Planning is the key to success, and will prevent your debt from becoming a snowball. When planning for a loan or financing, two things are essential: budget and market research.
As for market research, our loan simulator can help you a lot by showing the installments at various banks.
As for planning your budget, we hope to give you some valuable tips here in this post and other articles on our blog. But that part is up to you the most! Therefore, it is important that you take your time, very calmly (and some chocolates), and put in how much you earn and how much you spend on paper.
So your debt does not hurt your life, we have made a small step-by-step how to plan a loan. Good reading!
What I want?
Set a clear and simple goal. Knowing what you want (not just value) can help you find targeted credit lines that have much lower interest rates. Examples:
I want to buy a new (or used) car → The solution for you is a vehicle finance.
I want to take a trip, but it is very tight to pay all at once → The solution for you may be a personal loan or maybe apply for a credit card and install the invoice.
I want to renovate my house to rent a room → Some banks have special lines for construction and renovation.
I want to end my debt on overdraft and close it once and for all → go to the bank and talk to your manager about a renegotiation of your debt. The interest will be much lower!
I want to invest in my education and I think about getting a postgraduate degree or MBA, for example, has credit lines for this (Continuing Education Credit and Credi-University).
I am a seamstress, an individual microentrepreneur, and if I buy more fabric wholesale I get a good discount, save time and produce better → The solution for you may be a microcredit line.
The most general category is the unsecured personal loan which is why it usually has the highest rates. See our blog for tips on getting cheaper rates and on online lending sites.
This question, while obvious, is ignored by many. It may happen (especially with your credit card) that you get a higher credit limit than your needs. That’s where the danger lies.
If you don’t fix how much you need from the start, you’re more likely to get into debt than you need, and create a bomb to explode in your future.
Remember that the money you take today will have to be returned in the future. And with interest. And that means you’ll spend less on what you like (and more on banks).
Got something to put in warranty?
If you have a repossessed property in your own name, you can place it as collateral for a loan. This way you will get much lower interest rates, as the bank will make sure that if you do not repay the loan, it can take your apartment. This type of secured home loan can be called a mortgage or real estate refinancing.
Similarly, if you have a repossessed car in your own name, it can also be collateral if you do not repay your loan. This type of loan is called vehicle refinancing.
Payroll loans, in a way, are a way of placing your salary as collateral. If you are a civil servant, retired or INSS pensioner, or a private company worker who has an agreement with a bank, you can apply for this type of loan. The loan installments are directly deducted from your salary (or benefit in the case of the INSS), banks are more sure that they will be paid, so you will get lower interest rates.
If you have jewelry you can also place them under warranty . Thus, if you do not pay, they will auction your jewelry to pay off your debt. This way, they have a good guarantee that the borrowed money will come back, and thus can charge cheaper rates.
How much can I pay per month?
For a moment, forget about the interest. Focus only on installments: Will you be able to pay USD 600 a month on loan? Or isn’t it better to pay in more installments but pay less, for example, USD 500 a month?
Be very realistic and do not have the best scenarios. The question here is: will you be able to repay the loan, or will it get out of your financial life?
This question is even considered by banks when deciding whether to give you a loan or not: this is the income commitment. The idea is, if your order is unrealistic, and the installments are too large compared to your income, it will be very risky to lend you something.
To find out if the installments will weigh too much on your budget, take a break, breathe, and put your bills on the table: How much do you earn and how much do you spend per month?
The tip is: put your income and your expenses in a spreadsheet. Plan the coming months and see if the fittings fit in your pocket. It can be a spreadsheet, a sheet of paper, whatever, as long as you see what will happen to your money.
After paying off the loan installments, will you have money to live on? If not, try increasing the number of installments or decreasing the loan amount!
Where to get a personal loan? It’s time to research the prices
In the lending world, the price is the interest rate. This is the price of the money you are borrowing. As with any major purchase you make, researching prices is super important!
Our simulator, besides showing you the cheapest loans, will not let you down. After simulating your loan, you can check it out step by step tips on how to borrow from the bank of your choice!