The rest to live represents the amount available to the borrower after deduction of his monthly loan payments. Depending on its size, the debt ratio is higher or lower. To illustrate this rule, let`s take the example of a single person who applies for a loan without contribution with a monthly salary of $1,500 and no savings. If the monthly payment is set at 500 euros, he still has 1,000 euros to live, a debt ratio of 27%. Your peace of mind to live is too small to borrow? Here are some avenues to explore to improve the rest. However, banks sometimes make an exception if your income is particularly high. In this case, exceeding your maximum debt ratio does not mean that you do not have enough rest to cover your basic needs. However, they do not tend to take reckless risks. Before granting you a loan, they will sift through your borrower file, including your peace of mind. It is the INSEE (National Institute of Statistics and Economic Studies) that calculates the average time remaining in France. In 2017, it was 410 € per CU (Consumption Unit).
On the other hand, a repurchase or consolidation of loans can affect the rest. This solution is mainly aimed at the borrower who needs to repay several loans (mortgage, consumer credit). The consolidation of loans is, in fact, a way to reduce the amount of their monthly payments by consolidating the maturities in a single interest rate. Through this operation, the borrower finds a greater peace to live. The rest of this pair will be 2,010 euros. As the name suggests, the rest of life refers to the money you can live with once you deduct the monthly loan payment and your other fixed expenses. It is therefore an indicator of the standard of living, expressed in euros. In other words, it is linked to the notion of unseizable bank balance (SBI) or the amount of the unseizable salary, set at 545.48 euros – indexed to the RSA – so that the natural or legal person can cover his vital needs in the event of seizure proceedings. The rest to live refers to the legal minimum required to manage daily expenses. This applies to sums intended to pay for food, transport, leisure, clothing, the EDF bill, rent or petrol. Unlike the debt ratio, the rest is not subject to a lifetime reference interest rate.
This is justified by the fact that it will necessarily depend on the level of income. The balance of a couple earning 5,000 euros will be proportionally higher than that of a single person, which is 1,500 euros per month. In other words, the lower the monthly income, the higher the living rate of the rest. So, when calculating the remaining life carried out by banks, the following formula is applied: monthly income – expenses. The rest for 4 people is then determined by dividing the result by the number of people who make up the household. If your bank account is seized, the bank will leave a minimum amount in your account: the unseizable bank balance (SBI). If you leave at least the SBI in your account, you should be able to do your grocery shopping. The amount of the SBI is €598.54, regardless of your family situation (for example, presence or absence of dependent children). As a result, it has a turnover of €1,300, from which its incompressible expenses must be deducted.
For example, if the latter is 500 €, then the rest to live is 2,000 € – 700 € – 500 €, which gives 800 € of rest to live. The rest to live is an essential criterion in your loan application. Indeed, it determines your ability to repay your loan while continuing to cover your daily expenses. How to calculate it? Is there a minimum of rest to live in? All the information in this article. We are back to more optimistic words! How much peace of mind does it take to get a mortgage in 2022? First, keep in mind that no law or regulation sets a specific amount or rate, as is the case with the expense rate. Your family consists of 3 people Allowances: 300 €. Cost: 1200 €. Total revenue – expenditure: 1100 €. Rest to live per person: 366 €. Important: It should be noted that the figures are only used as a basis for calculation and may vary from bank to bank, family to family.
By analyzing your banking movements, your savings, the bank can determine your peace of mind to live. For example, a credit institution may estimate that the minimum rest period for a single person is EUR 1300. Some banks may not include family benefits or taxes in their calculation. And to determine how much you can borrow, that is, your borrowing capacity, banks will take these two criteria into account. Unlike the debt ratio, however, the rest to live is not subject to a reference interest rate. And for a simple reason: it will necessarily depend on the level of income. A couple earning $5,000 a month has proportionately more rest to live on than a single person earning $1,500 a month. The rest to live should not be confused with the debt ratio. In percentage terms, the latter refers to the maximum share that the terms of your loan must represent in your monthly income.
For the bank, it`s about making sure that the money you can still live with after paying your monthly payments is enough to allow you to support yourself properly – and therefore not risk defaulting. For you, because it allows you not to put yourself in a situation of over-indebtedness. Papernest accompanies you to get the best possible loan according to your peace of mind Nevertheless, be careful not to negotiate a debt ratio too high. No one is immune to a life accident and a sudden reduction in your income could seriously affect your financial health, so your monthly rest period is up to you. Nevertheless, it is possible to make an approximate calculation of your rest to live yourself by estimating the amount of your monthly payments and subtracting them from your income: If your family consists of 4 people, here is a simple example to determine your rest of life: Finally, the repurchase of loans or the consolidation of loans are operations, This can affect your peace of mind. This is a possible solution for households with several loans to repay (mortgage as consumer credit). Indeed, loan consolidation allows you to accumulate your debts into a single debt, which makes it easier to manage your budget. In addition, by extending the duration of the loan, you reduce the amount of your monthly payments. Your peace of mind of living for 4 people increases accordingly. People who are in a situation of over-indebtedness may be subject to garnishment of wages.
But within a limit: you have to keep enough peace to live, to buy food. Rest to live: 3,400 – 900 – 200 = 2,300 euros. Their amounts are variable, each borrower has different fees. The estimate should take reality into account as much as possible. In addition, other non-compulsory expenditure is still frequent. This is the case of: Specifically, the amount of the balance to live on is equal to the amount you left in your pocket after paying your monthly mortgage payment. It is therefore 67% deducted from the 33% that make up the debt ratio. This is essential for a mortgage simulation. What is the definition of the rest to live and how is it calculated? In addition, rest is a legal minimum that does not have the same value in all situations: each lending institution makes its own calculations based not only on income, but also on the financial situation (if other loans are in progress), the geographical location and the number of dependent children. For the same relaxation, a couple with children is better in Nantes than in Paris, where life is more expensive! Among the conditions that must be met to properly submit a mortgage file is the debt ratio, which is the percentage equal to your maximum lending capacity used by the bank to estimate the amount you can repay monthly. The amount remaining after subtracting this debt ratio is what is called “rest to live”: it is the amount you have left each month for your daily expenses.