When requesting a loan, we usually look at aspects such as the term and interest rates. But do we really know how to analyze each offer? In this article, you will know all the factors that you should consider if you apply for a fast credit or a long-term loan.
Normally, the first thing we look at when requesting an immediate online loan is that the payment conditions are adapted to our needs. The goal is not always to seek financing with the lowest installment, because depending on the case, perhaps your priority is that the term is longer to return it little by little.
Once you start sending requests and receiving offers from different entities, you will want to know how to compare each one and determine which offer is best. To do this, you must take into account the following aspects:
What do you need it for?
It seems like a very obvious factor, but you would be surprised by the number of people who request a type of financing that does not correspond to their need and end up exacerbating their debts or paying much more than agreed. It is important that you define what you will use the money for and how you can respond to your debt.
For example, if you need to pay rent and services for the month, you probably need the money urgently. In this case, it is not convenient to request a loan with payment terms of 12 months, for an amount that you can pay in 90 days. That's when a quick loan or a microloan is your best option.
Now, if you need to buy a car, appliances for your home or equip your home, it is best to apply for a long-term loan or credit . This will allow you to buy your goods and pay for them little by little without affecting your monthly savings much. As it is not an emergency, you do not need all the money available in your account and you can get better interest rates.
Watch out for the interest rate! (TIN and APR)
When you are going to apply for a short or long-term loan, you should know that the interest rate plays a fundamental role in each modality. For example, for fast short-term loans, it is very common for the interest rate to be high.
Keep in mind that they are getting you out of a hurry by granting you money immediately and that normally these types of loans work with more flexible conditions for the user. However, for long-term loans, the interest rates are usually lower, but this is because you will keep the debt longer.
To give you an idea, in a long-term loan you can get a Nominal Interest Rate (TIN) of 4.5%. However, in a fast loan, the TIN can reach 2000%, especially if the amount is very small.
You should also look at the Annual Equivalent Rate (APR) which is the interest rate of the loan including interest, expenses and commissions.
This means that, if you are going to apply for a short-term online loan, you must prepare to face high interest rates, and therefore, look for the company that offers you the lowest rate.
Many entities that offer online loans allow you to request your first loan for free , free of commissions and interest . This means that you only have to pay back the money they loaned you at the beginning. Normally, this type of promotion is available for financing with short repayment terms.
Be realistic about the repayment period when requesting a loan
A very important aspect that you must take into account when applying for a loan is the repayment term. This is when you should really analyze your ability to save and the flow of your monthly income.
Remember that although, in online loans there is a lot of flexibility when it comes to extending a term, if you do not notify in time and you are late in paying the monthly fee, you can face very high penalties.
To agree on the best payment term you need to be realistic with your financial situation and choose the one that best suits your reality. Knowing that there are unpredictable situations, it is best that before applying for a loan you investigate and compare the penalties for non-payment of each entity to select the one that is less high.
In this way, study how long you need to repay your loan without being late in paying any of the installments. Keep in mind that there are repayment terms for online loans that range from 7 to 30 days as in Wandoo or from 6 months to 7 years, as is the case with Younited Credit.
What to look for when applying for a loan?
- Choose if you need a quick credit or a long-term loan.
- Look for the lowest Nominal Interest Rate (TIN) and Annual Equivalent Rate (APR).
- Identify the lowest penalty for non-payment.
- Study the return period carefully so as not to delay in payment.
Requirements when applying for a loan
You should know that not all loans involve the same requirements and you should evaluate whether it is convenient for you to apply for a long-term loan or a fast mini-loan.
For example, if you would like to request a long-term loan, you should know that, when acquiring a commitment of this magnitude with a company, it will want to have more information about you and your ability to pay. For this reason, you must be prepared to face requirements such as:
- Have a guarantor.
- Prove work payroll.
- Do not belong to any delinquent file such as Credit Checker .
On the other hand, for fast loans this is not a problem. In fact, they hardly ask you for explanations when applying for financing and you can even request loans even if you appear in Credit Checker .
However, you should know that this flexibility will be reflected in the final price of the loan, but it really is a great advantage for those people who do not have a favorable credit history and need urgent financing.
Most of the requirements for fast loans are based on aspects such as:
- Being over 18 years.
- Have residence in the United States.
- Have a bank account in the country.
- Have a valid DNI or NIE.
- Demonstrate monthly income that does not necessarily come from a payroll (subsidy, benefit, scholarship, etc.).
If you want to save the work of analyzing each pro proposal separately, you can also resort to loan comparators such as Pezetita or Solicita24 . These services are completely free and what they do is collect information about your financial situation and send your request to all their affiliated companies to show you only the best results.