How to adapt to a sudden loss of income? – Apply for a loan now!

 Causes of loss of income

Causes of loss of income

Whether you are an employee on a permanent contract, an employee with a fixed-term contract (CDD) or that you multiply more precarious contracts (such as temporary work), no one is immune to loss of income sudden.

Because of an economic layoff, an accident or even, in a less dark register, a professional retraining, your income can suddenly change. Whatever the reason, the result is as follows: you will have to deal with a reduced budget in the coming months. Don’t panic, take a look at your finances and study together the solutions to reduce the impact of this loss.

What methods are available to you to compensate for a loss of income?

What methods are available to you to compensate for a loss of income?

First step, faced with a loss of income, learn about your rights. Depending on the source of the loss, you may be able to benefit from state aid. If you are sick, it will be Social Security benefits, if you are dismissed, unemployment benefit…

The only downside of these aids: like any administrative process, they require the creation of files. They can therefore take up to several months to be processed. Be aware that in most cases, the date of the first filing will be taken. You will therefore be reimbursed the amounts due to you during the processing period.

How to reduce expenses to a minimum?

How to reduce expenses to a minimum?

Besides aid, it is expenditure that must be tackled. It is important to reduce them, in order to adapt them to your new income. Many organizations have programs designed to accommodate clients in financial difficulty.

Contact your creditors. With a certificate proving your situation, EDF offers, for example, a First Necessity rate. Even if you do not think you can get a reduction in your charges, it is always good to keep creditors informed during financial difficulties.

They will be all the more inclined to grant you payment terms if you do not put them before the fait accompli. Here are some expense items that you can easily reduce:

  • Credit monthly payments. If you have a loan in the process of being repaid, you can renegotiate it and reduce your monthly payments. You can also consider consolidating credits and completely reschedule your repayment. Certain contracts allow the repayment to be paused and to be shifted accordingly for one month or several months;
  • Reduce your daily expenses. You will not be able to stop eating, of course, but you can for example consider stopping a satellite TV subscription, or reduce your consumption of video games, or even music or cinema offers. A good opportunity to find offers at lower prices, sometimes with better value for money;
  • Talk to your banker. Your financial advisor can suggest specific solutions to make up for your lack of income. He can increase your overdraft or offer you a bank card suited to your needs.

How to anticipate a possible loss of income?

How to anticipate a possible loss of income?

We have seen the solutions to act after a loss of income. It is also possible to anticipate these difficulties. If you cannot foresee an illness or a job loss, you can however take some security measures today as far as your finances are concerned.

Establishing a budget for each of its monthly expenses and recording its expenses is therefore a step in the right direction. This eliminates any unnecessary purchases and takes stock of its resources.

Thanks to this clear vision of your budget, you will be able to reserve part of your income to place it on a savings product and avoid overdrafts. Even if you manage to save only a few USD every month, they will be available in the event of a hard blow. Finally, limit your debt and for each of your credits remember to check the extent of your insurance. There are no small savings.

Last straight line to renegotiate your mortgage.

With interest rates starting to go up, it’s time to renegotiate your mortgage to try to save a few USD or even a lot more.

The art of negotiation

The art of negotiation

It had to happen. Real estate interest rates have started to rise. And for those who have not yet done so, it is high time to embark on a renegotiation of your mortgage.

The rates remain very low and, for many loans, the game is always worth the effort. Over 10 years, rates are still around 1.1%, 1.3% over 15 years, 1.6% over 20 years and do not exceed 2% over 25 years.

Expect difficult negotiations, however. Few banks accept to reduce the interest rate on an already negotiated loan. You will surely have to make an effort to get a drop other than symbolic. Generally banks appreciate a long-term commitment, such as taking out a home or auto insurance contract, or even life insurance.

But if you see that the negotiation is blocked, do not hesitate to play the competition and to consider a repurchase of credit, even if it is to be assisted by a broker.

Beware of fees

Beware of fees

To be sure of making a profitable transaction, you will need to integrate the various costs involved in a credit buyout. Between the prepayment penalties, representing 3% of the principal remaining due, but limited to a maximum of 6 months of interest, the cost of the guarantee on the new loan and the possible handling fees, we generally consider that the rate spread must be at least 0.7%.

The repurchase of credit should only be chosen if you plan to keep your property for several more years, and if the capital remaining due is at least $ 70,000. The more recent your credit, the more advantageous the operation since the first repayments carry the most interest compared to the principal.

For those who have borrowed since 2012, the savings could amount to several tens of thousands of USDand some are already in their second or even third renegotiation.