Month: December 2019


What you need to know about each type of credit

December 30, 2019

Credit

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When it comes to urgent financial needs and looking for the best consumer loan or credit option, you can get lost in different types of loans. Different purpose loans or credits tell us about different services. Therefore, in today’s Buendía family blog post, we talk about the main types of loans, what they are different and when it is best to choose.

Housing loan

home loan

If you are planning to buy your own home – you probably won’t have all the money right away, so with your down payment, the next step is to look for the best home loan prices. Mortgages differ from others in that they are usually of the longest maturity and can last up to several decades. You also need your own down payment to get a home loan.

Often people who rent a home for quite a long time come to the conclusion that paying a mortgage is almost like paying monthly rent, with the only benefit of eventually becoming a home. However, when choosing a home loan, it is extremely important to evaluate your payment options, as this commitment is extremely long-term, and keep in mind that this loan will take years to pay, so it is essential to take the time to find the best deal.

Consumer credit

Consumer credit

Consumer credit is usually used when a larger amount of money is needed for unexpected expenses. Consumer credit can be short-term, with borrowings of just a few weeks or months, and long-term, with borrowing times up to several years.

The advantage of consumer credit is that you do not have to spend a lot of time, go to the bank several times and manage many different documents to get it. Make it all the power at home, even without getting off the couch Credit can be ordered online and the money will be in your account the same day.

Collateralized loan

Collateralized loan

This is a type of loan where a certain amount of money is only given through a mortgage. The pledge can be, for example, a house, a homestead, a car, etc. The pledged property provided all payments are timely, can be used without any restrictions.

However, when choosing this type of loan, it is crucial to have a good look at your solvency and ability to meet your financial obligations, as you run the risk of losing your mortgaged property in the event of serious financial difficulties.

Business loan

Business loan

This type of loan may be granted to legal persons who wish to develop their existing business or to natural persons who are just interested in starting their own business.

Business loans can be made to purchase a variety of equipment or facilities, when needed for raw materials or to invest in new business.

Refinancing

Refinancing

Refinancing is the process of transferring an existing financial obligation to another institution in an effort to reduce the interest payable, extend the maturity or otherwise improve the terms of payment. However, it is worth considering whether refinancing is really the best option that will save you money. Calculate what premiums you would receive when you transferred liability to another company, how interest would change, and how much you would pay in total. Of course, there are certain situations where refinancing reduces the burden of liabilities, but sometimes it happens that even with the refinancing of a loan, the interest rate reduction is extremely minimal.

Before choosing a loan type, think carefully about the amount you need and borrow only what you really need to avoid potential financial difficulties. Also, consider the purposes for which you need a loan and this will make it easier for you to choose the best lender.

Credit comparison: how to save on your interests? An example

December 4, 2019

Credit

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Faced with the many players in the consumer credit market, it is not always easy to know where to turn. What is the use of an online credit comparator compared to the comparison of offers made by a specialist? We offer some explanations and an example of a customer who saved more than 5,000 dollars thanks to a better rate.

 

Beware of online credit rate comparators

online credit rate

In the idea, to compare the various offers proposed by the banks is attractive. It would then be enough to enter the desired amount and the duration of the loan to instantly know the best offer. In practice, this procedure works well for services with fixed conditions, such as insurance, but much less for private credit.

Indeed, the rates offered are not universal. For the same amount and the same loan duration, two borrowers may be offered completely different rates by the same bank. Indeed, each request is analyzed by the banks and is the subject of a tailor-made offer. Thus, it is simply not possible to offer a reliable credit comparator: “automatic” analysis is simply not possible. A comparison of solutions must necessarily go through the study of the file: something that an online comparator cannot do, for example.

 

How best to compare loan offers?

compare loan

The solution to get a real comparison of offers, that is to say an analysis that takes into account your specific situation, remains to go through the services of a specialist like Multicredit, which offers a credit rate comparison service. The latter can then:

  • Study the file
  • Ask your banking partners for individual offers
  • Compare the offers received
  • Possibly still negotiate more advantageous rates

 

Comparing effectively saves money: an example

piggy bank

A bank employee, wealth manager and endowed with a good income, wished to obtain a private loan of 200,000 dollars . The specialist in charge of his file essentially selected the offers of two banks for reimbursement on 60 monthly payments:

  • A first offer with a rate of 7.9%
  • The second offer with a rate of 6.9%

A quick calculation of the costs makes it possible to realize that this difference of only 1% represents for the client a saving of 5,315 dollars on the interest paid! In this situation, calling on a specialist for the comparison of rates allows real savings! In addition, the latter, once the best alternative has been selected, can still negotiate to obtain an even more attractive rate!

 

To summarize

credit loan

While online credit comparators can be useful for getting a general idea of ​​the markets, they do not allow you to compare real rates, as these depend on the situation of each borrower. The best alternative therefore remains to call in a specialist. It is then the experience and professionalism of the person in charge of the file that will allow to obtain a neutral and real comparison and to save on the interests of his future loan.