28 Feb Why should you know what the unpaid balances are before you ask for your first loan?
When you apply for a loan or credit, you must pay it in a way that pays for the requested capital and the interest established by the financial institution that grants it. By covering the debt, periodically, the amount you are subtracting to pay is called “unpaid balances.”
If your bank or financial institution gives you the benefit of calculating the interest on the unpaid balances, then as you are liquidating or paying the debt, the amount to be paid for this concept will be less.
In the following image, you can see a table of payments of a loan requested for $ 250,000 thousand pesos at a rate of 28%.
As you can see the amount of unpaid balances in the column called “Balance”, it decreases as the dates of installments to be settled pass, as well as the amount to be paid for interest.
It is good to mention that some institutions also allow you to make capital payments without any penalty. This is even more beneficial for you, because if in a partiality you have the opportunity to pay more than your monthly fee, the interest of the next will be lower and so on.
Before applying for your first loan, consider the following:
1 # Identify the benefits you can get
- Investigate the minimum and maximum amounts offered to evaluate the amount you need and the amount you can ask for.
- Ask how they calculate interest and if there is a penalty for advance payments. This will help you compare the different financial options that exist and choose the one that best suits you.
2 # Check your credit bureau
Every institution that offers loans, credit cards and financing to entities or individuals, reports the information corresponding to the unpaid balances to Buró de Crédito. Because of this, you should avoid generating a delay or lack of payment since it directly influences your score.
3 # Take into account the requirements
Being your first loan it is important that you know the requirements that each institution asks you to start the process. In some you will have to give account statements, proof of income, and your credit history to assess how viable it would be to lend you money.