“Expert Advice on Timing and Tips for Taking Out a Loan”

Currently, for a person in Colombia or anywhere in the world, acquiring a loan is an important financial decision in life.

It is that whether it is to cover unexpected expenses, invest in a business, buy the car of your dreams or a house, it is key to take out said tool. Choosing the right time can have a significant impact on the credit experience and therefore it is necessary to consult the best option before making a decision.

To review rates

According to the expert Jorge Ramírez, it is important to understand that there is no special time of the year to acquire a debt. The most important thing is that when an option is found, it can be checked if the rate is one of the lowest in the market and if the quota of this new debt adjusts to your financial situation.

He stressed that once the decision has been made there are different options to acquire a loan, and recalled that “from traditional banks, official government entities or even one of the channels that has been gaining more strength such as fintech. According to a Financial Inclusion Report (RIF) from Banca de las Oportunidades, as of February 2023, 63% of Colombians use mobile banking services, which reflects the growing preference for digital channels instead of physical branches. .

He added that “fintech companies use updated systems with technologies to more accurately assess the profile of applicants, something that traditional banks often overlook, and determine interest rates in a fairer and more competitive manner, below the offered by conventional banks. In addition, it is possible to do this study in just seconds and digitally, with the aim of providing faster disbursements”.

to take into account

According to the expert, as a first step you must have a defined objective, that is, since the above allows you to effectively guide financial decisions.

By precisely defining the purpose, whether it is the purchase of a home or the acquisition of a car, you can assess what type of loan best suits your needs.

In addition, it is crucial to be clear about the objective of the credit when reviewing the rates, since these can vary significantly depending on the type of loan and the financial institution.

According to Ramírez, “the general risk at this point is that people do not understand the rules of variable rates and that, when the entity raises rates, they will be surprised.”

Beware of deadlines

It is also important not to assume long terms, that is, consider the period of time in which you will be paying the credit. A longer term may mean lower monthly payments, but it will also increase your total cost of credit due to accrued interest.

You have to make sure you have the financial capacity to pay the fees. Consider the current situation, income, expenses and existing obligations.

In addition, Ramírez said, “we must bear in mind that the loan fee should not exceed 20% of the monthly income because if it is higher it will not be sustainable for the income of the people or the household.”

He stressed that acquiring a loan is a decision that requires careful planning. Keeping the above aspects in mind can be a useful guide to accurately assess needs and come up with a solid plan to manage the product responsibly.