Moni2402
Active member
What to know when you plan to borrow
This time I will tell you what you should do before taking out a loan, so that you can make a good decision.
1. Analyze what you need it for.
The main destinations of a loan are: investment, emergency and consumption.
If the credit is to be used for emergencies or consumption, it should be taken into account that its payment will be one more expense, since it does not generate income to cover it.
2. Identify what type of loan to use: there are two main types:
- Installment loan: it is money that must be repaid in periodic installments with interest, with equal payments throughout the term.
-Credit card loan, is a means of payment or a line of credit that allows you to pay minimum amounts or in installments at your convenience, with interest.
3. Define how much you can pay: the payment capacity is the money that is available each month. To find out how much it is, I leave you this formula that has worked a lot for me: Income - Expenses - Debts - Savings.
This way you can find out your ability to pay.
4. Choose where to get the credit: This is a key point, you must get the loan in a reliable, prestigious and very safe entity.
5. consider the risks of default:
-Additional costs: delinquency rate (interest charged according to the amount and period of non-payment) and collection management (cost of recovery of overdue payments).
-Use of guarantees: depending on the type of loan, the financial institution can execute the associated guarantees.
-Limitation of access: the possibilities of obtaining other loans from the same or another institution are affected.
I hope this information is very useful.
This time I will tell you what you should do before taking out a loan, so that you can make a good decision.
1. Analyze what you need it for.
The main destinations of a loan are: investment, emergency and consumption.
If the credit is to be used for emergencies or consumption, it should be taken into account that its payment will be one more expense, since it does not generate income to cover it.
2. Identify what type of loan to use: there are two main types:
- Installment loan: it is money that must be repaid in periodic installments with interest, with equal payments throughout the term.
-Credit card loan, is a means of payment or a line of credit that allows you to pay minimum amounts or in installments at your convenience, with interest.
3. Define how much you can pay: the payment capacity is the money that is available each month. To find out how much it is, I leave you this formula that has worked a lot for me: Income - Expenses - Debts - Savings.
This way you can find out your ability to pay.
4. Choose where to get the credit: This is a key point, you must get the loan in a reliable, prestigious and very safe entity.
5. consider the risks of default:
-Additional costs: delinquency rate (interest charged according to the amount and period of non-payment) and collection management (cost of recovery of overdue payments).
-Use of guarantees: depending on the type of loan, the financial institution can execute the associated guarantees.
-Limitation of access: the possibilities of obtaining other loans from the same or another institution are affected.
I hope this information is very useful.
