Archive February 2019

What is loan portability and how does it work?

Have you ever stopped to think about how good it would be to pay lower interest rates? Even smaller than today’s in your loan or financing agreement? With loan portability this becomes possible as well as super practical.

But what is portability loan really?

 

Loan portability is a kind of extremely advantageous operation. The problem is that nowadays it is very little used. It can be done by anyone, whether legal or physical. But it must be through cancellation of the contract, as well as discharge of the debt with the bank in which it was made.

Currently the rules of portability of loans were made by the National Monetary Council. He established them in 2013. When this idea was created, his goal was to stimulate competition and also to reduce interest in banks. This happens so that the consumer can transfer his debt between banks, looking for what else is advantageous.

But how does this work in practice?

But how does this work in practice?

 

A lot of people still do not know how loan portability works in practice. And without understanding the possibility of passing a debt to another bank. This allows you to pass your debt to some bank that has lower interest rates.

Among the main reasons for the customer wanting to change banks, no doubt is the quality of service. In other words, the service and the more attractive conditions, in particular the lower interest rates, are what most calls attention.

To be able to do this, the contractor must send to the bank where the loan was made the full amount of what is owed, removing the debt in advance. This causes the debt to be paid without interest. Who will pay this is the new bank, which will take the credit.

The current bank will be completely responsible for making a new contract. In this new loan only the interest rate can be changed. All payment terms, as well as the value of the transaction, will be maintained.

This portability is generally allowed for several lines of credit. These lines are granted to individuals, such as credit card, car financing, special checks, personal loans, payroll, and some other lines.

What people can do this portability of credit?

What people can do this portability of credit?

 

Any contractor who is a natural person with a current contract in which he or she has contracted the loan in one of the several financial agencies that are part of the SFN, the National Financial System. In cases of leasing contracts, it is necessary to respect the deadline established in the contract, before making the portability operation of the loan to any other bank.

How can I make payable loan portability?

How can I make payable loan portability?

The first thing to do is go after information about the contract that was made. This information regarding the operation to be requested is: the contract number, a statement of the evolution of the balance, the current balance, the annual interest rate, the total term, which payment system was used, the amount of the installments and the date of their expiration.

The financial agency has the obligation to provide the information due within a period established by law. If she refuses, the client can go to the Central Bank ombudsman’s office and register the appropriate complaint. All banks are, by law, required to accept any application for loan portability.

What are the costs of portability?

Portability is not charged for fees, except for real estate or leasing. However, the bank may charge a fee to make the registration in order to start this new relationship. The process can be canceled at no cost by the customer at any time. In other words, you can do this if there has been no money transfer between banks.

Advantage of concentrating your debts

Advantage of concentrating your debts

If a pensioner, retiree, or public servant has many outstanding debts and contracts, it is best to centralize them. Portability is an appropriate tool right now as it encompasses all debts, helping you to control your budget better and create greater visibility into the financial transactions that are taking place.

Now you already know how this portability works, and what are the main advantages that it offers! In addition to having your debts all concentrated in just one location, you can get friendlier rates, and ultimately pay well less than you were paying before.

But to be able to do this in a safe way it is good to know thoroughly about every detail and how the loan portability really works and revolves, all so you can organize yourself financially to receive this new account every month, time to pay your dues.

 

Fast personal loans vs. payroll loans

It is very important before requesting fast personal loans to know what is the option according to our needs. It is generally believed that payroll loans are cheaper than personal loans, however this is not always the case. In the following article we tell you more. The key? Compare the characteristics of both.

If you have been thinking about applying for personal loans fast, you have asked yourself which is the most convenient. The Bank of Mexico has put into operation at the beginning of June a tool that allows a correct decision to be made when comparing payroll and personal loans.

The first ones are granted to those workers who receive their salary through a payroll account in a financial institution. The main advantage is that the entity directly withdraws the amount of the fee when the employer disperses the payment. This type of credit represents a quarter of the total consumer loans in our country.

On the other hand, personal loans can be granted to any person, regardless of whether or not they have a deposit account in the bank where it is requested. The risk in these cases is greater for the financier because it does not have a guarantee to back it up. Likewise, 20% of Mexicans who apply for loans do so through this financing model.

According to the tool created by Banxico called Analysis of Credit Indicators, the average interest rate of personal loans granted by regulated institutions in the country is almost 36%. In some cases the interests are abusive and can reach 102% per year.

At the close of the first semester of 2017 in the country there were 6.3 million personal loans in force (for a balance of approximately 97 billion pesos). On average, each loan is 20 thousand pesos and the repayment period is around two years.

Do we lend personal or fast payroll?

 Do we lend personal or fast payroll?

Regarding payroll loans, Banxico indicates that the average rate in this system is 25%, although there are other more expensive ones that reach 37% and more economical than 10%. In the first two months of 2017, 2.5 million payroll loans were in force, for a balance of 138 billion pesos. The average motorcycle is 65 thousand pesos and the period of almost 4 years (42 months).

This tool helps us make a decision because it provides all the information related to the types of credits available in the market today. Greater transparency, fair competition and more benefits for users are other advantages.

The Analysis allows analyzing different variables related to credits such as interest rates, credit amounts and terms. It also helps us compare the services of different institutions.

It is generally believed that payroll loans are cheaper than personal loans but this is not the case in all cases. In addition to the Banxico tool, the public has at its disposal the Bureau of Financial Institutions.

That a credit has a lower interest rate does not mean that it is paid less when it is finished, since other variables such as commissions, insurance costs, clerk value, etc. must be considered.

Find quick personal loans according to our needs is essential. Maybe when we do not have a lot of time to make the decision we do not analyze all the variables. Therefore it is important to be aware of what happens in the financial world when we are not in economic trouble. Check online credits on our site.

Borrowing money is not a bad thing?

Borrowing money and taking loans today is a very common practice. Lots of people of all ages decide to borrow money from different people or institutions. Borrowing money is not a bad thing, because it can contribute to many good things for the borrower. People who have a great business idea but do not have money lend it and thus have a chance to achieve financial success. There are also people who decide to take consumer loans and this is not bad either.

Problems with repaying the loan

Problems with repaying the loan

However, problems can begin when the borrower has a problem with regular repayment of the loan or when he is late in returning the debt. There may be different situations in life, sometimes a person may get injured, he may get ill, or he may fall into financial problems as a result of wrong decisions. However, if he borrowed, he is forced to pay it off, although it will be very difficult during problems.

When will the knock on the debtor’s door?

When will the bailiff knock on the debtor

If the creditor sees that the debtor is late in repaying the loan, he most often decides to admonish him by means of registered letters, e-mails, by attempting to contact the telephone. At this stage, there is no question of the intervention of the bailiff. If the creditor does not obtain the intended effect, ie the return of the amount due, or some debtor’s declaration that the debt will be repaid, he may apply to the debt collection agency. The company starts its activities, trying to encourage the debtor to pay the debt. The debt collectors operate in various ways. They send letters of recommendation, with time the letters are full of certain scarers, for example, that the case will be reported to the court. However, at this stage, the bailiff will not visit the debtor.

However, if the actions of a debt collection company do not bring any results, if the debtor does not want to negotiate or avoids contact with the debt collector or with the creditor, a decision on filing a lawsuit may be made. In this situation the court will deal with the matter most often within a few days. After issuing the decision that bailiffs must be executed, the bailiff enters the game.

However, it is worth knowing that the bailiff does not immediately come to the debtor’s house. First, he tries to contact the borrower. The first steps of the bailiff’s action are execution at a distance. The bailiff usually owes the most debt due to the debtor’s remuneration, pension or old-age pension. The bailiff can take over the debtor’s bank account. The next step is to occupy the property and real estate, but at this stage the bailiff also does not have to come to the debtor’s house. It is enough that he will cooperate and write a statement about his possessions.

A bailiff’s visit to the house takes place if all of the above activities do not work. It’s worth being aware that a bailiff’s visit at home is really the last resort. It usually does not happen to her. The bailiff’s offices most often try to contact the debtor by letter.

What about the visit?

What about the bailiff

 

If the bailiff already knocks on the door of the debtor’s house, it is worth not to create a problem and submit to his actions. He has many rights, including the possibility of seizing a large part of the borrower’s assets, which he did not repay. In case of troubles with the debtor, the bailiff can come next time with the police, and the cost of this intervention will be covered by the debtor.

Avoiding a bailiff’s meeting is also not a good idea, because in extreme cases the bailiff has the right to come with a locksmith who will open the door. In principle, the bailiff can come to the debtor’s house at any time of the day, even in the middle of the night. Of course, such cases are extreme, but they are possible if the debtor avoids cooperation very much.

Can you give the debtor peace?

 

In very special cases, during the bailiff’s execution, it may happen that the bailiff will withdraw from the enforcement of the debt. If the debtor is in a very difficult financial situation, no job, no sickness, no valuable property and no money on the bank account, the bailiff may abstain from his execution activities. Such a situation will of course not result in the liquidation of debt. The creditor will be able to file a debt application again within ten years if the borrower’s financial situation improves.

Summary

Remember that the bailiff’s visit to the apartment is really the last option in the debt recovery process. The best option is, of course, reaching out to the debtor with the creditor, spreading the installments, postponing the repayment date. It’s good to work out a compromise. In the case of extremely unwilling debtors, there may be a lawsuit and after some time the bailiff can visit such a debtor. However, since the initiation of the enforcement procedure, the bailiff’s visit is really long. It can be estimated that from the time of late repayment of the loan or loan, it may take 3 – 4 months for the bailiff’s visit. Of course, this is not a rule, this time may be slightly longer or slightly shorter.