MonthOctober 2019

Bank Equatorial Loan

Relieved by the pressure on me, I finally write about the Equatorial Loan of Pabest Bank. ?

This is a mortgage-based loan that can be used to buy a home, use it for free or buy a loan.

The big thrust of this is that the balance of your bank account opened with you is deducted up to a maximum of 70% of your loan’s current principal, so you only have to pay interest on the balance.

If you have a $ 10 million loan and a savings of $ 6 million, then the interest is calculated at only $ 4 million. Nevertheless, the normal monthly repayment is deducted and every six months the difference is accounted for so that the lower capital debt decreases the maturity rather than the monthly repayment.

This way, if you have enough savings in your account

This way, if you have enough savings in your account

Your maturity can be significantly shortened, which means you will have to pay less interest overall. (Logically).

In fact, if your payment arrives here, it will also reduce your monthly repayment until you spend it. (They look at your account balance on a daily basis.) True, for a ten million loan, a $ 200,000 payment only reduces the cost of the loan by 0.11%.

Who can benefit from this construction?

Who can benefit from this construction?

You might want to think about this arrangement if, for example, your income is not even because you have, say, a business. In such cases, we do not dare to commit to a higher fixed repayment and the shorter maturity involved. However, with this arrangement, you will be reduced in interest charges if the store is going well.

In the other case, we keep either the amount corresponding to our standard six-month living and the emergency reserve in this account, or other liquid resources that may be needed at any time, for example, in our business. With this method, we have not stripped off our trousers in a material sense, yet we do not have to pay the interest on the loan on our existing money.

It’s a little trick


The calculator on the Bank of Pabest page will be happy to calculate how much you will gain with the Equatorial Credit. If we borrow $ 10 million but have $ 4.5 million in our current account, then a 10-year loan will have 26 months of maturity and the APR of your loan will be only 3.44%.

Too good to be true? Well, yes, the calculator doesn’t count on the fact that we could invest that $ 4.5 million elsewhere, say at 5% interest. That’s why only such a fabulous THM value can come out. Because it projects interest on the total amount and forgets that the equity would be remunerated elsewhere, so you would not have to calculate a 0% return on equity.

Is it worth it?


As we have seen, product flexibility comes in handy in many cases, but how much do we gain from a competing offer?

At present, Pabest Bank offers a 6 month BUBOR + 4.65% home loan. (BUBOR is the interest rate on the interbank market, which is strongly linked to the central bank base rate.)

That is, the APR is currently 8.15%, which is recalculated every six months to reflect any changes in interbank rates.

For the sake of illustration, a competing bank can obtain the same home loan at a APR of 6.2%. (In case of a good debtor client.)

With these interest rates the monthly repayment of Pabest Bank will be HUF 84,579, the total interest expense over the term of HUF 10,299,188.

The competing offer is US $ 72.80 per month, with a total interest cost of US $ 7,472,405.

In other words, if you take a $ 84,579 repayment at a cheaper bank, we will pay off your credit in 15 years and 3 months, and your total interest expense will be only $ 5,485,582.

To achieve the same result, we need to keep 1.7 million in our Pabest Bank account! In this case, the two offers would be the same. And we haven’t talked about borrowing with that 1.7 million more than the competition, that is, it would be cheaper again, maybe with a 5% interest rate, our money would be $ 85,000 a year (before tax).

Cash or mortgage consolidation loan – comparison

Deploying your debts is a reasonable solution for people who are unable to pay all debts in a timely manner. So how do you decide on a cash or mortgage consolidation loan and what conditions must be met to get a positive credit decision?


Cash or mortgage consolidation loan – what is worth knowing?

Cash or mortgage consolidation loan - what is worth knowing?

Credit consolidation is a reliable help when the conditions of our current debt cease to be favorable for us. This may be due to the deterioration of the financial situation or reduced interest rates compared to the period when we took out the loan. For people who have fallen into a spiral of debt, a cash or mortgage consolidation loan is a great help. Combines all debts into one liability with a lower interest rate, with a reduced installment and one payment date. Reducing the amount of the monthly installment results in extending the loan period, and thus increasing the total costs of servicing the loan. Before we decide on a consolidation loan, the whole procedure will be preceded by a creditworthiness analysis – a positive credit decision means that the liabilities transferred to another bank can be repaid.


Mortgage or cash consolidation loan – what to choose?

Mortgage or cash consolidation loan - what to choose?

We divide consolidation loans into two categories – cash and mortgage. The cash consolidation loan has a low interest rate as in the case of other cash liabilities. However, the loan period is getting longer. In addition, the consolidation cash loan is not charged with an overpayment or early repayment fee. It has no real estate collateral and the repayment period can be extended to a maximum of 144 months.

A consolidated mortgage loan also has a low interest rate. This is associated with a high price for total costs, which are unavoidable with approximately 30 years of liabilities additionally secured by the property. In addition, with a mortgage consolidation loan, it is worth remembering a possible early repayment commission that applies during the first years of lending. You should also add other costs related to starting the consolidation – a fee for the valuation of the property, for re-entering the mortgage in the land and mortgage register, and a commission that the bank may charge when starting a new loan. Regardless of whether you decide on a cash or mortgage consolidation loan, it is good to get familiar with the current financial situation in advance and use e.g. the creditworthiness calculator.


A positive credit decision and a favorable solution

A positive credit decision and a favorable solution

Loan consolidation is an ideal solution especially for people who know that in the near future they will not be able to cope with regular repayment of all their liabilities. The procedure is not complicated – the most important is a positive credit decision , thanks to which we will be able to spread the repayment over a longer period and on more favorable terms. Therefore, it is worth analyzing your financial situation in advance and focusing on the solutions offered by a cash or mortgage consolidation loan .

Cash loan insurance

Bank customers often wonder if cash loan insurance is profitable. However, they rarely really know what such insurance guarantees and how much it costs them. Banks very often either have compulsory insurance on their cash offer or voluntary insurance, but in the latter case, often using insurance results, for example, in lowering the margin or commission. Here you will find a cheap cash loan ranking check before you choose a loan for yourself.

Banks encourage their clients to take out credit insurance suggesting that in case of illness or financial difficulties, the insurer will help repay the loan. Is it really true though?

What is cash loan insurance?

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Credit insurance is to be the bank’s collateral in the event that the borrower is unable to repay the liability. These are situations that are independent of the borrower, such as serious illness, death or job loss. This is our insurance, but it will mainly protect the bank’s interests.

However, we should remember that the insurer will not allow himself an unjustified claim, and this will be when our illness does not cause full disability. Insurance is a good insurance in case of death. It is not about the fact that if we die, we should take care of posthumous repayment of the loan. The point is that our debts are inherited by our heirs, so such insurance will protect our loved ones from the unpleasant situation in which they will have to pay our debts. When deciding to buy insurance only because the bank offers us a lower margin or commission in return, you need to think about whether the insurance costs will be greater than the profits generated in this way.

General insurance Conditions

General insurance Conditions

Before signing the loan insurance agreement, let’s get acquainted with the General Insurance Terms and Conditions, because they are an integral part of the agreement or policy. The general terms and conditions of insurance contain all information regarding each situation that will be subject to the insurance claim. Insurance against loss of life usually excludes the situation of suicidal death, but also as a result of driving a car under the influence of alcohol or intoxicants or without a valid technical inspection or even without a permit. It also excludes the situation of loss of life as a result of not following the recommended treatment, i.e. by euthanasia.

Insurance against job loss reserves the situation of loss of employment through your own fault. It follows that the loan is not insured if the contract is terminated by the borrower or by mutual agreement of the parties. Only a situation in which the employer dismisses without giving a reason or as a result of a reduction in full-time jobs is subject to such insurance. Health insurance also has a lot of exclusions. As a rule, each insurer gives a list of diseases that you need to get sick for the insurance to work and, unfortunately, these are the most serious diseases known to medicine.

How Much Money Should You Earn $ 1,000 Per Month In Passive Income?

Passive Income is a type of income that does not need to work in theory, because the money or the work done in the short term makes money for you. Types of passive income are varied: rent, royalties, deposits, investments and even money lent to acquaintances or someone else. $ 1,000 a month in Latvia would be high enough because they are well above the average wage level. Such money can be earned on active income by working on a highly qualified or professional qualification. Can such a regular amount of money be earned through passive income? The answer is yes, but the type of passive income and the amount of money that circulates at this source of income are very important. So the differences are in the form of passive income sources.


The first could be the rental options

The first could be the rental options

Earning 1000 dollars a month with renting could be a very difficult task. If it is just one property, it must definitely be very valuable, but most likely it would be used by the owner himself or the customers would be wealthy to buy their own home. Thus, the more realistic option is for a landlord to own several apartments or other types of living space. Then the income would come from several tenants and could make up to 1000 dollars per month. Only this could be considered as a partially active job, as these living quarters must also be managed and depreciated over time.


The next type of passive income is royalties

save money

This income can be obtained, for example, from a written book. If it is actively purchased by people who want to read this work, it is possible to earn money by writing books. Only book sales will never be stable, as this product will no longer be up to date and the writer may have to work on a new job. Depending on sales, $ 1,000 is a real income option. But here is the problem of the irregularity and quantity of income. This would certainly not be the safest option for passive income.


A savings deposit is much safer

A savings deposit is much safer

This deposit is the transfer of money to the deposit account and the receipt of income from the interest calculated from the size of the investment. The more money you invest, the higher your earnings. The interest rate is usually around 3-5%, which is obviously not very much. Taking into account the average interest rate of 4%, you can calculate how much money you would need to invest to get $ 1,000 a month. Such an interest rate would require $ 25 thousand. Such money is not pocketed by any consumer and it is not easy to earn that amount of money. However, if you are satisfied with this amount of income, this is the most reliable and stable source of passive income.


Another source of passive income is investment

Another source of passive income is investment

Investments pay around 5-10%. In terms of profit, this is a much more beneficial source of passive income for the deposit, but the investment also has a risk factor. Namely, the value of the company’s shares may fall and the money you invest is lost because these shares will no longer be sold at a sufficiently high price. The best option would be to invest money in stable and large companies with financial stability. Such investments would definitely pay off in the long run. The amount of money you invest depends on the investor, but to make the money really pay off and earn as much as $ 1,000 a month, you need a very large amount of money – at least $ 10,000.

Interesting proposition regarding cash loan


Cash loan

Cash loan

Today, the cash loan tempts nothing, after all the terms of the contract are attractive, so it is difficult to pass by indifferently. You have to know that every customer has their own expectations, it depends on him what offer he chooses. See for an example

There is a lot to choose from, namely a loan for any purpose, an overdraft facility and a credit card, which is also classified as cash loans. A contract is concluded with the bank, the person collecting the set amount becomes the so-called borrower, that is, he has his obligations, namely to regulate the entire debt within a specified period and under certain conditions. When this mature approach to the topic is guaranteed and complete satisfaction. It is recommended to analyze all offers and make the right decision.

These days are tempting when it comes to cash loans, because it is very popular for any purpose. It’s hard to go past him without comment because he has interesting conditions. The main thing here is that you do not need to explain anything, because you can allocate the funds to everything you like. Of course, when it comes to money, you should be aware that safety is the most important thing, which is why a blank promissory note, third party surety and insurance certificate. The latter is an additional argument for getting a loan, because the credibility of the customer in the eyes of the banking institution increases.

Loan purpose

Loan purpose

As everyone can use the loan for any purpose, seniors are also interested. The protection in this case is a certificate from ZUS and the last pension cut. There was not yet such a proposal that you could spend money on your dream trip or a general renovation of the apartment, I can do nothing but examine this offer carefully, because it is profitable. The credit card is also a tempting offer, ideal for those who prefer to protect themselves, freeze their funds so that they can be withdrawn without any problems if necessary. The protection for both parties is a certain limit, i.e. there is no such risk of debt.

When it comes to the cost of maintaining the card, they are really cheap, so virtually anyone can choose it. The cash loan has various grounds, namely you can use an existing account as in the case of a current account loan. In this case, the history is checked to answer the key question whether the client is reliable and does not hide any debts. If everything is OK, then the transfer is carried out.

Negative interest also on loans – is this really possible?

In the investment area, the horror version of negative interest rates is spreading to more and more investors. Due to the fact that the European Central Bank has reduced the key interest rates to exactly zero percent meanwhile, some banks are already beginning to demand punitive interest in the form of negative interest rates from their major customers for higher account balances.

What may become a kind of nightmare for investors, on the other hand, could of course lead to loan seekers that the banks may also rate there in the future, low interest rates. In fact, there is already an offer on the market from a well-known furniture retailer, which includes negative interest rates in the lending sector.

Pay installments and receive interest?

Pay installments and receive interest?

For many years, many German citizens have known that they have to pay interest on borrowing when they take out a loan or when they agree to installment payments. Now, however, there is the offer of a well-known furniture retailer, which provides quite offensive a so-called negative interest financing.

In concrete terms, this means that the customer must make a payment installment agreement with the dealer paying an interest rate of -1.0 percent, which in effect will receive interest at the rate of 1.0 percent. However, what initially looks like a low interest rate is in practice nothing more than a typical zero-percent financing, which is provided with a price discount of one percent.

This becomes clear when you take a closer look at the financial construction


In fact, when it comes to the credit of interest, in effect, the targeted percent, this is not from the lending bank, but instead the percent is paid in retrospect by the furniture retailer.

Ultimately, the negative interest financing is more about clever marketing, because ultimately there is a typical and in the past often criticized zero-percent financing behind.

Even though the furniture retailer’s offer is not really a loan agreement with negative interest rates, many consumers are still wondering if there can be “real” credit offers with negative interest rates in the near future.

Negative interest rates in the credit sector become reality in the future?

Negative interest rates in the credit sector become reality in the future?

Experts, however, assume that it is relatively unlikely that larger banks are actually not only lending for free, but also credit the customer interest.

This is supported, for example, by the fact that interest surpluses are one of the banks’ most important sources of income. However, if banks were to pay interest to the client not only for investments but also for loans, interest as a source of revenue would be almost completely eliminated. Therefore, even loan seekers should not necessarily hope for future lending rates on lending, but instead compare offers and, for example, conclude loans at lower interest rates of four or less percent.

Break up with him! He wants your money!

Even 1/3 of adult Poles are stuck in toxic relationships with banks that last for years! It is estimated that several dozen percent of personal account holders established many years ago (even a dozen or so years ago) agree to ill-treatment and put loyalty above common sense.

Bankers don’t even try to hide their intentions. They call their loyal partners without being beaten by “old package owners”. Being the owner of the “old package” usually means naively paying for things that have long been free.

10 things for which bank account customers overpay


Here is a list of only selected fees charged to the holder of the “old package” at one of the largest banks:

  1. for keeping the account – 6.90 PLN
  2. for access to the account via the Internet – PLN 2
  3. for a transfer carried out at a bank branch – PLN 5
  4. for a transfer via a telephone service – PLN 3
  5. for a transfer to another bank via the website – 0.70 PLN
  6. for modification of a standing order – PLN 4
  7. for changing an account from an individual to a joint one (and vice versa) – PLN 30
  8. for sending a reminder related to an unacceptable debit – PLN 30
  9. for a large-value transfer to an account in another bank – PLN 20
  10. finally: for changing the “package” to another (less expensive) – PLN 50

The most expensive promotion and “making the customer happy”

The most expensive promotion and "making the customer happy"

The above list could be longer. We know the case of a bank customer who was charged PLN 100 each year for a credit limit of several thousand (he never used it). The limit was pressed into a small print (when setting up an account). It was supposed to be for free. Indeed – he was, but only in the first year.

Later it cost the said PLN 100. Such an unceremonious “haircut” had to end in divorce with a big bang. The described owner of the “old package” completely gave up the services of the bank (it was a large, serious financial institution), and posted an entry on the network under the meaningful title “My most expensive loan in my life, which I never took”.

It also happens that even quite hostile account conditions are not given once and for all, and banks are trying to change them for … even worse. Customers (mainly holders of “old packages”) of one of the leading banks have just been informed about the changes planned for this autumn. The account maintenance fee will increase by PLN 1; you will have to pay PLN 3 more each year for a debit card; finally, the price is PLN 5 more, establishing a power of attorney in the event of death …

Take a divorce with your bank


Instead of waiting for the worst we advise you to change the bank (here you will find the most interesting bank account offers along with the ranking). Such a divorce is very possible and not difficult at all. We can transfer the account to another financial institution, or set up a new account in another bank, and the expensive “old package” simply cancel.

The ongoing “mobile revolution” (it has also reached banks) is a good time for such decisions. Banks offer not only free, but also “earning” accounts supported by smartphones (for example this proposal by mBank). It is worth analyzing the offers of mobile bills.