What is a credit? We tell you some characteristics that perhaps you did not know

Credit

We want you to know in detail the financial products that you have at your fingertips and to apply the advice that we give you here in your financial life. That is why this time we will talk about a very common product and which you have surely heard a lot about. We refer to the credits.

Let’s start with the definition. A credit is a loan of money That is given to a person with the commitment that he/she returns the amount received, added to a percentage of interest to be paid in a specified time, which is defined between the creditor and the debtor. In this case, the creditor is the person or company that lends the money and has the right to collect it. And the debtor is that individual or organization that owes the amount of money borrowed (plus interest) and is obliged to pay it.
Both companies and individuals request a loan for multiple reasons, either to buy a home, acquire a vehicle, pay for studies, cover the payroll of employees, invest in other businesses, among many other possibilities. Whatever the reason for which you want to acquire a loan, it is essential that you know what the credit conditions are and above all it is very important that you know your ability to pay and borrow. Here we tell you what are the main aspects that you should take into account:

1. Interest rate: it is the cost that banks charge on the amount financed and that you must pay in each of the installments you make.
2. Term to pay: This is the time in which you commit as a debtor to make the full payment of the loan, including capital plus interest and insurance.
3. Installments: it is the periodic value (monthly or quarterly) that you must pay for the agreed term.
4. Guarantees: It is a support that supports the obligation that you acquire with the financial institution at the time of granting the loan.

Once you are clear about these aspects, you can request a loan with the financial institution that you consider has the best benefits for you.
Additionally, just as you do an analysis on which bank is best suited to your needs, financial entities also evaluate your financial profile to guarantee that you can pay and access the requested credit. For this, they analyze your trajectory or that of your company, your ability to pay, your job stability and the type of financial obligations you have, as well as the status of your savings and investments. All this with the purpose of determining if you are able to assume a new loan with the entity and pay it in the agreed term.

Finally, remember that before requesting a loan it is very important that you take into account if you are going to be able to meet your installments without delays or inconveniences so that in the future you avoid reports of any kind.

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