Credit card or loan, which is cheaper?

June 27, 2022Credit card or loan

“I need money: is it cheaper to take out a loan or a credit card?” It is a question that more people ask themselves than you can imagine, due to the fact that cash is not always available to meet all the payments that may arise. So below we will analyze the advantages and disadvantages of each of the options, so that you can choose the best financial product.

Credit card vs. loan: which option is cheaper?

Your washing machine breaks down and you have no money, what do you do? At that moment two options arise: buy it with your credit card and be charged for it the following month or take out a personal loan to get out of your financial predicament.

Which is better: applying for a credit card or a loan? It all depends on the specific needs of the individual.

Why choose a personal loan?

In a personal loan, a certain amount of money is requested, at a certain interest rate, and a term is set for repayment. From the moment of its application, every month we commit ourselves with the financial entity in question to pay the monthly installment, until returning the borrowed capital together with the interests.

It is a financial product designed for those who need an immediate amount of money, in order to face a series of payments, debts, purchases, whims?

Normally, the interest to be paid depends on the time it takes to pay it back. So, if you want to get it cheaper, the sooner the better.

Why take out a credit card?

The alternative to the personal loan is the credit card. And in the case of a one-time expense due to an unexpected purchase, the card is the best possible solution, since it allows you to make purchases and pay for them a month later with total peace of mind and comfort.

The credit card has an annual cost that varies depending on the financial institution where it is requested. Normally, it is around 40 euros per year.

So… Which option is cheaper?

It all depends on the interest rate. In the case of credit cards, the rate is usually fixed and you have to add the annual cost. However, in the case of loans you have to consult the APR rate, which depends entirely on the finance company.

The Best Student Loans for Education

June 21, 2022Student Loans

It is a common practice in many countries for students to take out student loans to pay for their studies and pay them back as they work. The truth is that the need to study for a good job is causing more and more students to consider this financing.

But what a good education loan should be, what to look out for, how much to borrow, and how to repay it comfortably – let’s take a look!

What to consider when taking out an education loan

Taking out a loan to pay for graduate school or a specific course is fine. It’s an investment that can open many doors for you in terms of jobs and culture, so it’s always a win-win.

Of course, if this is your first time, it’s normal that you may be hesitant or even afraid to make up your mind. After all, you can get a loan quickly, in a few clicks (assuming you get it), but then you have to pay it back with interest.

So, what should you pay attention to before you apply?

When applying for a personal training loan, make sure that the amount you need to pay each month suits you to avoid surprises. You may also want to consider taking out a life insurance policy associated with the loan in case you want more peace of mind, although this is optional.

Benefits of getting student loans

If you can’t get into graduate school or a particular course because you don’t have enough savings, remember that you’re investing in your future because that course can get you into the job market. If you invest in a course and get a job, it will be worth it.

As for the main benefits of an education loan, it can open many doors to employment: if you’re stuck in the world of work and can’t find a job, getting a new master’s degree or specialty course can open the door to the job market so that you can finally find a job. It will also allow you to pay off your credit much faster and even sooner.

On the other hand, it’s always money well invested. Investing in education is one of the best investments you can make. If you love what you do and it’s your big passion, it’s certainly not a mistake. It also says a lot about you.

You should also keep in mind that if you’ve never had any experience with a loan, taking out a loan for this purpose is a solid advantage because by opening up employment opportunities, you can comfortably pay it off in monthly installments without noticing it. It’s always a learning experience.

How to apply for a personal loan step by step

June 15, 2022personal loan

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:

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?

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

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.

Life as a couple: the top 5 expense management mistakes

June 2, 2022managing

There is no single model for managing expenses as a couple, but here are a few tips based on the 5 most common mistakes couples make when managing their finances:

1. One of the two takes the economic burden.

We could say that there are 2 main types of economic organization in the couple:

Within the second group there are couples who decide that one of them will assume all the common expenses and the other one, on the other hand, will pay his part month by month; and other couples divide equally the bills to pay… Up to here, no problem.

The problems come when one of the couple feels that he/she carries all the economic weight on his/her shoulders and the first tensions arise, either because your partner is late in paying you his/her share and you do not make ends meet; or because in the distribution of bills you have had the worst part… or so you think! And it makes you suffer because of the enormous burden it places on you now and in the future.

How could we improve it? To make an equitable distribution of bills, the first thing to do is to know where the money goes, that is to say, to detect all the recurrent expenses of each month to be able to make a fair division, and to make a budget of maximum expense per category.

It is important to take several months of common expenses so that you can easily detect which are the fixed monthly expenses that each one pays: supermarket, electricity, telephone, restaurants… In this way you will know exactly where each euro goes and it will be easier to make a fair division.

If you are the one who has to pay 50% of the expenses to the other person, unify all the payments in a single income on the first day of each month, and treat it as if it were the rent payment; you will soon get into the habit and your partner will stop worrying about receiving the money on time.

Having separate accounts and sharing one for common expenses is another tip that can help avoid problems in the couple, and increase each other’s (financial) intimacy. This way, with what you have left over after paying the agreed amount, you can treat yourself to something else.

Do not forget to take into account the income of each one of you. In the case that these are very unequal, the best thing is to define the percentage of the salary that is going to be contributed to the common account to be really fair.

2. Our way of spending affects our partner.

When you have covered your part, it can happen that the percentage that you have left over and that you dedicate to yourself is much higher than you think. It is not good to ignore how our spending pattern affects the other person, as it can affect the health of the relationship. Maybe your partner prefers the day-to-day pleasures that you also enjoy: dinners, details… but you are a born saver.

How could this be improved? No matter how far apart your accounts are, life together always affects the other. Always ask their opinion and try to be more neutral so they don’t feel coerced by your wishes. There must be communication in order to avoid conflict.

3. Financial contingencies.

Normally couples forget to take into account financial contingencies in their financial management. When there are two of you, the economic unforeseen events are doubled… The dismissal of your partner, for example, can be more than enough reason for your personal economy to falter and lead to more problems, even a breakup.

How can we improve this? With an emergency fund that protects you from unforeseen expenses (your partner’s or your own dismissal, car breakdown…). You will live calmer and your economic and personal stability will be more shielded.

The money you allocate to this emergency fund will depend on your needs. Normally it is recommended to have enough saved to be able to cover at least 3 or 6 months of your recurring expenses (remember that these recurring expenses multiply if you have a family, etc…).

If you still don’t have an emergency fund, don’t worry! Getting one is easier than you think, it’s a matter of getting organized, also a good solution is to take out an insurance policy that covers the main bills in case of unemployment or illness.

4. Wasteful vs. stingy.

Whether you are the spendthrift or the stingy one in the couple, these are factors that can negatively affect each other.

How can this be improved? A good way to deal with the disparity of view on spending that some couples have is to set common savings goals: a trip, buying a car or having a baby, are common goals that will motivate you to stick to your budget getting very good results.

5. Talking about money once is not enough.

Things change from one day to the next: a change of job, a move… are situations that drastically alter our savings goals and we go back to the confusions and irritations we were talking about before?

How can this be improved? Set something like “let’s talk about money” day on the calendar (I’m sure you’re more original… At least a couple of times a year you and your partner will rethink your goals together, and adjust your budget according to the new circumstances. This is a way to build trust and avoid quarrels. Don’t forget to start from scratch and check the origin of all expenses and income to avoid confusion.

6. Not educating yourselves together financially

One of you will always have better notions about personal finances. One of you will have more savings, one of you will have more debt, and so on. The key is to educate yourselves together, to learn how to manage your finances as a couple. Be clear about financial concepts, speak the same language and make decisions together. The responsibility will always belong to both of you. For example: if you decide to take out a loan, you should both be aware of the amount, the monthly payments, the interest and the plan you will have to face the financial responsibility.

Unfortunately there is no single answer to managing finances with your partner, as depending on each situation there will be some things that will work better than others.

If I’m paying off a loan, can I borrow again?

May 28, 2022loan

If you have a current loan and you are still paying it off, you may be wondering if you can apply for another one. Depending on your situation, you may or may not be able to apply for another loan, but if you have good numbers, it’s practically a yes. Let’s see:

Asking for another loan if you are still paying one, is it possible?

“If I am paying one loan, can I ask for another one?” This is a question asked by many people who have taken out a personal loan and are hesitant about their bank or fintech being able to grant them another one. And the reality is that it depends on your financial situation.

Of course you can take out another loan. There are those who find themselves in this situation because they have an unforeseen event, have a business idea or want to borrow for something as simple as a trip. So, in any of these situations you can apply for a second loan.

What can the second loan be used for?

For whatever you want. For example:

That is, if your financial situation is optimal, you can ask for a second personal loan to pay off the one you already have or have it in parallel for new goals. But it is something that you will be able to do or not depending on your economic situation, if you are or not, if you can afford it.

The Bank recommends that monthly loan payments should not exceed 1/3 of your income.

Are there other solutions?

As an alternative to the personal loan, we can consider the use of credit card or fast financing, which is a way to defer payments and split them, increasingly popular in online stores. It depends on the amount you need and its destination.

What to consider when taking out another loan?

You can take out a second loan easily and in one click, but before jumping into the pool, consider the following:

These 3 aspects are key when asking for your second personal loan. If you have it clear and your economic capacity is good, you will have no problems to be granted.

Advantages of credit cards

May 22, 2022Advantages of credit cards

Are you interested in knowing everything about credit cards? Users often wonder about the advantages of credit cards, especially because they have heard that they allow you to pay in installments and be more comfortable every month. Is this true? Let’s take a look at their advantages before you go for it.

List of advantages of credit cards

A credit card is a financial tool that has many advantages. Here are some of the main ones:

One of the main advantages of this type of card is that you can always have cash at your disposal. You only need to set a limit to be able to withdraw up to that amount of money. For this reason, many people already use them as an alternative to a personal loan to meet small payments.

Not all credit cards offer this advantage. But the truth is that there are some credit cards that, in order to motivate you to use it, have something like a points program. The more you pay with it, the more points you will have to exchange for certain bonuses or privileges.

These are an alternative to a personal loan. They have a series of conditions associated with them to offer credit financing, with certain interest rates. It can be faster or more convenient. But be careful, it is also more expensive.

There are credit cards that even include insurance, which can help you save a significant amount of money each year.

Car rental companies usually require as protection a credit card to make sure that they are going to charge, in case something happens to the car.

Some people say that they manage their expenses better with a credit card. They pay for everything with it and know that on X day they will receive them in the account. This way, they can get an idea of what they can spend each month on top and keep better track of their accounts, instead of having so many different charges day after day.

This is possibly the biggest advantage of the credit card over other types of cards. With a credit card, you can make a large payment even if you don’t have any money in your account at the time. Your card will never let you down again…

This type of card is convenient and practical for those times when we make a lot of purchases and we want to make them whether or not we have money in the account at that moment, without having to worry about it. For example, Christmas.

Another of the great advantages of the credit card is that it allows you to divide the payments made in different installments with interest. So you can have more flexibility and freedom.

Guide to apply for a car loan

May 16, 2022car loan

Do you have in mind to buy a new car and need financing? In that case, you can apply for a car loan to get it together with the best conditions. Find out!

Guide to apply for a car loan

loans to buy vehicles are very much the order of the day. It is a way to obtain the necessary financing to access the purchase of the car we want. But where do you start? How do you apply?

Ideally, when it comes to buying a new vehicle, you should calculate the money you can afford and choose a model that fully meets your needs, whether you need the car for work or for leisure.

It is also important that you analyze different options to contract the financing that best suits you. You have different options, either through the car manufacturers’ finance companies or the finance companies of banks or other fintech companies.

If you want to apply for a car loan, just follow these simple steps and in less than 24 hours you will have the money in your bank account to close the deal. Let’s get started!

Set yourself a budget

Our first tip is to start by setting a budget. How much do you want to spend on your new car? 10,000 euros? 20,000 euros? More? Keep in mind that the “from” in vehicles is the starting price, then you have to add a number of extras that might be essential for you.

Choose the right car!

You don’t buy a car every day. It is important that you look at different models and brands, and that you ask for a quote at different dealerships. In case you prefer to buy it second-hand from a private individual, look in different cities.

Do you prefer a gasoline, diesel, hybrid or electric? Nowadays, there are subsidies to acquire this type of cars. Take into account the use you are going to give it, so you can choose the best option based on your needs.

It can also happen that you need the car for now but you have to wait a couple of months for the dealer to bring it to you. Whereas, a 0 km or second hand one you could have it already in those days. Consider it all!

Why apply for a loan to buy a car

Are you not interested in the financing offered by the dealer, or do you prefer to buy a second-hand car from a private individual and do not want to run out of cash? In any case, the loan is all advantages, because you will be able to borrow the money you need and buy the car that suits you best.

There are people who decide to buy a new car because they do not have the liquidity to buy it from a private individual who sells it second hand, so they end up buying a more expensive car that was not what they wanted.

Therefore, it is important to study all the alternatives, because if you need financing, personal loans are there to help you, so you can buy the car you want; even without depending on dealers to do so.

Microloans: What are they and are they for me?

May 9, 2022microloans

If you have come this far it is because you have a small project in hand or an unexpected expense, if so we tell you what microloans are and what advantages and disadvantages could be involved in applying for one of these financial products. Take pen and paper, let’s get started!

What are microloans

Microloans are financial products through which you can have a small amount of money in a short time. What characterizes microloans?

Advantages and disadvantages of applying for a microloan

As with any financial product, applying for a micro loan has a number of advantages over other possibilities, as well as disadvantages.

Advantages of applying for a micro loan: they are financial products whose process is usually fast and simple so that the applicant obtains the required amount in the shortest possible time. In addition, there are usually many facilities such as the possibility of managing everything online, so getting a micro loan online will be easy for those who need it.

Disadvantages of applying for a micro loan: the biggest disadvantage is the price, they are usually very expensive financial products for those who apply for them since the commissions in this type of financial products are usually very high, multiplying the interest rates of personal loans. On the other hand, contracting micro loans negatively affects your future ability to obtain financing with other financial institutions (e.g. when financing a car), since it is a product that is associated with higher risk customer profiles.

We want to help you, so we are going to give you a good advice as a friend: when assessing financing bet on agile and transparent loans, that from the beginning you know what the conditions are and you are happy with them and whose interests are reasonable. Applying for a loan is part of the process of growth, both personal and labor of a person, we should not be afraid, just make good decisions!

Most frequent reasons for taking out a personal loan

May 2, 2022personal loan

Data confirm that more and more people are applying for personal loan. But, do you know the reasons? What makes the frequency of credit applications increase? We reveal the most frequent reasons for taking out a personal loan today.

What are the most common reasons for taking out a personal loan?

Situations arise in life that may lead us to apply for a personal loan. And it is something that is becoming more and more common, a trend that is on the rise. These are some of the main situations that lead us to apply for a personal loan:

1 Purchase of a vehicle or breakdown

Some people need to buy a car to get to work. Of course, they do not always have the money to afford the purchase. Therefore, in these cases there is a tendency to resort to applying for a loan.

The same thing can happen if it is an expensive breakdown, since there are car breakdowns that can cost us more than a thousand euros or even make it cheaper, in proportion, to buy a new vehicle or a second-hand one.

2 Reform of a house

Home renovation is another of the main reasons. As the years go by, old apartments need to be renovated in order to remain useful and efficient. For this reason, many people apply for a personal loan and pay it back little by little. Without noticing it.

3 Education and training

Taking out a loan to pay for your studies is also common. There are Masters or Courses that are really expensive, but that can open many doors for you and your children. That is why it is important to consider them.

4 Health Treatments

Although in Spain you have Social Security, some health treatments are not included and yet they are really expensive. For example, putting dental implants in the whole mouth. It is one of the usual milestones that lead us to apply for this financial product.

5 Travel

Who wouldn’t like to enjoy the trip of their dreams? From time to time it is important to treat yourself, because we all deserve it. Therefore, if you want to take the trip of a lifetime, you could also apply for that cushion you need through a personal loan. Or for a honeymoon.

6 Various unforeseen events

There are moments in life when all kinds of unforeseen events arise. And they usually come at the worst possible moment. In those cases it is important to have a plan b; and that is when personal loans are an option.

Here are some of the most common reasons for taking out a personal loan.

How to take out a personal loan?

No matter if you need money for any of the reasons on this list or for others, on the loan website or through the mobile app you can make your application. All this without paperwork and quickly, so that you have that money you need from one moment to another.

So as you can see, there are many reasons to ask for a personal loan. So if that moment comes, it is important that you know where to do it.

How to manage a credit card wisely?

April 26, 2022credit card

Credit card but don’t know exactly how to use it to take advantage of the cut-off dates? Or do you simply want to stop paying excessive interest? Here’s how to manage a credit cards wisely.

It is common to find people -especially young people- who, due to lack of advice and financial education, use credit cards without realizing the responsibility and consequences that this could bring. In the end, they take on debts that they cannot pay, which leads them to end up reported in credit bureaus.

Having a credit card is a way to maintain a stable economy that can support in times of urgent expenses; it is also a way to inform the credit bureaus of your credit movements, which in the future can help you in the acquisition of other larger credit products. But all this will depend on your behavior and responsibility in the use of the cards. Some recommendations on how to handle a credit card are:

If this is the case, validate the option of a portfolio purchase, where you can unify your debts and thus pay less interest without the handling fee. Validate that costs are not increased.

Although credit cards can offer you several benefits, they require a lot of attention and responsibility. In addition, they will always bring with them additional costs that increase with each purchase.

If you have a credit card in debt and everything is deferred for several months so that sometimes you can’t even pay it off each month, our recommendation is that you look for a way to pay off your card completely. To do this you can look for a free investment credit that handles lower interest and costs and thus pay the total of your card and schedule installments more accessible to your economy.

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