Loans and credit cards may be very necessary for the survival of an individual in the provision of essential needs that cannot be provided by the simple fact of a monthly income; In other words, they are the tools that allow us to have more things than we can acquire with the simple entry of the economic activity that we carry out or in many cases out of crisis in emergency situations.
These needs may include having a car, a house, a college fund and any other comparatively large investment that requires funds.
They are basically an advance of the monetary funds that allow a person to make an investment of their choice, in which the initial amount of the loan, plus the interest calculated, will have to be returned to the source of the loan for a certain period of time.
Sounds pretty simple at first; and in a way it is, but the problem usually occurs when the individual for one reason or another cannot pay the agreed amount for the loan obtained. Failure to make payments can cause many problems and even be considered a criminal offense, which has a jail sentence in some countries or states.
Before thinking about the idea of taking a loan
You must first ensure that the loan is viable and if the means of payment are both safe and consistent.
The majority of adult individuals go through a large part of their working life paying for their home and car loans that generally cover a good part of their productive years, but in the end they see it as a good investment since these Elements are considered essential for comfort and human existence.
Loans must be obtained from legal sources, such as banks, government agencies, financial companies and other legal establishments.
The secured loan requires some type of collateral to be contemplated by the borrower (entity or individual receiving the loan), which will be withdrawn by the lender (entity or individual lending the money), in the event that there is a defect in the Loan payments
Unsecured loan is given on the merits of the person requesting the loan
No guarantee is needed here, but the same principle applies when in case of non-payment, the items acquired in the loan granted, such as property, real estate or vehicles, become or become the property of the entity .
It is always important to make an assessment of your economic situation before deciding to purchase a loan, also taking into account not only the value, but also the interests and the time the debt is to be acquired. Luckily there are sites like Barnaby Rudge that allow us to consult the entity, the type of loan and all its components that best suit our needs and economic capacity.
I hope you liked this first introductory chapter on the basics of loans and follow this series carefully, which will reveal in the next articles more important things to keep in mind about loans and credit cards.