There are times when you don't have enough money for something you like. Or to go somewhere. Or study. That is when you weigh the idea of a personal loan that helps you fulfill what you want. But is it really a good idea?
Today we want to talk to you about what is a personal loan, the characteristics that define it, the requirements to request it and some advice prior to it.
What is a personal loan
A personal loan refers to a contract that we signed with a financial institution (a bank) by which we promise that, in exchange for giving us a sum of money X, we will return it month by month through a fee, in addition to taking care of the interest and expenses derived.
In other words, it is a way of borrow money from a bank, or a person, aiming at ourselves, that is, that money is used for something related to the person (buying a car, vacations, etc.).
Characteristics of the personal loan
Among the usual characteristics of a personal loan you can find, as the first of them, the fact that used for consumer goods and services mainly. That is, your goal is to take care of the expense of something you want to do, be it buying something, going on a trip, studying, etc.
Now, another of its characteristics has to do with its amount, since personal loans are not usually very high. In fact, banks have a limit of money that they can "lend" through a personal loan. In addition, that person, by requesting this service, must respond with all your assets, present and future, as well as committing to fulfill the obligations that it has. These are: return the amount that is loaned to you and pay the interest and commissions that are stipulated in the contract.
The personal loan is also the one that have a higher interest rate, or are more expensive in general because, since there is no asset that "guarantees" the money that is lent, one way that banks have to ensure the collection is to request a larger amount of repayment. However, they are faster to process.
How can I get a personal loan
If after reading all of the above, you have made the decision to apply for a personal loan, you should know what are the most common requirements that the bank will ask you for. Believe it or not, if you go with all the possible documents, you can speed up the process and, although later they have to study it and it is possible that do not give you an answer until 24-48 hours later, or even a few days later, it is always better than waiting to collect the data.
These are the following:
- Be of legal age (you will not be able to request a personal loan if you are not over 18 years old).
- Have a DNI or Passport that is not expired and that reflects that you are residing in Spain.
- Have a bank account in Spain, ideally with the same bank where you request the personal loan.
- Demonstrate an economic solvency. This is achieved through a bank receipt that serves to certify that you have periodic income and that, therefore, you will be able to take charge of returning the money that they are going to lend you.
In other situations, they may also ask for a photo to prove your identity.
Personal loan or credit
Personal loan and personal credit are two concepts that many consider the same, but it is certainly not like that.
When you apply for a personal loan, the lender, that is, the one who has the money and gives it to you, may not give you the entire amount of money at once, but does it as you need it. Therefore, the interest you pay is not for the entire amount of money you request in the credit, but only what you use.
For example, imagine that you ask for a personal loan of 6000 euros. However, of that amount, you only spend 3000 euros. The interest that you are going to return from that credit is based on those 3000 euros, which is what you have spent, not on the 6000 that you asked for.
On the other hand, in the case of the personal loan, the amount is not only given to you at once, but, even if you do not spend it all, the interest that you will have to return is calculated on the entirety.
Things you should keep in mind before requesting a loan
Before we finish, we would like to talk to you about the decision to request a personal loan or not. The normal thing is that this idea is weighed long before making the decision, but other times there are ways to obtain that money without implying a contract with the bank, in addition to the payment of commissions and interests.
And it is that, among the advice that we can give you are:
Weigh the idea of the personal loan
Depending on the amount, you should assess whether it is convenient for you to do it or it is better to think about other ways of financing, as well as whether it is really the best you can do.
Sometimes, the desire to have something, or to do something that you cannot but that is within your reach are many, but the consequences later are not taken into account. Therefore, as far as possible, you should value the idea.
En este sentido, Are you able to repay the loan month by month according to a fee? If it is difficult for you to make ends meet, putting in a new monthly expense can drown you much more, and defaulting on the loan payment will cause you to put more interest or have to pay for the delay, which can be even more expensive.
Think of other options
Sometimes, asking a friend or family member can help to avoid having to pay commissions or processing costs or interest, but this should also be clear that it will be necessary to return it and the conditions to return it can be agreed privately with that person.
Reorganize your accounting
Sometimes with a accounting reorganization, or even a debt reunification, you can solve the problem for which you were thinking of requesting a personal loan. That way, the expenses will remain the same but you will have more liquidity to be able to face what you want.
This implies reviewing the income and expenses that you have and, in seconds, assessing if they are really necessary or in reality they suppose something unnecessary that you can get rid of.