What is a Consumer Credit?
A consumer loan is one intended to satisfy personal financial needs. It is not a large loan, on the contrary, it is a smaller amount of money in relation to other types of loans. Generally, this type of financing is used for the purchase of a vehicle, furniture, appliances or the payment of a trip. In addition, consumer credit has the peculiarity that the procedures are simpler than those of a larger loan. When the money to access goods and services is not immediately abundant, it is when consumer credit is used. It is granted in a short period of time and its total cost is not characterized by being high, making it easy to pay.
Main characteristics of a consumer loan
Consumer loans in Chile can be processed in traditional banks, commercial houses or credit unions. The offer, advantages, rates, costs and benefits vary according to the option you choose. Consumer credits can be used to purchase vehicles, clothing, footwear, appliances, housing. They are even used to pay for trips and celebrations. The loan consists of a document or contract that contains the signature of both parties, otherwise it would not be valid. The contract must also contain all the information related to the credit. Among the most important data are the following:
Corresponds to the amount loaned by the financial institution and is the total cost of the loan expressed as a percentage. Here aspects such as administrative expenses and commissions, among others, are taken into account.
This only applies when the annual rate and the corresponding expenses are not established.
This is the amount loaned by the financial institution.
Number of fees to pay, if they are the same or vary. The periodicity of the payments is also established: whether it will be weekly, monthly, bimonthly, etc.
Constitution of guarantees, penalties and other expenses that may apply.
Compare; annual rate, interest and number of installments
The market offers a large number of options that you can choose to access consumer credit. However, before choosing the loan you must evaluate certain aspects.
The annual rate, the number of installments and interest must be according to your credit expectations and adjusted to your financial situation. This is important so that your personal finances are not affected when you have to make the payments. On the other hand, it is essential that when contracting consumer credit, the rights that correspond to both parties are not lacking. It is also important that the fact that the credit does not have a specific purpose and that the client can give it the use they want is delimited.
Tips for good consumer credit management
Make sure you have the ability to pay
Before requesting any credit, make a balance of your monthly income and the fixed expenses that you have in your charge. This will serve to know your financial situation and define if you are able to meet the quotas.
Pay on time
It is important to meet the dates established in each installment. This will prevent you from falling into default and being reported to credit bureaus. Falling into constant delays would harm your credit history.
Avoid using consumer credit to pay off other debts
You are the owner of the money once it is granted. However, if you use it to face other debts you could fall into an unsustainable situation in which you will be constantly in debt.
The lack of immediate money does not have to represent an obstacle to make your projects come true. Consumer credit is one of the best options that gives you the market to realize your financial goals short term.
You just have to do an analysis of all the implications of credit and the advantages that each financial institution offers. Evaluate all the alternatives, compare and quote your loan, see the interest rates and choose the most convenient option for you. Do you have doubts about how to manage a consumer loan and you do not have access to traditional banking? Remember that at Oriencoop we offer you the opportunity to access financing easily and without delay. Consult our products and specify your personal projects.