Financing products are varied but there are a number of universal recommendations.
– Analyze more than one option . It is essential to compare in the market to hire the best product to cover the corresponding needs. You have to be well informed and, whenever possible, always analyze more than one option.
– Read the contract from beginning to end before signing . This allows to know in detail the rights and obligations that will be assumed. Loans and credits are famous for their “fine print.”
– Commit to realistic quotas . The projected income is what will determine the fee that can be met. Not being able to pay a debt can be the beginning of an unwanted spiral of financial suffocation.
– Financing with banks and not with cards. To cover credit card debt in general, it is better to apply for a loan at a bank rather than ask for a plastic credit (since the rate in the first case is usually lower).
– Fintech loans. If the user is not banked, these mobile apps or websites sometimes offer loans with a lower CFT than the credit card .
So … Loans or credits?
As we have seen, the difference between loan and credit is not so great , but they do have different terms, rates , flexibility and amounts that, in turn, differ according to the entities that offer them.
That is why it is important to take a moment to analyze the different market options according to the specific needs of the client.
Above all, it is necessary to be clear about the amount that is needed (if it is for a relatively large purchase), the flexibility (if financing will be needed in time) and the term (in how long the debt will be paid).
In other words, there is no, a priori, a better option between the loan and the credit , but it is the particular circumstances of the company or the individual that will determine which is the best product.