For a few years now, competition in the world of finance has increased considerably, causing us to find a wide variety of prices today. Therefore, comparing personal credits has become essential, since with this simple practice we can save considerable money. In short, if our intention is to obtain financing, these are some of the aspects that we cannot lose sight of.
Before starting to compare personal credits, do you know what amount to request?
In the world of finance we can find a wide variety of products to go to depending on our credit needs. Therefore, one of the keys to start comparing personal credits is knowing what amount we need and what product we should go to:
- Personal loans: we can get amounts of between 1,000 and 60,000 dollars, depending on the entity.
- Private lines of credit: allow us to access up to 5,000 dollars
- Mini-credits: in general, their amount reaches up to 1,000 dollars.
Normally, before premeditated actions that require large sums of money, such as home reform or the purchase of a car, it is advisable to resort to personal loans, whether from banks or other entities. With them we will be able to get the money we need at an interest lower than that of fast loans. On the other hand, if we have to face any unforeseen event and we need an extra capital as soon as possible, both the mini-credits and the lines of credit may be a good alternative if the bank does not accept our request.
Watch the interest rate and commissions of your loan
One of the most important aspects when comparing personal loans of greater amount is its price. Whenever we decide to inform ourselves about any product, we can observe how the financial financial institutions show us the TIN and the APR of the product. But do we really know what these indicators mean?
- TIN: refers to the annual interest rate, that is, the percentage of capital that the bank charges us for lending us their money.
- APR: are the initials of the annual equivalent rate. This percentage reflects both the interest rate and the commissions of the loan to be contracted.
According to the latest data, the average APR for personal loans stands at 8.3%. However, nowadays we can find credits with prices that range between 6% and 12% APR.
The term, another aspect to consider
Although we find it hard to believe, the term we choose to repay our loan directly influences its price. Let’s take an example. Let’s imagine that we request 10,000 dollars with the credit to be repaid in four years. With these conditions, the total price of our loan would amount to 11,261.81 dollars. However, if we decided to repay the loan in eight years, the sum of the interest generated would amount to 2,592.41 dollars, which would mean a total amount to be returned of 12,592.41 dollars.
With these data we can see how by increasing the return period from four to eight years we would pay 1,330.6 dollars more. Therefore, it is advisable to choose a shorter repayment period, but always being able to face the payment of fees.
Once we have compared the different personal loans, it is important to be able to calculate the installment of our loan and thus choose for ourselves the loan conditions that best suit our credit profile.