Personal loans: how to evaluate them before deciding

A personal loan is a credit of money that involves the commitment to repay it in installments under certain conditions. Before hiring it, it is key to compare options and understand all the costs.

A personal loan is a credit of money granted by a financial institution for a specific purpose, with the commitment to repay it according to the agreed conditions.

Before taking out a loan (mortgage, pledge or personal), it is advisable to compare what different entities offer and evaluate:

– Interest rate:

• – Fixed: it does not change during the entire term of the loan.
• – Variable: it can go up or down according to the agreed reference.

– Total Financial Cost (TFC): Includes interest, commissions, insurance, and other charges. It is the indicator that shows how much you’re really going to pay.

– Term and number of installments.

– Fees: There are fees that you can’t be charged, such as certain early termination fees.

By signing the contract, you are accepting the obligations and rights listed there. Therefore, before signing:

– Read all the clauses carefully.

– Verify that the following are detailed:

• – Loan conditions.
• – Fees and commissions.
• – Payment methods.
• – What happens if there is a delay in the payment of the fees.

Always keep a copy of the contract.

A loan can be rejected for different reasons:

– Income considered insufficient by the entity.

– Lack or inconsistency in documentation.

– Your situation in the Debtors’ Central of the financial system.

To find out your credit standing:

1) Enter the BCRA’s Debtors’ Center.

2) Write your CUIT or CUIL.

3) Check if you have debts, with which entities, the amount and the assigned situation.

If the information is incorrect, you must go to the entity that reported the debt to request the update or follow the instructions in “What can I do if my information in the Debtors Center is not updated?”.