Loans represent an interesting solution to cope with sudden or substantial expenditure, because they allow you to dilute over time the payment of a sum of money that would otherwise weigh on the family budget.
However, you must always be very careful to evaluate well, reading every note of the loan agreement to try to understand if you are running into too high rates or commitments from which it will be difficult to free yourself.
There are however some general rules to follow, let’s see them here.
Personal or finalized loan?
There is a substantial difference between the two loan formulas.
The finalized loan is a loan generally obtained from a reseller of goods or services. The disbursement of the amount is made in favor of the operator who sells the good or service, while the customer will have to sign two different contracts: one for purchase with the retailer and one for financing with the financial company.
The cons of the finalized loan are related to the fact that the consumer has no possibility of choosing or customizing the conditions , but will have to submit to those established by the loan connected to the purchased good or service. Watch out for further costs, before making a purchase in installments it is good to inquire about offers.
The personal loan takes place at a bank or financial institution. The amount is paid directly to the applicant, who will be free to dispose of it at his discretion, without providing a specific reason. It will also be possible to establish special conditions by contracting them with the credit institution, without having to specify, among other things, the purpose of the request.
What is the purpose of the loan?
Although there is no obligation for the applicant to specify the purpose of the loan, it is always better to declare it, since requesting a generic liquidity loan, without any asset to guarantee the credit granted, involves higher interest rates.
Watch out for costs
The loans are not all the same, because they do not follow the market indices and have a cost that depends very much on the intermediary, who will define the interest rate, the repayment conditions, methods and timing of disbursement, any compensation for early repayment : just know that in the event of early repayment of a loan, any penalties cannot exceed 1% of the amount financed if the residual life of the contract exceeds one year.
Taeg is more important than Tan
When asking for the conditions of the loan, it is necessary to dwell first of all on the APR (Annual Effective Global Interest Rate): it is this value that more than anything else allows you to evaluate its convenience. In fact, if the Tan is only the annual interest rate applied on the financed capital, the Taeg is the indicator as a percentage of the overall cost of the loan, because it includes the expenses incurred by the bank or financial intermediary for opening and managing financing.
Are you sure you have chosen the best loan?
The rule not to make mistakes is to compare the proposals on the market, because it is not easy to find the cheapest loan. For this reason it is worth getting help from a comparator, who in a few minutes is able to provide the best personal loan for each different applicant profile. Lite Lenders Credit does it in a professional, competent and completely free way.
Let’s take an example
For example, if we simulate the request for a liquidity loan of 10,000 dollars for a duration of 84 months on November 22, in the province of Milan the most convenient solution will be that offered by Younited. Personal Loan has a monthly payment of 147.47 dollars, with a Tan of 4.54% and a Taeg of 6.47%.
The initial expenses are for 593.22 dollars, the other expenses are zero. The amount will be paid by bank transfer to the bank account indicated by the applicant, at the latest within the fifteenth day following the communication of confirmation of the granting of the credit.