Payday loans are one of the most used forms of financing- help with payday loans in ohio. They give us the possibility of obtaining the money we need. In return, we will return that same amount plus the corresponding amount of interest that has been generated during the amortization period. For this reason, there are more and more companies in which we can contract this type of credit products, but do we know how to differentiate when we are facing a good offer?
Look at the interest you will have to pay for your personal loan
There are several determinants that can influence the total cost of a personal loan, but interest is the most important. The company that grants us financing can tell us at what price the money lend us through the TIN (Nominal Interest Rate). If you do it in this way, we must take into account other expenses such as commissions and the cost of hiring other products of the entity. All this will affect the total that we will have to pay to amortize the loan.
If we take as a measure the APR (Annual Equivalent Rate) we will have an idea of the total cost of the credit. Therefore, we can know if a personal loan is cheap or we can find other best offers in the market. Currently, the average APR of a personal loan is 8.30% depending on what we are going to use it for, the amount we need and our risk profile.
Seek financing without fees or commissions
Not only is the interest that we are going to apply important. There are other expenses that can include personal loans and that also increase the total cost . Next, we developed three important ones to consider:
- Formalization fees : the opening or study expenses that, depending on each company, may or may not exist. Both are included in the first installment, so the amount we will have to pay in this monthly payment will be higher if we have them in our conditions. However, we can negotiate financing, to which we must add the corresponding interest.
- Commission for early repayment: in the case that we want to return all or a part of the capital before the end of the term, some companies can penalize us for it. It is a way for the lender to recover a portion of the total interest that he had planned to collect. This commission is established by law, so they can not charge us more than 1% if there is more than one year left to expire. Otherwise, it may not exceed 0.5%.
- Notary fees: if we need a high amount, we will have to sign the conditions of our personal loan before a notary, which will mean an additional amount of between 50 and 300 euros to be paid.
Try to avoid linked products if you do not need them and, if you have, negotiate the price
It is not strange to find personal loans in which they ask us to contract other products such as life insurance or payment protection. Even domicile our payroll . Although there are also no-link loans in which it is not necessary to do so. For this reason, we can negotiate with the lender the option of not including them if we see that they do not make us fata and, in addition, make the total amount more expensive. It will not be useful to inform us before the price so as not to surprise us on the day of signing.
We must bear in mind that they suppose an added cost, since in some cases we will have to pay them at once. They can be a good option if we hire them to improve the conditions of the personal loan , so we should not necessarily consider it a bad thing.
It is advisable to request, at least, the conditions of the loans of three entities to compare the conditions presented by each of them. For this, we can request pre-contractual information to each of the lenders.