How to distinguish the best personal loan offers
Given a large number of personal loan offers that currently exist in the market it is difficult to know which of them is the best for us. To correctly compare we must take into account the different factors that affect the cost of personal loans. Next, the aspects that we must take into account before choosing between different financing offers:
- Interests: it will be what it costs us to get the loan, that is, the “price of money”. The lower the interest, the less we pay. To calculate the cost we have two percentages: the TIN (Nominal Interest Rate) that tells us the cost of the loan, and the APR (Annual Equivalent Rate) that, in addition to the cost of the loan, also includes the cost of the commissions and additional expenses. To compare the total costs of different credits it is better to use the APR.
- Commissions: are management expenses that the entity has to make and that we must pay to access the credits. The most common are study and opening, although they can also charge us for returning the loan ahead of time, for example. Currently, there are many entities that offer personal loans without commissions of any kind.
- Associated expenses: increasingly less common, although we can find other expenses such as having to sign before a notary, for example.
- Bindings: they are products that we must hire to be able to obtain the requested loan. These links can be free (direct debit of the payroll, for example) in which case they only involve extra paperwork, or they can have an additional cost, such as insurance contracts.
A good offer of consumer loans would be one with the lowest APR, without associated expenses or commissions. If you have links, they should be optional and free of charge and ideally, they will only require documentation and we can process everything through the Internet and without too much waiting time. The key to finding good financing offers is to compare with different entities and not be afraid to change banks to be able to choose another loan with better conditions.
Personal loan offers at 0% are real?
Yes. There are no fax payday loans, that may Get directly from Champion and allow us to obtain financing without costs. This type of credits is usually for specific purposes such as the advancement of a scholarship, financing a mobile phone or take out our driver’s license, among others.
However, not all 0% loans are free so we must pay special attention when we come across these offers. Many interest-free loans when they refer to 0% speak of the TIN (the percentage that shows us the interest on the loan) but include some additional fees that make the loan not completely free. In order for personal loan offers to be totally free, we must consider that they are 0% APR, a percentage that includes both interest and commissions. To buy among the offers of loans without interest, we must look at the APR, which will indicate the total cost of the financing that we hire.
Are the links in consumer loans convenient for me?
The hiring of linked products will depend on our situation and the conditions of these products. The linkages are additional products that we have to contract to be able to access the financing that we request. There are two types of links: free ones such as direct debit or payroll or receipts, which will only take us more paperwork; and others with additional costs, such as contracting insurance or hiring and minimum use of the credit card. If we do not want to carry out more procedures, we can find loans without links that will allow us to access the requested capital without hiring any type of product.
Other entities have optional hiring links. In these cases, they usually offer discounts on interest in exchange for us to hire these products. When they have linked products without cost, it is a good offer; But when it comes to products that cost too much, we must calculate which of the two options is cheaper.