How to get better conditions when asking for a loan
The best way to get a good condition when applying for a loan is to have all the information about your financial health to be able to negotiate with it.
This is so. If you do not know how your liquidity is, your ability to pay, your risk … you cannot negotiate these commissions or other conditions with financial institutions. These may give you the circumstances they deem appropriate, and you will not be able to do anything to refute him.
How can I know what my financial health is?
Contrary to what many think, knowing the money you enter each month, and what you have saved in your bank account is not enough for an entity to set financing conditions.
Banks are set on many other factors that make your interests and other conditions of your loan more or less favorable. The Credit Score is the most reliable code to know the financial health of a person. This index is a number between 0 and 900 which indicates how your financial institutions see your accounts. The higher, the better, as it will mean that you enjoy better financial health. To determine this code, more than 160 variables are taken into account, not just your savings and your salary! Indeed, your income level and its frequency, your liquidity and the trend you usually have, your payment histories (if you have been discovered, return of receipts, etc.), your level of indebtedness, if you have requested credits have ever been checked , how much and for what … All information is important to determine how your financial health is.
With that financial examination you are in the same conditions as an entity to negotiate face to face on the conditions that may be given to you. So you can get better, provided you have a good situation. If you have or want to improve it, you can rest easy because Good Finance, in addition to being the only company in Spain that gives you information about your credit score totally free, helps you improve it! Through a series of tips and recommendations, our professionals will guide you so that you get the best score and access the best financial products.
Each bank has different conditions
It is also important to know that not all banks have universal conditions. Moreover, not only banks give credits, but financial institutions also give them. The conditions are stipulated by each company as it deems appropriate and depending on the type of credit, customer, personal characteristics … etc. Therefore, making a comparison between the conditions that each entity gives you is a great success to get the one that best suits you and your circumstances.
Another factor that influences when you have better conditions when you are going to ask for a loan is that you have payment guarantees. That is, that you are working, do not be very indebted and have savings to support you. Therefore, having a good management of your income and your expenses is essential to be able to save month to month, and make the most of what you earn.
Tips for applying for a loan
One of the aspects to consider is that you should know all the clauses that a loan contract may have. It is the only way you can assess the conditions with them. Therefore, it is recommended that you review the contract and the interests that have been set for you, as well as the other conditions, such as amortization. This point is very important. In many loans, if you repay you have a penalty, you must see that it is specified in the conditions. This is important because if you save an amount, you can contribute it, reducing debt, and therefore interest. Do not leave any clause unread.
It is also important that you evaluate your financial situation before asking for financing. If you already have a loan or have a very low salary, it may not be the best time to ask for it. It is not advisable that you allocate more than 40% of your salary to pay credits. Nor should you put aside your savings goal. This means that the fee you pay on the loan should not influence the amount you have allocated to saving, that is, that you can meet both and continue to have money for your fixed expenses.