Personal loans: What to consider before deciding

Before taking out a loan, it is advisable to compare different options and check how much money will be received, how much will have to be repaid, and the terms and conditions of the loan.

When comparing loan offers, the following factors should be considered:

• – the amount to be received;
• – the monthly payment;
• – the total amount to be repaid;
• – the number of installments;
• – the loan term;
• – the total financial cost (CFT);
• – what happens in the event of late payment.

The monthly installment alone is not enough to determine how much a loan actually costs.

The total financial cost (costo financiero total, CFT) shows how much a loan really costs. It includes interest, fees, insurance, the value added tax (VAT) and other charges.

Therefore, when comparing different loan options, it is advisable to look at the CFT, not just the monthly installment or the interest rate.

The nominal annual rate (tasa nominal anual, TNA) shows only the interest rate.

The CFT is expressed as an annual rate and helps compare the cost of different financing options. To understand the total amount to be repaid, it’s also important to consider the amount borrowed, the loan term, and the installments.

It’s also important to review the number and amount of the installments, the loan term, and the payment due dates.

Before accepting a loan, it is important to understand the charges and consequences if a payment is made late.

Before confirming a loan, it is important to understand the key terms and conditions of the financing.

Institutions must provide a plain-language summary of the loan agreement that spells out the following, among other information:

• – amount borrowed;
• – total amount to be repaid;
• – number of installments;
• – payment frequency and due dates;
• – main costs;
• – what happens in the event of late payment.

The summary makes it easier to review the key terms and conditions, but it does not replace the loan agreement.

Reading and keeping a copy of the loan agreement

Before accepting a loan, it is advisable to check that the agreed-upon terms and conditions are clearly set out in writing.

It is important to read the loan agreement and keep a copy of it, along with the summary and any other documents related to the transaction.

Taking out a loan online

Before taking out a loan online, the person should be able to:

• – identify and correct any errors;
• – explicitly accept the transaction;
• – access the terms and conditions;
• – download and save the relevant documents.

It is also important to make sure that the transaction is conducted through an official channel of the institution or provider.

Preventing online scams

Verifying who is offering the loan

Before taking out a loan, it is advisable to identify the institution or provider making the offer and to use its official channels.

In addition, there is information available in the BCRA’s registries.

Search institutions and providers

Right to cancel

In the cases covered by the applicable regulations, there is a 10-business-day period to revoke the acceptance of a product or service.

Where applicable, institutions must provide, through their digital channels, a clearly identified “cancel transaction button.”

Early loan repayment

A loan may be repaid in full or in part before its due date.

In the case of full early repayment, no fee may be charged once the longer of the following periods has elapsed: one quarter of the original loan term or 180 calendar days from the date the loan was granted.

Before making an early repayment, it is advisable to review the terms and conditions set out in the agreement.

Financial consumer protection

Consolidated Text on Financial Consumer Protection

Lending interest rates

Consolidated Text on Lending Interest Rates

Consumer Protection

Law 24,240 on Consumer Protection