Before choosing a loan, it is important that you have defined how much you are going to request and for what. More loan tips below!
Peruvians are constantly looking for extra money that can help cover personal or business expenses. In this scenario, financial institutions offer a wide and diverse range of credits.
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However, it is common for some to choose a type of credit product that is not the most suitable for their needs.
Before requesting or accepting any type of credit, it is important that we analyze its information and characteristics in detail, to ensure that we choose the one that best suits our needs and expectations.
Regarding this, Sergio Rivera, commercial manager at Experian Peru, shares these four recommendations:
1. Determine the amount you need for your needs and expectations
Before choosing a loan, it is important that you have defined how much you are going to request and for what. Many times we tend to choose an amount greater than what we need, which means that we will have more money to make unnecessary expenses. It is important that you remember that in a loan you have to pay the money received, in addition to the interest it generates.
2. Define the payment term to which you commit
It is important that you remember the basic rule of any type of credit – longer term, lower payment fee, but also higher interest. Therefore, it is recommended that you commit to paying the highest possible monthly amount in order to mitigate interest and prevent you from ending up paying a much higher amount than the requested credit.
However, it is important that you calculate paying the credit in the fewest number of months possible, without affecting other components of your monthly budget.
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3. Review and verify interest
First of all, when the bank gives you the corresponding interest rate, verify that this is the TCEA (Annual effective cost rate), because it considers all the costs that the credit implies (commissions, interest, charges for use, insurance, among others). others).
Remember that the financial market offers various interest rates, and due to the number of options that exist today, it is a good idea to be able to analyze the rates available from the various financial institutions before venturing to apply for a loan.
Even if you have a good credit score and profile, you can negotiate additional discounts with the lower rate.
4. Consider payments on account
There are various facilities for credit card payments. In the first place, there are no penalties for prompt payment, so if you receive additional income, you can pay off the loan by amortizing the principal to reduce future interest. If it is possible to reduce interest, it is a good opportunity to also reduce the term of the loan.
What else should be taken into account?
Take these tips into account when choosing a loan. Remember that it is never advisable to apply for a loan to pay off a previous credit, since this will lead to a vicious circle that can lead you to be the holder of several simultaneous credits that you will most likely not be able to finish paying later.
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