Articles

How to apply for a personal loan step by step


Are you considering taking out a personal loan and don’t know where to start? In the following guide we tell you everything you need to know, you are closer to making it possible!

What is a personal loan

A personal loan is a financial product where a bank or a fintech company makes money available to the borrower under certain conditions (installments, term, interest…).

It is a very popular option nowadays, since it allows access to a series of products or services that we could not afford without having all the money previously saved. For example, the payment of an integral reform, the purchase of a car, etc.

Where to apply for a loan

When it comes to asking for a personal loan, you will see that there are many options at your disposal. Among them, the following:

  • Platforms that manage personal loans between individuals: another option goes through the use of platforms dedicated to the management of personal loans between users. They tend to bring more clarity, transparency and peace of mind to users who are thinking about it.
  • Banks: banks offer a wide variety of personal loans to customers. In fact, they are one of the preferred options for their users, since they often receive offers and it can be more tempting, especially for the simple fact of knowing that they are granting it.
  • Savings banks: this type of financial institution also lends money to its customers. Although many of the savings banks have been absorbed by banks, there are still some left.
  • Cooperatives: another available modality is through the savings and credit cooperatives, which also offer customers this type of personal loan to defray certain expenses.
  • Private lending companies: Private equity companies have always existed. Independent individuals who act as lenders and may offer mini-loans or large loans at a higher interest rate in exchange for assuming a higher risk.
  • Stores: Shops as such do not offer a personal loan as such, but some do allow you to finance your purchases. Some offer a 0% interest rate for a few months, which generates a lot of buzz and makes it popular.
  • Credit card companies backed by a financial institution: this is another option available when it comes to personal loans.

Requirements to be met in order to be granted a loan

When taking out a personal loan, each company or institution may set its own conditions or requirements. After all, the company is lending us the money because it trusts us. But, what requirements can they ask for in order to give us the personal loan?

  • ID card, passport or valid driver’s license (over 18 years old).
  • Be clear about the amount you need and its purpose
  • Demonstrate solvency or economic capacity.
  • Do not exceed your debt capacity (it is not recommended to dedicate more than 30% to the payment of loans).
  • Be able to justify your income (you need to provide your last paychecks or employment contract if you are a salaried employee or the registration of self-employed, the SS quota or the last VAT declaration if you are self-employed). If you do not work but you have recurrent income by another way, you can also detail it.
  • Photocopy of the Renta or IRPF (Personal Income Tax).
  • Rental contract, deeds of the house or declaration of assets (in specific cases).

In the case of having requested a personal loan previously, they can grant you the loan as long as:

  • You have no current debts with non-payments – if you do not pay your current loan, they will hardly grant you another one, since you will not be reliable for the financial entity.
  • You are not on a list of defaulters such as ASNEF or RAI.

What is the maximum amount that can be borrowed?

Although each financial entity establishes its own conditions and they can be different from one lender to another, the truth is that the maximum amount of a personal loan is usually around 60,000 euros. That is to say, an amount that can be used for the payment of reforms, studies, trips, events, etc.

What is the minimum amount of credit that can be requested?

As with the maximum amount to request, the minimum also depends on the fintech or bank. It is usually between 750 and 1000 euros minimum.

Keep in mind that for much smaller amounts it is not worthwhile, since it may be more worthwhile to pay for the product in installments with the credit card.

When to take out a loan?

A personal loan can be taken out for many reasons. Here are some of the most common ones:

Loan for tax payments.

If you have more expenses than income and you have to pay your taxes, a trick to save a little time is to take out a loan to pay your taxes. In some cases, you can split the payment, but if this is not possible, you can go directly to the personal loan.

Loan for a reform

If we take into account that the housing stock is getting older, the need arises to make reforms at home. It is interesting for many reasons, also from the point of view of renovating to sell for more money or rent at a higher rate. Therefore, in all cases it is worthwhile to apply for a renovation loan.

Car loan

A loan for a used or new car is another of the most common reasons for taking out a personal loan. Even if you are looking for a loan to upgrade to a hybrid or electric vehicle.

Student loans

Investing in your studies can open many doors and make you improve and grow as a person. It is another type of personal loan that is totally the order of the day. But the best thing is that it can be an excellent investment for your future.

Wedding Loan

Weddings are not exactly inexpensive. They involve a significant financial outlay for the couple, which makes many do not hesitate and opt for the personal loan. It is a way to have the wedding of your dreams.

Loan for a trip

Do you dream of going on a very special trip but do not have the necessary liquidity? In that case, you can take out a travel loan to organize the trip of a lifetime.

Is a loan the same as a credit?

At first glance, they may seem the same, but there are differences. Let’s say that, when asking for extra liquidity, you might find it more interesting to contract one product or the other, since the credit is mainly less money and also requires less documentation.

In which cases is it more convenient to pay with a credit card or take out a personal loan?

If you need a significant amount of money to make several payments (such as those mentioned above), a loan is a totally valid option. Of course, for more punctual and smaller payments, the credit card is more interesting.

For example, if you buy the latest iPhone of 1200 euros you can defer it with your credit card and you spend the monthly payments month by month, so you do not notice it. Whereas, if you borrow that amount, you will have the money all at once and you will be able to pay for the cell phone instantly.

It is the difference between acquiring small, instant products and other more expensive products or services. After all, deferring payment on a brand-name handbag is not the same as taking out a loan to pay for a wedding.


Comment

*

code



Scroll to Top