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Although access to credit have some restrictions there are still a large number of people to borrow for the most diverse purposes. If there has been a significant 5 years there are many difficulties in understanding the characteristics of the loans, and despite a series of regulatory documents that have since arisen, there is no great improvement in the understanding of these characteristics.
Incredibly, these are the most fundamental features that go hand in hand when it comes to taking out a loan, and many clients are reluctant to ignore these elements. Do I believe that the human mind insists on issuing very short-term signals on clients and hides the true information even if it is present.
There is still a lot of clients to be aware of the “Cabe em Bolso” culture and little culture of “How much is going to get me out of my pocket”. By this I do not mean to say that there are loans or that all loans are negative, I do want to recommend a careful look at their conditions in order to negotiate the best conditions and make the best decisions.
Going back to the fundamentals, what care should you take with loans.
Effective Loan Cost
There is so much talk about the effective annual rate of loans, however this continues to be presented with a percentage indicator, which is correct, however, is little valued when making the decision to apply for a loan.
I consider it as a better indicator that it will certainly influence the decision that will be taken, the total amount imputed or the total cost of the loan.
A large majority of loans already have a document where this value is present, that is, the standardized information sheet, which besides this indicator has many other added value. However, if there is no such document, the accounts are easy to do and give you a general idea of how much your credit will cost, but ask for:
- Amount of total monthly benefit (Includes interest, capital, insurance, taxes, commissions);
- Initial hiring costs (Opening, Analysis, preparation and formalization, among others);
Once you know these figures, you just have to multiply the value of the total monthly installment by the number of installments and add up all the initial costs of hiring to the value. Now compare the amount you requested and know how much your credit will cost you.
Beware of Time Trap
It is possible to establish regularly that a large number of customers condition their decision on the value of the service. If the provision is bearable then it meets the necessary conditions to proceed with the operation. Similar to the effective cost of credit, the term acts as a trap in decision making.
This is a misleading reality, “Long delays give back a lower annual effective rate , ” but the actual cost is far higher.
Get an idea with this example:
As you can see, if you only make decisions for the amount of the monthly benefit that will be clearly shorter over longer terms and until you comply with one of the recommendations most announced by such experts, that is the effective annual rate, you will have a penalizing decision for your finances.
Remember that what interests you is always to pay as little as possible for your loans overall and not have the best interest rates or better effective rates.
Beware of Your Loan Counterparts
Something very common that is accepted by most bank customers, in fact, the interest in owning the approved credit is so great that if they submit conditions for approval the customer little questions about the associated products or the counterparts.
There are no major problems with normal or accepted products and counterparts, such as life insurance, salary domiciliation and periodic expenses, however some products and even some of the usual ones are uninviting.
See the simple life insurance that many banks, in personal loan, are preferring the full payment of insurance policy (single payment) as opposed to staggered payment over the loan. The downside is that if you opt for early settlement of the credit you will not see back the money you paid the most for insurance.
Likewise, the condition of existence of the active credit card and with stipulated movement, creates conditions for the lapse or forgetfulness in the fulfillment leading the client to bear any penalties for non-compliance.
What to Complete
What is more usual in loans is often the least analyzed by clients which leads us to believe that most customers already accept them with obligatory loan conditions. In other words, “it is part”, which is wrong and should be analyzed and discussed when making the decision to borrow.