8
Oct

How is the real cost of a loan calculated

When people go to a bank to ask for a loan, they only look at the nominal interest rate (TIN), which is usually the interest rate that the bank itself publicizes to make the loan attractive and desirable in the eyes of its clients. customers. However, there are a number of factors that must also be taken into account to calculate the real interest rate that will be paid for the borrowed money, or what is the same, the actual cost of a loan once all the commissions are included and associated expenses.

The real cost of a loan is what is known as the annual equivalent rate (APR) and includes not only the TIN, but also the rest of the expenses related to the loan, such as opening and cancellation fees or linked insurance.

 

TIN vs TAE to calculate the real cost of a loan

Many times, the difference between a cheap loan and an expensive loan falls on those other expenses. It can even happen that a loan with a very low TIN is actually quite more expensive than another loan with the higher TIN. There are also loans that are offered at a 0% TIN but their real cost is very high.

For example, imagine that you contract a loan of 20,000 euros with a repayment term of eight years. If your interest rate is 5.99% (TIN) but you hide an opening commission of 2% and a formalization fee of 60 euros, then the real cost of the loan, that is, your APR , is 6.81 %.

In this example, you see how the loan is not as cheap as it seemed at first. If instead of 20,000 euros we made calculations for a mortgage of 150,000 euros and included the innumerable commissions that most involved, the difference between TIN and TAE would be even greater.

As you imagine, when comparing loans to select the cheapest one, it is not enough to look at the TIN. It is very important to know what is the APR of each of them. Otherwise, a wrong decision will surely be made. Regardless of the TIN, other things being equal, the one whose TAE is smaller should be chosen.

HOW TO CALCULATE THE APR

In practice, it is very difficult to calculate the APR of a loan. You should do it using an Excel spreadsheet (on the internet there are some very well done) or using an online financial calculator like the one offered on your website by the Bank of Spain.

However, you must know that the Bank of Spain itself requires all financial institutions that operate in Spain to publish both the TIN and the APR of their loans. What happens is that this information can be a bit hidden or in very small print so that it is not easy to find. Therefore, if you are not clear, ask your bank agent. It is in the obligation to inform you.

8
Oct

How is the real cost of a loan calculated

When people go to a bank to ask for a loan, they only look at the nominal interest rate (TIN), which is usually the interest rate that the bank itself publicizes to make the loan attractive and desirable in the eyes of its clients. customers. However, there are a number of factors that must also be taken into account to calculate the real interest rate that will be paid for the borrowed money, or what is the same, the actual cost of a loan once all the commissions are included and associated expenses.

The real cost of a loan is what is known as the annual equivalent rate (APR) and includes not only the TIN, but also the rest of the expenses related to the loan, such as opening and cancellation fees or linked insurance.

 

TIN vs TAE to calculate the real cost of a loan

Many times, the difference between a cheap loan and an expensive loan falls on those other expenses. It can even happen that a loan with a very low TIN is actually quite more expensive than another loan with the higher TIN. There are also loans that are offered at a 0% TIN but their real cost is very high.

For example, imagine that you contract a loan of 20,000 euros with a repayment term of eight years. If your interest rate is 5.99% (TIN) but you hide an opening commission of 2% and a formalization fee of 60 euros, then the real cost of the loan, that is, your APR , is 6.81 %.

In this example, you see how the loan is not as cheap as it seemed at first. If instead of 20,000 euros we made calculations for a mortgage of 150,000 euros and included the innumerable commissions that most involved, the difference between TIN and TAE would be even greater.

As you imagine, when comparing loans to select the cheapest one, it is not enough to look at the TIN. It is very important to know what is the APR of each of them. Otherwise, a wrong decision will surely be made. Regardless of the TIN, other things being equal, the one whose TAE is smaller should be chosen.

HOW TO CALCULATE THE APR

In practice, it is very difficult to calculate the APR of a loan. You should do it using an Excel spreadsheet (on the internet there are some very well done) or using an online financial calculator like the one offered on your website by the Bank of Spain.

However, you must know that the Bank of Spain itself requires all financial institutions that operate in Spain to publish both the TIN and the APR of their loans. What happens is that this information can be a bit hidden or in very small print so that it is not easy to find. Therefore, if you are not clear, ask your bank agent. It is in the obligation to inform you.

29
Sep

Advantages of rent with option to buy if you are young | Vivus.es

If you are young and you do not have enough savings to cover the purchase of a home (remember that most banks only finance 80% of their value), perhaps rent with option to buy is the best way to access a house in the property.

Rental contracts with purchase option are regulated by the Urban Rental Law (LAU) and are a formula increasingly used by people who do not have enough money to meet the initial costs of buying a home.

WHAT IS RENT WITH OPTION TO PURCHASE

This method offers you the possibility of living for rent for a number of years and, after the agreed period, sign a sales contract that will allow you to be the absolute owner of that home, with the great advantage that all the money you pay for the rent (or a part of it, according to the agreement) is deducted from the final price of the property .

We explain it to you with an example so you can understand it more easily. Imagine that you sign a rental contract with an option to purchase a home that costs 100,000 euros. In the contract you agree to a rental period of five years and a lease fee of 400 euros per month. One hundred percent of that amount will be deducted from the final price of the home. After five years, the purchase option will be executed.

With these conditions, after five years have passed you have paid a total of 24,000 euros in rent (4,800 euros each year), so you only need to ask for a mortgage of 76,000 euros to make the house yours . For the 24,000 euros that you have already paid, you will not have to pay interest and the costs of setting up the mortgage will be lower.

THE ADVANTAGES OF RENTING WITH OPTION TO PURCHASE

As you can see, rent with option to buy offers a very interesting opportunity to own a home, especially if you are young and have no savings. We summarize all its advantages:

1º. The money that you are paying each month for the rent is money that you will not pay for a mortgage. Being the minor mortgage, so will your interests. Following the previous example, we assure you that the interest corresponding to 24,000 euros would have been very high.

2º. If you do not deliver a guaranteed signal at the beginning of the contract, you are assured, free of charge, that the house will be for you, since the owner can not sell it to another person. If you repent and decide not to buy it, nothing will happen and you will only have paid a rent. As is logical, in case you have paid a signal and decide not to buy, you will lose the money of that signal, unless you reach an agreement with the owner.

3º. You guarantee that the price of the home will not go up (eye, or down), since in the contract the sale price is agreed for when the rental period passes.

4th You can save for mortgage expenses. . That money you save each month can be used to pay the mortgage expenses, which are around 12% of the sale price and almost no bank finances them. These expenses (notary, registry, agency, tax of documented legal acts …) will also be lower because the mortgage you need is less.

As you can see, the advantages are very attractive, especially for young people, who are the group with the greatest difficulty in accessing a home in Spain.

29
Sep

Advantages of rent with option to buy if you are young | Vivus.es

If you are young and you do not have enough savings to cover the purchase of a home (remember that most banks only finance 80% of their value), perhaps rent with option to buy is the best way to access a house in the property.

Rental contracts with purchase option are regulated by the Urban Rental Law (LAU) and are a formula increasingly used by people who do not have enough money to meet the initial costs of buying a home.

WHAT IS RENT WITH OPTION TO PURCHASE

This method offers you the possibility of living for rent for a number of years and, after the agreed period, sign a sales contract that will allow you to be the absolute owner of that home, with the great advantage that all the money you pay for the rent (or a part of it, according to the agreement) is deducted from the final price of the property .

We explain it to you with an example so you can understand it more easily. Imagine that you sign a rental contract with an option to purchase a home that costs 100,000 euros. In the contract you agree to a rental period of five years and a lease fee of 400 euros per month. One hundred percent of that amount will be deducted from the final price of the home. After five years, the purchase option will be executed.

With these conditions, after five years have passed you have paid a total of 24,000 euros in rent (4,800 euros each year), so you only need to ask for a mortgage of 76,000 euros to make the house yours . For the 24,000 euros that you have already paid, you will not have to pay interest and the costs of setting up the mortgage will be lower.

THE ADVANTAGES OF RENTING WITH OPTION TO PURCHASE

As you can see, rent with option to buy offers a very interesting opportunity to own a home, especially if you are young and have no savings. We summarize all its advantages:

1º. The money that you are paying each month for the rent is money that you will not pay for a mortgage. Being the minor mortgage, so will your interests. Following the previous example, we assure you that the interest corresponding to 24,000 euros would have been very high.

2º. If you do not deliver a guaranteed signal at the beginning of the contract, you are assured, free of charge, that the house will be for you, since the owner can not sell it to another person. If you repent and decide not to buy it, nothing will happen and you will only have paid a rent. As is logical, in case you have paid a signal and decide not to buy, you will lose the money of that signal, unless you reach an agreement with the owner.

3º. You guarantee that the price of the home will not go up (eye, or down), since in the contract the sale price is agreed for when the rental period passes.

4th You can save for mortgage expenses. . That money you save each month can be used to pay the mortgage expenses, which are around 12% of the sale price and almost no bank finances them. These expenses (notary, registry, agency, tax of documented legal acts …) will also be lower because the mortgage you need is less.

As you can see, the advantages are very attractive, especially for young people, who are the group with the greatest difficulty in accessing a home in Spain.

20
Sep

How to manage money in 5 lessons

Managing the money correctly is essential to enjoy good health in the family economy . Failing to do so means losing control of finances, ignoring daily money leaks and, in most cases, living beyond your means. This situation is unsustainable in the long term and can only lead to problems.

To avoid this, it is necessary to maintain a strict control of the domestic economy . If you still do not do it, you should start as soon as possible. Although there are endless ways to manage money, then we will share with you those that we believe are most effective.

5 ways to manage money

  1. Organize your savings plan.

In general, Spaniards do not save. And those who achieve it, save little. Most people receive income, spend and, if they have something left over, that is what they save. This way of saving is wrong and does not give good results.

It is more than proven that the best formula to save is what many call the “pre-savings” . In other words, save at the beginning of the month , that is, just enter the payroll. Do you enter 1,500 euros on the 1st of each month? Then order a 20% transfer to a savings account and forget about that money. Consider saving as the most important “expense” of the month.

  1. Control every euro that comes out of your pocket.

If you want to manage your money correctly, you have to control the leaks . We recommend that you use a small physical agenda to record each and every one of your daily expenses , however small and insignificant they may seem. Remember that one coffee per day at the bar , are more than 400 euros a year.

You can also use mobile expense management applications , such as Spendee . These are very useful because they allow you to create several categories, include each expense in the corresponding category and obtain statistics of segmented expenses.

  1. Pay cash whenever you can.

You must avoid financing . If you can not pay a certain product in cash, maybe it’s because you can not really afford it. People tend to bring money from the future (debt) to pay for things of the present. It is much smarter to save in the present to buy in the future. It is also cheaper, since you avoid paying interest, and avoid problems and headaches.

  1. Do not depend economically only on a third party.

Relying on a single salary paid by a third party is usual. However, it is tremendously dangerous. What if one day you decide to dispense with your services? What if the company closes? What if they reduce your salary? You must have several sources of income and go increase the number progressively, as you can.

In other words, it is better to enter 2,000 euros per month from four different sources (500 euros per payer) than from one single source. If you lose one of the four payers, you will only stop paying 500 euros. But if you only have a single payer, the problem is obvious.

  1. Increase your knowledge

If you want to properly manage your assets, you have to learn economics. To achieve this, read books, attend talks, listen to podcasts, interact with people who contribute, read blogs … You have to increase your knowledge if you want to learn to make good decisions. Do not delegate that responsibility to an advisor. Be yourself who makes the big decisions.

If you put these five lessons into practice, you will manage your money in a much more efficient way. Get your batteries started, start as soon as possible and tell us your advances!

19
Sep

How to choose the best payroll account in the market

With the profitability of deposits in the ground, most financial institutions are concentrating their efforts to attract clients for their payroll account. To achieve this, they offer collection gifts, discounts on receipts, zero commissions or cheaper loans. Anything goes in the open commercial war between entities to win customers.

Clearly, this situation benefits the clients themselves, who have a huge range of payroll accounts to choose from. Such a broad offer allows the user to find the payroll account that best suits their needs and which generates the greatest benefits. But how can we choose the best payroll account in the market without fear of making a mistake? We give you some ideas.

What you have to keep in mind to choose the best payroll account

payroll account

1º. Visit the websites of the different banks, but do not just look at their offer of payroll accounts. Take a look at what that bank is like in general, what other financial products it has, what its mortgages are like, what its clients say … The objective is that you form a global idea about each entity so that you can discard those that do not suit your needs. lifestyle or your future pretensions.

2º. Study the degree of digitization of the bank. In the future, all banks will be digital, so it is important that the entity with which you hire the payroll account has a good foundation in the online world. Make sure you also have a good mobile app because almost all the procedures you will end up doing from the phone.

3º. Review the commissions. You can save a lot of money over a year if you do not pay bank fees . As attractive as a payroll account may seem, if it hides maintenance fees, commissions on transfers, and income or commissions on credit cards, it is no longer as attractive. Online banks do not usually charge commissions.

4th Check the ATM network . One of the things you will do most often is to go to the ATM to get money. That is why it is important that you make sure that the chosen bank has a wide network of ATMs from which you can withdraw cash without commissions. If you also have agreements with other entities so you can withdraw money at your ATMs for free, an extra point.

5th Make sure you have good customer service . In these times, it is fundamental that the entity has a multi-channel customer service system: via telephone, by email, through the app, through social networks … The more contact forms it offers, the better for you.

In short, it is not only about finding the payroll account that offers the best numbers, but also the one that best suits your case and the one that provides the most guarantees for the future . An ideal payroll account would be that of a bank with a hundred percent focus on the online world, with no commissions of any kind, with a wide network of own ATMs and with a complete customer service.

19
Sep

How to choose the best payroll account in the market

With the profitability of deposits in the ground, most financial institutions are concentrating their efforts to attract clients for their payroll account. To achieve this, they offer collection gifts, discounts on receipts, zero commissions or cheaper loans. Anything goes in the open commercial war between entities to win customers.

Clearly, this situation benefits the clients themselves, who have a huge range of payroll accounts to choose from. Such a broad offer allows the user to find the payroll account that best suits their needs and which generates the greatest benefits. But how can we choose the best payroll account in the market without fear of making a mistake? We give you some ideas.

What you have to keep in mind to choose the best payroll account

payroll account

1º. Visit the websites of the different banks, but do not just look at their offer of payroll accounts. Take a look at what that bank is like in general, what other financial products it has, what its mortgages are like, what its clients say … The objective is that you form a global idea about each entity so that you can discard those that do not suit your needs. lifestyle or your future pretensions.

2º. Study the degree of digitization of the bank. In the future, all banks will be digital, so it is important that the entity with which you hire the payroll account has a good foundation in the online world. Make sure you also have a good mobile app because almost all the procedures you will end up doing from the phone.

3º. Review the commissions. You can save a lot of money over a year if you do not pay bank fees . As attractive as a payroll account may seem, if it hides maintenance fees, commissions on transfers, and income or commissions on credit cards, it is no longer as attractive. Online banks do not usually charge commissions.

4th Check the ATM network . One of the things you will do most often is to go to the ATM to get money. That is why it is important that you make sure that the chosen bank has a wide network of ATMs from which you can withdraw cash without commissions. If you also have agreements with other entities so you can withdraw money at your ATMs for free, an extra point.

5th Make sure you have good customer service . In these times, it is fundamental that the entity has a multi-channel customer service system: via telephone, by email, through the app, through social networks … The more contact forms it offers, the better for you.

In short, it is not only about finding the payroll account that offers the best numbers, but also the one that best suits your case and the one that provides the most guarantees for the future . An ideal payroll account would be that of a bank with a hundred percent focus on the online world, with no commissions of any kind, with a wide network of own ATMs and with a complete customer service.

15
Aug

5 interesting investments you can make this year

This year is still very good for investors. Despite the low-interest rates , the recent rate hike in the United States has encouraged the markets, which are generally offering good returns. That’s why today we want to talk to you about interesting investments you can make this year.

According to the experts, the keys to a good investment strategy for the remainder of the year are three: first, seek security and not risk too much; second, diversify money; and third, to have the sights in the long term to avoid the vagaries of the market.

The current offer of investment products is very broad but we are left with the following options.

Interesting investments: our recommendations

1º. Equities

There is an unwritten rule followed by many investors according to which the percentage of money that you should invest in equities is obtained by subtracting it from your age. So, if you are 30 years old: 110 – 30 = 80. That should be your investment percentage in equities.

Equities are showing good results in 2018 on all global stock markets. Although there is currently a lot of volatility in the short term, if the economic situation accompanies, it can offer good investment results.

2º. Foreign exchange.

Investing in currencies is always risky, but the benefits can be high if you are willing to take certain risks. The uncertainty surrounding the possible exit of the United Kingdom from the European Union (EU) and the conflicts in the Middle East are the two most relevant factors to take into account if you want to invest in foreign currency. Among all of them, the dollar is the safe haven and is usually high against the main world currencies.

3º. Real estate.

Investors with enough savings can invest in the real estate sector . The price of the house rises without considerations in practically all the cities of Spain , reason why to acquire a property with the objective to allocate it to the rent can be an interesting option of investment. This investment is more profitable in large cities and coastal areas.

4th Cryptocurrencies.

After the boom of Bitcoin, the most famous cryptocurrency of all, many investors deposited their savings in digital currencies . The key to making a good investment lies in studying which company or project is behind each cryptocurrency. There are many valid options for all tastes, such as litecoin, dashcoin, holo, cardano or tron , but with all you have to assume a great risk given its totally speculative nature.

5th Gold.

Gold has always been a good refuge value for money . Last year its profitability was close to 12% and the value of the ounce exceeded 1,300 euros. The upward trend has slowed down in 2018 and its value has fallen a bit in recent months, so if you are willing to take certain risks, gold offers a good chance of profitability in the final stretch of the year.

Other interesting investment options are P2P loans (for example, mortgage loans). And if you do not want to take risks, the fixed income market is one of the safest, but also unprofitable.

15
Aug

5 interesting investments you can make this year

This year is still very good for investors. Despite the low-interest rates , the recent rate hike in the United States has encouraged the markets, which are generally offering good returns. That’s why today we want to talk to you about interesting investments you can make this year.

According to the experts, the keys to a good investment strategy for the remainder of the year are three: first, seek security and not risk too much; second, diversify money; and third, to have the sights in the long term to avoid the vagaries of the market.

The current offer of investment products is very broad but we are left with the following options.

Interesting investments: our recommendations

1º. Equities

There is an unwritten rule followed by many investors according to which the percentage of money that you should invest in equities is obtained by subtracting it from your age. So, if you are 30 years old: 110 – 30 = 80. That should be your investment percentage in equities.

Equities are showing good results in 2018 on all global stock markets. Although there is currently a lot of volatility in the short term, if the economic situation accompanies, it can offer good investment results.

2º. Foreign exchange.

Investing in currencies is always risky, but the benefits can be high if you are willing to take certain risks. The uncertainty surrounding the possible exit of the United Kingdom from the European Union (EU) and the conflicts in the Middle East are the two most relevant factors to take into account if you want to invest in foreign currency. Among all of them, the dollar is the safe haven and is usually high against the main world currencies.

3º. Real estate.

Investors with enough savings can invest in the real estate sector . The price of the house rises without considerations in practically all the cities of Spain , reason why to acquire a property with the objective to allocate it to the rent can be an interesting option of investment. This investment is more profitable in large cities and coastal areas.

4th Cryptocurrencies.

After the boom of Bitcoin, the most famous cryptocurrency of all, many investors deposited their savings in digital currencies . The key to making a good investment lies in studying which company or project is behind each cryptocurrency. There are many valid options for all tastes, such as litecoin, dashcoin, holo, cardano or tron , but with all you have to assume a great risk given its totally speculative nature.

5th Gold.

Gold has always been a good refuge value for money . Last year its profitability was close to 12% and the value of the ounce exceeded 1,300 euros. The upward trend has slowed down in 2018 and its value has fallen a bit in recent months, so if you are willing to take certain risks, gold offers a good chance of profitability in the final stretch of the year.

Other interesting investment options are P2P loans (for example, mortgage loans). And if you do not want to take risks, the fixed income market is one of the safest, but also unprofitable.

24
May

Instant Approval Credit Cards — Three Terms To Look For Once You Apply

There are numerous different kinds of instant approval credit cards – yet only one will be the best matchup for your needs – and desires

For instance, if you fly a great deal, then you will probably want a good air miles credit card since it will result in savings on your flight tickets and can even get you some totally free flights, after a while. If you generate all the time and stay in resorts, then you probably want whether gasoline card or a resort card, that will allow savings for the travel expenditures. Figure out your own biggest costs each month trying to get a card that will provide you with the most savings in that region. Regular purchases, like household goods, prescriptions, and gas, may also get you a 1 in order to 3% savings on a few credit cards, too.

If you are the resident of the USA and therefore are looking for a payday loan, you can utilize online to direct cash lenders and they will help you- American Home-equity-loans. The majority of the times if you are the first-time candidate, they also give you a free payday loan without charging any costs. The only thing is you should know where to locate out the deals.

If you hold off upon redeeming your cash-back prize until you have $200, Pursue will give you a $50 reward. This in effect boosts your cash-back rewards in order to 3. 75% and 1 ) 25%. Finally, as a small extra one-time bonus, Pursue will throw in $50 once you have made your first purchase employing this card.

It’s also very protected to apply online for a charge card approval it is guaranteed that in case you fill out a credit card application online using a bank’s secure software page, all your personal information cannot be stolen or damaged into.

Even if you possess paid your dues completely, your credit report will be valid to get a period of 7 years

Your credit rating will improve but the past background will not change things at wholesale prices. You need to build a positive credit score. One way is to use credit cards to rebuild credit. The lender will require you to deposit together with a sum of money and you will be permitted a credit limit ranging from one particular and a half to 2 times your own deposit. The transactions produced on this card will display on your credit report but no one will know your credit card is usually secured.

Use credit cards that will pay you – Find out cards are well-known for his or her cash back bonuses. They provide you with 5% in many groups such as travel, gas plus groceries. Capital One has the no-hassle cash rewards credit card too which offers 2% regarding gas and grocery buys and 1% on other purchases. Chase rewards plus Citi cash returns also provide cash back for purchases. To find out more about cash credit cards for excellent credit, observe e-wisdom.

This is actually the first and most important action to take when you have a money rebate offer. In fact, in case you generally have a steady stability lingering on your card, you need to strongly consider looking for other options. Intended for high balances, a low rate of interest will help you more than the extra benefits promised in a card.

When it comes down to getting a perfect card, I would recommend both of these points. As long as you know what you need, and you’re educated with regards to secured cards, you shouldn’t find it difficult finding one.