Applying for personal credit requires planning. Such a financial commitment cannot be thought of overnight. So how do you know when the loan is not worth it? BorrowCo has listed some cases where credit may not be a way out, read below:
Searching personal credit precisely to clear your negative CPF? Think twice. We have already talked about this type of loan (read again here) and as tempting as the offer may be, it may not be worth it. The reason? Generally, interest rates (remember that this is different from Total Effective Cost, CET) charged by lenders spend 20% per month.
The interest rate
One of the main points of attention when we are evaluating a personal credit operation is precisely the interest rate. In cases like loan for negatives, it is even higher than the average rate of revolving credit card, which is already 440% per year! Also remember that the interest rate does not represent the final value of your financial commitment. For this you should always look at the CET, which is the sum of the interest rate, charges and IOF.
Personal credit at 72 times?
Beware of financials that offer long installments, such as 72 times. As small as the monthly installments are, in the end you risk paying three times the amount you requested. This recurrence is higher when the personal credit line is requested to clear the name (negative CPF).
Installments don’t fit your budget
Did you research the interest rate? Do you agree with the installment? When taking personal credit beyond these points, you should consider whether the final amount of the installment matches your monthly income. What does that mean? First, you should analyze how much you earn monthly and what are the fixed and variable expenses. How much is left? Is this amount enough to settle all installments without defaulting? No? So it is better to review the installment option, as you are looking for a solution to your budget and not one more question, correct?
Lack of planning
Making a loan without planning is one of the worst mistakes, you know? Not planning can make you spend much more than you intended and even spend on superfluous expenses that were not being considered when you started thinking about credit.