No one likes to lose control of the budget and need a loan to close the month’s accounts. The problem is that when this happens, the consumer usually resorts to overdraft or fails to pay the entire credit card bill instead of looking for a cheap loan.
Rather than ending financial distress, the strategy may further plunge the consumer into interest and make debt priceless.
The important as understanding the reasons for being in debt – studying the best measures – and here, the best credit lines – to get out of this situation by running away from the high interest rate lines.
In this article, we have separated 5 tips for finding a cheap loan. Follow and learn how to get out of the red without further damaging the family’s financial situation!
1. Avoid “automatic” loans
Overdraft and revolving credit cards are among the highest interest-bearing loans on the market. According to the Central Bank, in March, overdraft interest averaged 327.95% per year. Interest on revolving credit card is charged when the user does not pay the full bill for the card during the same period at 490.3% per annum.
These are more practical and automatic loans, ie the customer does not need to contract the service, interest begins to be recovered from the moment the account is becoming negative or when the customer fails to settle the credit card bill – many people surrender to the convenience and end up paying the high interest unnecessarily.
2. Calculate how much will be paid at the end of installments
Before hiring a loan, it is very important to check what will be the value at the end of the installments and compare with the final value of other loans.
3. Check Online Loan Options
Online personal credit has been a good alternative to large bank loans, usually with higher interest rates.
Websites that work with this kind of personal credit have smaller administrative structures and use technology to more accurately analyze the consumer profile. Thus, they offer more inviting interest. Make a quote with your credit profile.
4. Choose automatic debit payment
Choosing to repay the loan directly to your checking account may reduce the interest rate on the credit line offered to you.
The advantages are for both parties: While the bank is more confident of receiving and thus can reduce the interest rates applied, you do not have to worry about making the monthly payment of the generated bill. Just be sure to always keep the amount of the installment in your current account for debit.
5. Evaluate the possibility of secured credit
As we have already said, the more payment guarantees you offer to the financial institution, the most likely you are to get a cheap loan, with reduced interest rates.
Therefore, research with banks and financial institutions the possibility of placing a property that you already have as a guarantee of the loan, such as car, property or investments. Both banks and physical lenders, as well as those working online, can offer this lending option.
More than getting a cheap loan, it is crucial to look at the possibility of wiping out spending to balance the budget while maintaining a healthy financial life.
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