Take out a Loan or Credit
Good management of their loans gives you the possibility of accessing various financial options each time and generates confidence so they pay you in the future. It is recommended to have a good record of credit and access them through a recognized entity.
Although a credit can provide certain commercial advantages, unfortunately it is notthe solution to an economic problem. Rather it is an option to have liquidity at a given time and thus meet a need, this may be; set up a business, pay for a semester orcollege career, buy House, vehicle, among others.
The liquidity is not anything other than the money available to respond. If I don’t have the capital available and need that good or that service, then I must assess the appropriateness of taking a loan.
Antes_de decide on the loan three important aspects should be considered: 1) Capital, 2) relationship cost-benefit and 3) support (involves ability to pay).
1) capital: We will speak of this as money that can bring together to purchase a good or service or invest in a project. If I have enough capital I do not need a credit, onthe other hand, if I have a part, the best would be a little wait and save up to get themissing.
Always think that you can get the money to complete the capital you need. When looking for a credit, it is recommended to try to complete the largest possible value of your purchase with their own money and then if funding the rest. If you can avoidfinance 100% of your purchase.
(2) cost-benefit ratio: is suitable to check if the benefit I get to take a credit is greater or equal to the cost of purchasing a good or service, if not so it is advisable to notuse credit as a tool to acquire that property or service. Then we will see how we candetect this:
The first thing we check is the type of need to cover, if the need is due to an investment, then there must be a project documented with a plan to recover that investment. Remember that before applying for funding for a project, this must throw by consequent sufficient profitability and financial viability to cover a credit.
If this need is an expenditure, we must then ask some questions:
Do I really need it? Although it sounds contradictory, decisions are sometimes takenlightly and acquired goods or services that can seduce at any given time, but that really is not required. Prioritize your expenses and try to avoid the unnecessary.
I need it right now? If you don’t need it at that time consider seeing if the money itcosts can save it in a considerable time for you, must also assess the cost of the good or service at that time and how much it cost him at the end of the time saved. If at the end of the time saved the cost it is higher and the difference is greater than thetotal cost with interest paid to a financial institution, then deciding on credit, otherwise discard the possibility of taking the credit and deciding on saving, thus avoid paying more for your purchase.
Using the compound interest formula.
t = time–saving.
CA = actual cost.
CF = cost of the good or service at the end of my savings.
i = interest rate of a financial institution. (Including credit card)
PF = Total paid with funding.
PF = Ca(1+i) ^ t then if: If Pf < Cf choose credit.
If Cf < Pf choose saving.
Note: If you don’t have the data of Cf can use the same formula to calculate it, but instead of i, can place the price index consumer (IPC) estimated for the period of the savings. It is not an accurate but it gives a good approximation to the future cost ofthat good or service.
If you definitely need it, check if you can cover a large part with its own capital and to the rest take the time to assess the form of payment and decide by the financialmethod, which generate less interest; whether credicheque, TC, free investment, etc.
(3) ability to pay. If you really need it, it will usually always want to pass you the credit, but unfortunately it is not always true.
This is because among many other things the study that makes the Bank or the financial institution‘s ability to pay, this is the determining factor when preparing to take out a loan. If the entity considers that you have and pay for it, is simply not goingto approve the loan. Think that if they had approved that loan unless you could meet the quotas, you would be handicapped exposing itself to legal sanctions, embargoes and even criminal penalties, in addition to default interest that considerably increase the cost of your purchase.
* Note: The procedures that are mentioned here should be considered as advice fora self-evaluation before taking a loan and in no case are instructions for liquid