Credit institutions offer countless personal loans, also called consumer loans, with different trade names (car loans, credit holiday loans weddings ...), but with slight variations are all pretty much the same.
characteristics
To compare the wide range of consumer loans in the market to consider:
Interest rate.
Origination fees and cancellation (total or partial).
Other expenses.
Amortization period (time to return the borrowed money).
Amount of monthly fee (shall be determined by the APR and the term).
Rate of interest
The interest rate is the price the bank will charge for lending money requested. Before you decide, compare different offers, but not fixed only in the nominal interest rate, but the APR (more accurate if one examines loan repayment period). The APR is a calculation rather complex, which includes the nominal interest rate and fees that may apply to your loan, taking into account the term of the transaction. It is a much more reliable indicator actual cost of the loan.
Some loans may have a nominal interest rate low, but many commissions for other concepts (openness, cancellation, partial redemption, study ...). If we add all the concepts, we can find a loan at 3% nominal interest leaves us more expensive than another 5%, but less commissions, for example.
warranty
Personal loans differ from mortgage loans for the guarantee that the credit institution in the event of default occurs. Whoever hires a personal loan offer as collateral all its assets, present and future, as the case may be many or few. The holder of a mortgage loan, plus the collateral, provides the mortgaged real property itself, which becomes the property of the bank in case of default.
As a result of this increased risk by banks and personal loans usually have a higher rate of interest and a term shorter than the mortgage amortization. Ie more expensive and have less time to return. The amount borrowed is also much lower than you can get on a mortgage loan.
However, customers with high balances in accounts of the same entity and houses and other property owned, have more chance of getting loans with more favorable than those without much equity conditions.
requirements
Before granting a loan, the credit institution will conduct a feasibility study to assess their ability to pay. This study is similar to developing your personal budget. Contemplate especially your monthly income and its payment obligations as other debt, including balances on credit cards, to estimate if you are able to pay the monthly loan without difficulty. The bank also assess their assets (real estate, investments, other bank accounts, etc.), which serves as collateral.
If the bank has doubts about his ability to pay or your credit history and not considered to be sufficient guarantee its heritage, will probably be necessary to have a guarantor (someone who agrees to take over the debt if you do not pay) to get a personal loan.
Required to apply for a personal loan documentation:
DNI
Quote or proforma invoice of the product or service you want to acquire the loan
Proof of income (last payroll for external workers and VAT declaration and payment of social security self to self, last income tax return)
Copy of the employment contract.
Relationship of its assets at the time of applying for the loan (real estate owned, cars, investments, bank accounts, etc. - remember, the loan guarantee is the totality of its current and future assets)
Writing housing or rental agreement.
Receipts (electricity, gas, telephone, rent, etc.).
Latest receipts of other loans, if any
Purpose, amount and term
Financial institutions also look for coherence between the purpose, the amount and term of the loan requested. That is, shall not grant him € 5,000 for buying a washing machine. A personal loan should go to finance a product or service consumer and entities specifically want to avoid general use to remedy liquidity problems of customers. So often necessary to file a pro forma invoice or budget. Even mediating institutions require payment to ensure that the money is actually targeted the purpose specified by the customer.
As for the term golden rule is that the duration of the loan must not be longer than the life of the thing you are paying. You will not want to keep paying fees for something they already enjoyed long and objects that already stopped using or have fallen old. Therefore, it is not advisable to request loans to finance long vacation, holidays, or bodas.Y not a loan car, for example, should have a term longer than the lifetime of the vehicle depreciation.
In case of granting the loan, the credit institution must give you a binding offer in which all its conditions are detailed in writing. This offer has 10 days of operation, so that the carefully study and compare with other offers.
The loan amount, term and interest rate determine the monthly installment to pay. The longer the term, the lower the monthly payment, but the total cost will be higher because you will be paying interest for longer.
Whenever possible, avoid loans that charge high fees for early cancellation.
taxation
Personal loans are not entitled to any tax deduction.
formalization
A personal loan has to be associated with a notebook or current account operations on behalf of borrowers. That is, you must have opened an account in the light in which the loan is paid and the payment of monthly fees will be charged.
Finally, the loan is formalized through the signing of a policy. It is a formal act with legal implications, in which the institution and the borrower agree to comply with all conditions of operation. The intervention of a public notary, expenditure is paid by the customer usually required.
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