If you have not tried to apply for a personal loan before, you surely do not know the importance of knowing the exact conditions of the loan that you are requesting. In the market there are many online and physical financial institutions that specialize in giving loans to their clients; but not all of them are clear when reporting the conditions of each credit.
As the saying goes: “information is power”, for that reason you should make sure to review the Terms and Conditions of the financing you are about to receive. Also, the loan contract itself to avoid being a victim of a scam. We know that it is not easy to review the information of all available personal credit offers, so we offer some useful tips that will facilitate the process.
Tip 1: Use a loan comparator
When you do not know which personal loan to choose or the conditions that explain online credit companies are confusing, the best thing you can do is request the assistance of a loan comparator. These types of systems, such as Boris Godunov’s, work from the web, and are responsible for finding the best loan offer based on the information that the client provides.
Tip 2: Evaluate the nominal interest rate (TIN)
To apply for this loan you must have a property in your name; it can be a land, a commercial premises, a house or an apartment, the essential thing is that it is in your name.
In case you prefer to compare the loan conditions yourself, start by evaluating the TIN of each offer. This fixed percentage represents the amount of money that the financial institution will charge depending on the amount you have requested. The TIN can be monthly or annual, and it is important to know this information because a nominal monthly interest rate is usually cheaper than an annual one.
Tip 3: Review the fees associated with the loan
Most credit companies usually include a commission percentage in the contracts of their financial products. These commissions can significantly affect the amount to be paid for the credit, review each offer well, compare, and opt for the institution that does not charge commissions, or whose percentages are minimal. There are opening fees, early repayment, late payment, etc.
Tip 4: Compare the annual effective rate (ASD) and opt for the lowest
The Annual Effective Rate is the interest rate that calculates the cost or expected value of interest over a period of one year. Either calculated based on a year of 360 or 365 days.
That is, the TEA percentage evaluates all the factors that affect the requested personal loan (conditions, loan term, etc.); The higher the TEA, the more expensive the financing payment will be.
Tip 5: Try to avoid loans that include linked products
Loans that include related products (insurance policies, direct debit, among others) are not very common among online loans; But if you are considering requesting a loan from a bank, try to opt for those that do not impose the linking of other financial products.