Getting a little extra cash at a time of tightening can be useful in many people’s financial lives. It is hard to predict, for example, when the car can break, the house reform does not move, unexpected medical expenses arise, the child’s school tuition is delayed or credit card debt does not stop growing. At these times, ads like “Personal Loan Now!”, “Easy Money and No Bureaucracy!” Appear as quick and simple options to get out of the way.
However, caution should be exercised when taking out a loan, as a false step can cause a lot of headaches. The possibility of having extra cash falling on your account is tempting, but it is not worth taking a loan, for example, to buy something superfluous, like a new cell phone. Already, if you have expensive debts (credit card and overdraft), exchanging for a cheaper one, such as personal credit, is a good option.
Knowing how to identify if you really need extra credit is important so you do not wind up afterwards when it comes to paying the installments. There are situations that we can solve just by closing the spending spigot and avoid paying interest unnecessarily.
With that in mind, we’ve prepared 10 important steps for you not to get involved in a personal loan:
1) Map your spending
Evaluate your expenses and see where you can cut expenses. Even if you can not save enough to solve your situation, you will need money on the end of the month to repay the loan. See if you can not reduce the amount of trips to restaurants or buy cheaper brand products on the market, two expenses that weigh heavily on the Brazilian budget today. Doing the financial control is essential in order not to fail to pay some installments and end up getting even more indebted.
2) Evaluate the purpose of getting a loan
Identify why you need the money. It is essential to be clear about the real need for credit. Using it to buy a car, pay for travel or have more money to make purchases that are not planned can put you in an even more complicated financial situation.
In cases of renegotiation of overdraft or credit card debt, a loan may lower interest rates to less than half. It is also acceptable to use money for contingencies related to health in the family, for example, or to undertake or have it reformed in your property that has been delaying for some time. But it is critical that you make a plan to pay off the debt.
3) Analyze if the loan is the best way out
Is getting a loan really necessary or is it possible to get the desired amount saving for some time? If the answer is yes, it is advisable to add the necessary money and do not take the loan, avoiding paying interest unnecessarily. We can help you save money: read our post ” 50 tips to learn how to save money “.
Borrowing money from relatives and friends is a good way out, but one must be aware that money must be returned in the same way as for a financial institution.
4) Search for options before getting a loan
The tip is the same for when you are going to buy some good: research before you leave hiring a credit. In addition to talking with your bank manager to find out what they can offer you, also research the market, competing banks, financials and now also internet credit. Because they have leaner operations, institutions offering online loans are able to offer cheaper interest rates and still make the hiring process easier. We compared 6 credit options online, see here.
If you have any restrictions on your behalf or already have other loans, you are likely to be presented with higher interest rates. With us it is possible to consult for free the status of your CPF.
And be careful when choosing the financial institution where to take a loan, as there are many front companies that take advantage of this type of situation to apply blows. Look for referrals on the internet and between acquaintances before closing a contract.
5) Plan the payment
Before you get into a debt, keep in mind how you will get out of it. A loan can not become a debt that you can not honor. It is important to note that the amount of the installments to be paid monthly does not exceed 15% of their monthly income. Use caution when accepting soft proposals because they are usually many! It is important to always consider Total Cost Effective (CET), which includes all costs related to the loan, such as interest and taxes. Also pay attention to the contract and the charges as a fine and stay commission, in case of late payment of the installments.
Also check if other major costs will arise, such as the college of a child or the purchase of a property, for example. Do not forget that unforeseen events can also occur, so avoid accumulating debts and prioritize cash purchases so you do not compromise your budget for a period of time to lose sight of.
6) Read the agreement
Unfortunately, most people are not in the habit of reading loan agreements. However, reading the document is fundamental (and mandatory) so there are no surprises along the way, such as maintenance fees, readjustment of values, possibility of cancellation only through payment of fines, among other things.
7) Raise the necessary documents
In general, the financial companies request the following documents for the realization of the loan: CPF, RG, proof of address and proof of income. These documents may vary according to the requests of each institution, but all are relatively easy to achieve. Financial institutions that offer online credit are usually less bureaucratic and faster in the process of releasing money.
8) Deliver your documents and wait
After choosing the financial or bank that offers the best credit solution for your need, just deliver all the requested documents and wait. But attention: delivering the documents and have no restrictions in the CPF is no guarantee that the loan will be released. Each company has its approval policy, which may include payment histories, available income, economic profile and the existence of other loans. Therefore, do not make debts relying on the loan money before having a return from the financial institution.