Interest, commissions and penalties for delays can make the computer that we have bought or the trip we have made thanks to the loan requested:
The key is in the APR
The Annual Equivalent Rate (APR) is the most useful indicator when it comes to knowing anything we are really proceeding to give for the money that is granted, since it includes both the interest that the entity applies and the commissions and other associated expenses as a function of time. in which the payments are made. Define the cost of credit clearly and completely.
The APR should be included in all the publicity that the entity makes about the product and also in the pre-contractual information, in the binding offers and in the contract itself. If we had to add the interest, commissions and other associated expenses and calculate it in Depending on the duration of the loan, it would be more complicated to know what we are operating to pay for the money we receive.
With this indicator it is much easier to compare the conditions of several loans and choose the most advantageous according to our needs. Moreover, the APR allows us to compare all the offers provided by the borrowing entities, not simply in usa but also in the rest of the EU countries because, by law, it is calculated in the same way throughout the Union .
Read about online payday loans without direct deposit
Attention to the interests of delay, there are important news
They tend to be much higher than ordinary interests and are activated when the customer stops paying. If we (payday loan) pay a 12% interest on the loan, the default interest that appears in the contract can be, for example, 22%. Therefore, when a default occurs it is easy to enter into a spiral in which each time we owe more money and this causes more interest to be applied, so that the debt is unpayable and families have to respond with their assets.
However, it is important to know that a judgment of the Supreme Court of April 2015 has established that the default interest on personal loans (not mortgages) can only be two points higher than the interest agreed on the personal loan. Therefore, if the interest that appears in the contract is 8%, the delay could only be 10%. What exceeds this amount is abusive.
In addition, this ruling not only affects the loans that are contracted in the future, but also has validity for those already signed. Regardless of what is included in the contract, only a higher interest can be applied in two points to the interest agreed in the loan. The consumer could ask the entity for the interest paid for more , although he probably has to go to court.
Beware of quick credits and mini-credits
No explanations, no papers, no payroll or endorsements finance our dreams in just a few minutes. Do you want to reform your home, buy the bike you always wanted or help those relatives who are having a bad time at this time? There are companies that offer quick loans to help you . Immediately, by telephone or internet solve your economic problems. Insurance?!
Behind some of these companies that offer economic happiness in 48 hours are thousands of foreclosed families, because they have not been able to cope with the payment of a seemingly low amount, either due to the high interest they have associated or because after a default they they have applied very high late payment interest.
That is why it is necessary to read the contract carefully, do not sign anything without understanding it in its entirety and not be carried away by its ingenious television ads. As the amount requested is sometimes so small, it can make us lower our guard and lead us to think that nothing dark is hidden behind the request of 50 or 200 euros.
Would someone hire a loan if the company told us that the APR is 3,752%? Well, it is not difficult to find them, according to ADICAE. Ordering 100 euros to pay in 30 days has a total cost of 138 euros, which gives this APR so high. This association indicates that if the client is unable to pay, he has the option to request a deferment , but in exchange for commissions that in many cases reach 120 euros.
If you still do not pay what is owed, the penalty continues to rise for each day of delay. And it is more, for each notice that the debtor receives will have to pay an amount of between 15 and 30 euros – and they usually make a notice per week-. So in a short time the 100 euros will have become 500 and the debt will continue to grow if you do not pay.
Process to get a loan
Simulators are a very useful tool:
when we have all the points about the loan (interest, commissions, associated expenses and, above all, the APR) we can use simulators to understand what we are truly going to pay for the cash they leave us and how the amount we are going varies to pay depending on the time in which we return the loan. The simulator will show all the possibilities. Also, as the monthly fee indicates, it allows you to plan the return time.
Let’s study our negotiation margin
Once you have all the information, the applicant can negotiate with the lender. In some cases this is not possible because the conditions are fixed for all clients. But on other occasions, when negotiating with the bank , an improvement can be obtained , especially if the future borrower has a good financial record or a high payroll that supports him.
It is also possible to contract other products of the entity in exchange for a reduction in interest, but always be careful, see if it really suits us and know their conditions so that a discount in the price of money does not really mean an increase for the consumer. Banks do not want to lose customers, so if we show offers from other entities in which conditions improve, it is possible that they give in and make a reduction.
We have the right to desist
Once the loan is granted, the client can back down, cancel the contract . To do so, it has a term of 14 days from the moment the contract is signed or, if later, from the date on which the consumer receives the contractual conditions. The entity can not penalize you for it and it is not necessary to explain the reasons for the withdrawal. In any case, the user must pay the capital and the accrued interest between the date of disposition of the credit and the date of reimbursement of the money.
Monitor the financing in shopping centers
Some department stores offer their customers very advantageous conditions, for example at 0% interest, while others apply high interest rates that do not benefit the consumer . Comparing what the different stores offer us, we will see the difference between what it costs to postpone the payment of the same product in one and the other. It is therefore advisable to consult the financing conditions of each establishment before paying an item in installments.