If we take a look at the past, we can see that today there are many financial tools that are available to people as they had never been before and that is thanks to the growth of the economy and the financial sector. Today we see that people can opt for mortgage, vehicle, business, personal, credit cards, etc.
Each product has a particular purpose as its name determines and also a different structure in terms of interest rates, terms, requirements and conditions. Today we want to talk to you about personal loans and leave you some tips so that you can make the best decision when choosing one.
Personal loans can be used for many options, for example, to remodel your home, go on a trip, pay a debt, buy your children’s supplies, purchase appliances or technological equipment, etc. A personal loan has virtually no limits on what you can use, but it is important that you define what you want because that will help you better choose the term in which you are going to commit to make the total payment.
It is a credit with a fixed, non-revolving fee
Personal loans unlike credit cards are not revolving, that is, you will constantly pay a fee until the entire loan is paid, unlike the credit cards that when you pay what is owed you have the available credit again. It is important that when you are going to make the loan application, first ask how much the monthly installment is going to be to pay, if you see that you can pay it without problem, continue with the application, if it is difficult for you, it is better that you ask for a longer term or a smaller amount.
Administrative and closing expenses
All loans without exception have additional expenses that you must cover at the time of approval, this amount will be deducted from the total amount approved. When you are making the loan application, ask the person who is attending to you how much the closing costs amount so that you know how much you will receive at the end.
It is very possible that at the time you apply for your personal loan you will be asked for a guarantor to sign as jointly liable, this may be due to different situations such as, for example, the first loan you are requesting.
You should know that when you make a credit application with a financial institution you may be asked to access your credit history to corroborate certain information that you have provided. It is important that you have a good behavior in your credit history since this can open doors to better possibilities.
To conclude, we want to recommend that, when requesting a loan, first consult with your partner (if applicable) and make two budgets, one to determine where they will spend the loan money (often people do not they spend it on what they had thought and then they get in trouble) and the second one so that they know what the structure of their expenses will be like now with the loan fee and can effectively plan their personal finances.