A university degree in economics is not necessary, but it is good to have some clear things. Today, we are going to give you some basic, but very useful, tips to ask for a loan.
1 Calculate the amount you need carefully
So important is not asking too much, like asking too little. If you ask too much, you will pay interest and extra fees, while if you need more money in the middle of the loan, asking for a new loan will be more difficult and expensive.
Therefore, take paper and pencil or your favorite spreadsheet and make accounts carefully.
2 Do not be afraid of conditions
In general, when entities give us conditions such as having a payroll or presenting a guarantee, what they do is reduce their risk and with it, the interest they will charge you.
Since you only have to ask for a loan when you are absolutely sure that you can repay it, if you have the possibility of fulfilling these conditions do not refuse to do so. For example, unpaid loans are easier to obtain, but also more expensive than loans that do require payroll.
3 Beware of associated products
Very different is when the conditions consist of hiring other products of the financial entity. In this case, you must think if you really need that product.
If so, compare what the product costs you in your current entity and what it would cost you in the entity that will give you the loan. If the second one has higher prices, add this cost to the interest that will be charged for the loan. After all, even if it is masked, you will be paying more.
4 Try to avoid whims
If you ask for a loan, you will have to return the money plus interest. That means that you have the ability to accumulate that money and not spend it on other things. Therefore, change the focus. Save first and enjoy the money later. Reserve the loans for more serious things that you can’t really expect.
5 Tell the lender the reason
It may seem like an indiscreet question, but if you are going to ask for a loan to make a reform or study, telling the lender can save you some percentage point in the loan. That said, do not lie, doing so can lead to many problems.
6 Compare loans using APR and total to pay
When comparing loans you must consider, at least, the APR and the total to be paid. The APR is the interest rate that you can compare because it is annualized. That is, it gives you the relative price. But it is not the only thing to look at.
For example, a non-payroll loan of $ 100 at more than 2000% APR for 30 days will make you pay less than a loan of $ 1000 for a year at 8% APR. Therefore, although it is much more expensive in relative terms, depending on your need for concrete liquidity, it may be worth more than another loan with a lower APR, but which requires a longer term.