Pafilia Internal Financing - Comparison Vs Bank Loan

The new Pafilia internal financing scheme, which is available on all ready properties, enables clients to borrow up to 50% of the property value. Additionally, clients are able to take delivery of the property once a 50% personal contribution has been paid. The borrowed amount is subject to a fixed interest rate of 6.5%, capitalised every six months, and is repayable in monthly or quarterly installments over a five year period. Clients benefit from many savings, such as no loan arrangement fees, saving up to 2,5% of the property value (mortgage fees are 1% and arrangement fees 1,5% of the property value), no life insurance requirements (saving up to 0.075% per month on the loan balance) and no early settlement fees.

Please find below a comparison of the Pafilia internal financing scheme vs. a bank loan, followed by a hypothetical calculation:


	PAFILIA INTERNAL FINANCING	BANK LOAN	THE BENEFITS OF PAFILIA FINANCING
Documentation & clearance	up to 1 week. no age limitation. no documentation necessary.	approx 3 months. documentation required: tax and banking details, account statements, references…	simple and efficient
Cost of credit	0%	2.5% of loan value	significant saving
Interest rate	6.5%	6.5%	market rate
Variable/ fixed rate	fixed	variable	no variable rate risk
Accrual per	capitalised every 6 months	Capitalized every 6 months	industry practice
Minimum loan term	1 year	10 years	convenience of short-term loan
Early settlement fee	0%	5% of the annual payments	no penalties enable significant saving
Late payment fee (2-6 months)	9%	12%	lower fee compared with a bank loan
Late payment fee (6 months +)	9%	14%	late payment fee remains constant, unlike bank fee
Life Insurance	Not necessary	0.075% per month	significant saving
Repayment Frequency	monthly or quarterly	monthly or quarterly	Flexible payment schedule
Maximum loan duration	5 years	30 years	attractive short-term financing solution
Minimum initial contribution	50%	30-40%

Hypothetical calculation:


	PAFILIA INTERNAL FINANCING	BANK LOAN
Credit amount	€ 200,000	€ 200,000
Credit period	5 years	10 years (repaid over 5 years)
Interest rate	6.5%	6.5%
Total interest payable	€ 35,366	€ 35,366
Cost of credit	€ 0	€ 5,000
Early settlement fee	€ 0	€ 8,149
Life insurance	€ 0	€ 4,500
Total cost of financing	€ 35,366	€ 53,015