Buying a car, doing a home renovation, or financing some studies are some of the main reasons for requesting a personal loan. However, in order for you to acquire this financial product, it is important to meet a series of requirements, such as having an employment contract or demonstrating sufficient financial solvency. In addition, taking into account other aspects, such as the type of commissions or interests requested by the bank, can help this financial product not to be more expensive than expected.
For this reason, it is very important to follow some basic steps so that your credit becomes a tool that helps you with your financial planning and not a weight that you will not want to carry later. To make your personal loan easier, these are our tips:
Don’t ask for more money than you need
A few years ago, when asking for a loan it was common for the bank to offer you a larger amount than what you requested. In this way, if the initial reason for requesting it was to change the kitchen in your home, you eventually ended up wanting to remodel the bathroom, or buying new furniture. At present, the economic situation has caused this trend to change, both on the part of banks or financial institutions, as well as customers. The former no longer grant loans so lightly, and the latter request only the money they need to cover a specific purpose.
And it is logical that entities do not lend money altruistically. When you ask for a loan you will have to pay back the money they have lent you, along with the interest, commissions, etc., which will make the total amount due to be considerably higher than what they lent you. Therefore, when requesting a loan, adjust the amount you want to apply to the maximum and you will avoid paying more interest for it.
Return it as soon as possible
When the entity with which you contract a loan asks you how long you want to repay it, try to make it as short as possible. You must take into account your income and make sure that it is a fee that you can assume periodically. After that, make calculations and try to adjust the repayment term as much as you can since the longer it takes to return it, the less security the bank will have and the greater the interest. In fact, this is one of the factors that makes the price of loans more expensive. On the contrary, if you pay installments of a greater amount, in a shorter period of time, you will repay the loan before and it will be cheaper.
Do not delay payments
When you take out a personal loan, it is very important that you pay the installments within the period you have set with the entity, without delaying a single day. If you comply with the payment later than the contract provides, the entity may penalize you by applying late payment interest, which is usually much higher than ordinary interest. If this situation is repeated, or you stop paying any monthly payment, your debt will not disappear, but will increase and depending on the type of personal loan, guaranteed or unsecured, you could get to seize your assets or bank fees, in addition to that you will get a negative rating in the credit bureau and it will be very difficult, if not impossible, to have access to any financial product again. Therefore, before requesting a loan make sure that you can face the payment of the loan and above all, comply with the payments within the expected period.
Justify the expense
When you ask for a loan, most entities will ask you what you intend to invest said money, since it is information that provides them with certain security. It is not the same as you want a loan to settle previous debts, than to buy a car. Therefore, most entities offer specific loans for the financing of a specific purpose, for example the purchase of a vehicle, home renovations, studies, etc., and these products have specific conditions and advantages, intended directly to the good that is being acquired. However, for the bank to grant you those benefits you must prove with the corresponding documents that the purpose of the loan is really the one you have indicated. There are other financial entities and products, such as personal loans online, in which it is not necessary to prove the reason for your request with any document, but it will always be important that it corresponds to the rest of the information that will need to be verified.
Analyze all your options
When you apply for a loan, depending on the financial institution, it usually takes a few days to confirm that you are eligible to lend money. For this they will ask you to provide guarantees that show that you can return it. If you are an employed person, the most common is that they ask for your payroll, which must be of sufficient income, and your employment contract, which may require it to be indefinite. If you are autonomous you will also have to prove financial solvency through invoices, bank statements or other documents.
However, there are some entities that offer “easy money” and without the need to provide payment guarantees. You should be careful with these types of loans, since they could charge you higher interest or commissions than other entities. Currently there are new options that offer personal loans online, fast and secure, so that in less than fifteen minutes you have your loan requested. In these cases it is important that you verify that they are part of associations that regulate financial entities, such as ANFE or the Bureau of Financial Entities, so that you are certain that it is reliable to apply for a personal loan in this way.
Look at the commissions
When you take out a loan, you not only have to pay attention to the interest you are going to be charged, but there are also other conditions that can make your loan more expensive. Thus, when you ask for a loan or a loan, many entities may require you to hire certain products such as insurance or cards, or charge you certain commissions that can make the product cost much more expensive than it seemed if you only took interest into account.
Therefore, when you are going to take out a loan, look at the APR (Annual Equivalent Rate), which is the one that includes the total cost of the loan, including commissions, interest, expenses and commissions. It is also important that before applying for your loan, check that there are no penalties for paying your loan before the deadline, because it is one of the commissions that interest you most by paying you, because they force you to have longer contracts than you really need . For this reason, also verify that the deadlines adapt to your need. There are currently financial institutions that offer short-term loans, from 7 to 30 days, which can be a very good option for you.
By following these simple tips you can get the most out of your personal loan, so that it becomes an ally so that your credit history is healthy and every time you can have access to more and better financial benefits.