Whether it’s a loan, car loan or credit card, it’s essential that you know how to identify it so that you can have a better experience. Here are some tips for choosing which type of credit will benefit you the most.
Any type of credit granted to you can bring benefits, as long as you have the financial capacity to pay it back, preferably on time, and thus avoid interest that could affect your personal finances. In addition, if you manage to maintain a good credit history, you can obtain some advantages from credit loan providers.
There are different types of credit available on the market, sometimes offered by banks and government agencies. Some of them are divided into mortgages, car loans, credit cards, personal loans and payroll loans. Below we will explain what each type consists of, so that you can choose the one that you consider most beneficial.
1. Mortgage credit
This type of loan can be one of the most important, since it is intended for the purchase of a home. These are usually high amounts and long-term, and may vary depending on the negotiations you make before signing the contract. In addition, you can choose the option of fixed monthly payments.
Furthermore, if a government loan has been granted, you have the possibility of adding an additional amount to it and thus reaching a higher value and buying a home with a better location and better quality materials.
Depending on the credit policies of each institution, there are times when it could be included in your loans, life insurance, unemployment or loss, for this type of situation it is important that you carefully review the contract before making a decision and analyze who offers a lower interest rate between the bank and the government institution.
2. Automotive credit
If you want to buy a new or used vehicle through credit, it is important to first investigate which agency offers the lowest interest rate. Some dealers grant credit through banks or also have their own credit institutions, so you should analyze prices, guarantees, quality, type of car, size, energy consumption performance and check hybrid alternatives that will save you money.
All of this is to help you make the right decision, because there are sellers who can offer you options that, in order to earn their commission, may not be the ones that best suit you, in terms of savings and advantages for you to finance.
3. Credit card
This type of credit may be the most common, as some banking institutions may offer an interest rate of zero percent, as long as you make your payments in advance and use them exclusively to pay for consumption, instead of cash, in addition to the amount to be paid being that indicated on your account statement, in relation to the fact that it does not generate interest.
Another advantage you could have is interest-free monthly payments in different department stores, accumulating points for purchases, among others.
But on the contrary, if you were to choose the famous minimum payment, your debt month after month could be increasing and that is when these loans are no longer so attractive. It is also not advisable to have money in the piggy bank, as this could imply a commission on your monthly payments.
4. Personal credit and payroll
When you are offered personal and payroll loans, you may sometimes find them attractive, but it is important that before you choose to accept them, you prepare your personal budget, to know what your income and expenses are, and how necessary it is for you to take out this credit, because instead of benefiting you, the opposite may happen.
This can unbalance your finances and you may have difficulties paying your monthly payments. Remember that if you opt for a payroll loan, your deductions will be automatically made regularly from your salary. On the other hand, if your finances are not experiencing short- or long-term problems, study the type of credit they offer to see if it is a good idea to take it out.