Inform yourself how to prepare for a loan. Why is it important to start saving as soon as possible? Are you creditworthy? Are you ready to set aside the future amount of the monthly installment every month? Read on.

True story We would like to share the experience of a young married couple who are currently renting. They found a house they really like. The purchase is financed by a loan. The house needs to be fully adapted. The adaptation also requires a loan. The loan is needed for furnishing the house and for other expenses such as taxes and fees of the public notary. Our couple has higher income than the average, so without a check with a banker or credit broker, they consider both of them to be creditworthy. They enter into the purchase without any savings. Higher income is not enough for creditworthiness Banks, in order to assess creditworthiness, check not only income, but also employment status, employer of the potential loan recipient, number of dependents, regularity in fulfilling existing credit obligations, obligations in the capacity of executor or surety. Banks also check overdrafts on current accounts, allowed credit limits on cards (not just the amount used) and liabilities on revolving cards. The bank also takes into account your needs. In our example, the clients need a loan for buying and adapting a house, and for furnishing and paying off other expenses. Preparation for a loan In the example of our clients, it is not easy to manage the financing. The banks only approve a loan in a smaller percentage in relation to the estimated value of the property (up to 20%). Since the clients have no savings and no financial plan, and with their current excessive spending, they must postpone buying the property. How you can prepare yourself for a loan: • If possible, start with targeted saving right away, never too late. Targeted saving is to set aside part of your income over the next 6 months, so you will have at least a part of the funds that will help you simplify the costs related to buying a property (contribution, advance payment). • Check your personal budget, what you spend the most on, can you reduce your spending? • Start already saving funds for the amount of the annuity or rate of the loan. • Check your creditworthiness with a banker or credit broker before starting to look for a property. Define your budget for the property on time. Follow our posts to inform yourself about all the steps to a loan, which include good preparation and financial planning. Author: Martina Mataić Škugor Credit brokerage operation

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