documented (e.g. basic expenses). However, all elements of the balance sheet calculation must be listed in the credit agreement.


Revenue, budget and credit: non-binding example

credit loans

The exact budget surplus depends heavily on the individual situation. We have created an example for you that corresponds to an average family * who would like to take out a loan in Switzerland:

Mr and Mrs. Valentino are married and have a son. They live in a rented apartment, he works 80%, she 20%. Overall, they have a net income of USD 8,000 per month. Their budget looks like this:

  • Monthly entry of USD 8,000
  • Monthly expenses of USD 6,500
  • Budget surplus: 1,500 USD

The maximum loan amount is calculated by multiplying the monthly surplus by 36. The Valentino family was thus able to obtain a maximum credit of USD 54,000.


Where can I get the best loan based on my budget?

Where can I get the best loan based on my budget?

As already mentioned, it is very difficult for non-professionals to calculate their credit budget exactly. The latter, in fact, depends on various factors. To get an accurate overview of your income and expenses and the maximum credit limit to be obtained, it is always advisable to contact an expert. Lite Lender has been operating in the credit sector for private individuals since 1999 and can explain all the details on credit limits and budget surpluses thanks to free and non-binding advice. Furthermore, through an independent credit intermediary, you benefit from its know-how in the processing of dossiers and its negotiating skills with banks, which often allow you to get better offers.

Revolving and dynamic credit: discover these solutions for SMEs

The credit market is constantly evolving. Not only do the credit conditions, interest rates, long-term maturities, etc. change, but the products themselves are constantly evolving. In our article we present two new SME financing products offered by Loanfix that meet specific needs.

Evolution of PMI credits

credit loan

The form of credit most frequently used by companies is “classic” SME credit. It is a loan paid in one go, the sum of which must be repaid at an agreed maturity in the form of monthly payments including amortization and interest. Companies can obtain such a loan from a bank or go directly to a specialized intermediary.

In terms of development, peer-to-peer has grown strongly in recent years due to the slow decline in banks’ dominance in the credit market. If you are interested in a simple corporate credit with or without a bank, Loanfix offers solutions for “classic” SME credits.

New types of credit: dynamic credit and revolving credit

New types of credit: dynamic credit and revolving credit

Thanks to constant innovation in the credit market, new solutions have emerged. These products differ from traditional loans in the way they operate while maintaining the same starting objective, namely the ability for a company to obtain liquidity.

Dynamic credit

Dynamic credit

Dynamic credit is a particular type of credit that can be viewed as an alternative to factoring. The company has a flexible credit limit to finance its needs. Dynamic credit thus eliminates the need to wait for customers to pay. This service is a specialized financial product that differs from conventional credit in several respects:

  • The amount granted directly depends on the annual turnover and the expected revenue.
  • Receivables from customers act as a guarantee for the amount received

Dynamic credit differs from other types of credit in that it is a product designed to accelerate cash flow and improve equity. Liquidity is not immediate, but the company receives a portion of the loan every time it makes a sale. Here are some advantages:

  • This service allows to obtain liquidity without waiting on the payment of its customers
  • It is a real alternative to factoring for example
  • Improve your cash flow

Renewable credit

Renewable credit

Revolving credit is a type of credit that works similarly to a mortgage: the borrower receives a certain amount paid directly, of which he pays only interest. There is therefore no amortization during the term of the contract. At the end of the contract, the borrowed amount can be repaid in full, or the contract can be renewed (which is why it is called renewable or revolving credit ). In the second case, the firm continues to take advantage of the borrowed amount and pays interest on it. However, it is possible to convert the product into a conventional loan once the contract is finished. With this product:

  • Monthly expenses are particularly low because only interest is billed
  • The sum can be loaned in the short term (at least 6 months)
  • The repayment can be converted into an SME loan

These two new types of credit have only recently appeared on the Swiss market – inquire with a specialist with Loanfix, who offers revolving credits as well as specialized advice for companies seeking liquidity.

Trust a specialist

When an innovative product arrives on the market, the beneficiaries of the loan do not yet know the details and particularities. It is therefore important to obtain information from a competent consultant. Loanfix is a financial market expert who, in addition to loans, also offers new types of products such as dynamic credit or creditp revolving. We recommend anyone who wants to get a loan to request detailed information on the functionality of a new product and to analyze the situation of their company. You will find all this on Loanfix.