We want to change the car, the sofa, the TV, the computer, the mobile phone or simply finance the holidays and therefore we think of a personal loan . They offer them on television, in digital advertising or even announced by our habitual entity when we open your bank application: 3,000, 5,000 $ or even more . It looks like real easy money, which will hardly cost you back. But look …
Nobody gives away money without profit, less, financial institutions and, much less, lenders. After the friendly, simplistic messages that put your desire object to mouth, hidden clauses, commissions and interests hidden that if we do not know to detect them, we can sour the loan and even lead to ruin. This article explains seven aspects in which we must carefully repair to know if the money that we want to leave has cat enclosed.
1. The possible commissions
The announcement of our bank will usually tell us that it lends us the money in not very large but not small amounts, with a certain interest that may seem reasonable . After all, we all assume that there must be business to make the loan viable.
Now, look at the commissions , because sometimes they start to apply just by asking for information. They do not usually tax large amounts on their own – sometimes proportional to the loan amount, others not – but all together, and several can be applied, can make it not worth the money.
The main ones are the feasibility study, in which you pay for the bank to decide whether or not to trust your finances; opening commissions , for which you pay for paperwork to open the loan, notaries if any, etc .; early closing commission , whereby, in case of canceling the loan prematurely, you must pay compensation to the entity, and commissions for changing the conditions.
The latter are given when you ask for changes in monthly installments or amounts, something that happens to many people when they realize that the rate of return is excessive for them or the quotas too large. The loan may be accommodated by the bank, but in return for a penalty that will be painful. It is best to study the contract very well , ask about these commissions and others that may have been before signing any paper.
2. The contracting of related services
Often, when granting a loan, the entities require the contracting of additional services such as insurance or credit or debit cards linked to an account where the loan is deposited or from where it is paid. These are requirements that are not advertised in advertisements, but are not uncommon. It is necessary to study which commissions and annual costs imply these services to know if they compensate the conditions of the loan.
3. The APR
The APR, which means Annual Percentage Rate, is the indicator in which we should look to know if the loan is worth it or not. It is a calculation that results from collecting all the costs of the loan and comparing them with respect to the money we ask for. Thus, it evaluates the total that will have to be paid if all the commissions and the rest of expenses are taken into account.
4. Interest on late payment
Interest on arrears has long been the subject of abuse by lenders and financial institutions. And it is that each time the client could not return his monthly quota on time, exorbitant interests were applied, so that entered into a burst of indebtedness that could end in ruin.
5. Pay close attention to microcredit
There are a few lenders who offer us credits of 100 or 200 $ to repay in thirty days to an amount of 130 $, for example. It may serve us at a certain time, but be careful what we sign, because this debt can multiply in a few weeks and where there were 200 may be 1,000 $.
They usually present a higher APR, since the loan hides numerous commissions. In addition, default interest is wild and we charge for every notice we receive when we delay high amounts.
6. A comparator, the best defense
Once we have all the information about the loan (interest, commissions, associated expenses and, above all, the APR) we can use comparators to know what we are really going to pay for the money they leave us and how the amount varies to pay depending on the time in which we repay the loan. The simulator will show all possibilities .