Credits, 4 tips so you don’t end up overpaying

If you are thinking of buying a car or urgently need to make an improvement in your house or simply go on a trip but you do not have enough cash to do it, there are many options to solve it. One of them is to request a loan from a banking institution so that you can do with the money what you need.

And it is that asking for a loan may sound very complicated at the moment, either because the process sometimes is not so simple or because you do not want to carry a debt, but asking for it is not as bad as it seems, especially if you know how to use it in your favor. Therefore, we give you 4 tips for requesting a loan.

Consider these points before requesting a loan. Photo: Pixabay 1. Order only what you need

This is very important since in general when they authorize a line of credit it is usually higher than you need, so try to control your impulses and ask only for the money you need, not more.

Remember that for the amount they lend you, you will have to pay interest and the more money you ask the banking institution, you will end up paying extra, so limit yourself to requesting only what you need to cover your urgency.

2. Pay as fast as you can

If it is within your means, try to pay the credit you requested as quickly as possible, this to avoid paying too much interest. Although requesting a long term to return that money can be very comfortable, it is not the most recommended.

In the same way, take into account if in the place where you are going to request the loan there is some type of restriction or penalty for finishing paying earlier, since it is convenient for them that you take more time to pay extra interest.

3. How much do they charge you in annual fee

This is a point that people who ask for a loan do not usually consider but before you sign any document, ask how much the Equivalent Annual Rate is since depending on what they charge you, the credit could be more expensive than you thought.

As a recommendation, check with various institutions how much is the rate they charge you for a loan and based on this you can make the decision that you consider best.

4. Pay on time

This is the most important point, asking for a loan is not bad if the payments are made on time because if you do not do it on the stipulated dates you can end up paying much more than what they loaned you.

In the same way, interest will increase and you could seriously affect your finances and getting out of debt could cost you more work than you thought. You can set an alarm every month that alerts you about the payday so that you don’t miss the date.

For you to continue being informed about this issue and other related issues, we suggest you visit our Credits section.