Best loans for 2016

If it is assumed that 2016 will be the year of the exit of the crisis, the sector of the loans should reflect it. Have financing conditions for individuals improved? What are the latest developments in the sector of personal loans? In this article that we will be updating every month, we review the best loans of 2016 so that you do not lose sag of what the financial entities offer-

How to value a loan

If you also need help to know which loan is the best or which elements are more important, we give you the keys to understand how to value a loan and know if it suits you or not. At this point the first thing is to be clear about what are the most important elements of a loan and the importance of each one:

Type of interest

It is measured by the APR is is the most common formula to compare and measure a loan. The truth is that the lower the APR, the better the general conditions of the loan and the less we will pay for the money they give us.

Opening commission

He left in the bubble times but he has returned. More and more entities that charge a commission only for accepting to lend money. This money, which is usually a percentage of the total amount borrowed, will have to be added to the TAE to know how much a loan actually costs.

Commission for cancellation

The commission can be partial or total. It is a percentage that, by law, can not exceed 3% in consumer loans at a fixed interest rate or 1.5% in those at a variable rate. In most cases, it will not apply, but we must take it into account if we plan to repay the loan before its estimated life ends.

Repayment period

It is the time that the bank gives us to repay the loan. The longer the term, the lower the monthly fee, but also the higher the total amount of interest you end up paying at the end of the life of the loan.

Monthly fee

It is what you pay each month and it comes from the mix between the repayment term and the APR. It can be used as an element to compare loans, but it is better to use the interest rate.

Of all the elements, the interest rate is the most important, because it will determine how much you pay for the money they lend you. The ideal thing to compare loans is to calculate the total amount of interest that you are going to pay, adding the interest rate and the commissions -especially the opening ones.

Finally, you should also assess if the entity forces you to have some connection with it in the form of a current and similar account and, in such case, study the conditions of the same.

Will they give it to me?

This is something you should ask yourself before looking for: What are my chances of being granted the loan? Why do banks grant or deny loans? The answer is relatively simple. The bank will lend you the money if you think you will give it back. Logically, every entity knows that there is a risk of default, but also does its job when establishing customer profiles and establishing who are more likely to be delinquent.

At the time of granting or not granting a loan, banks take into account the following variables:

  • Labor situation: logically, the more stable the labor situation, the better. An official or an employee of a multinational have more options to get the money than a freelancer.
  • The relationship between debt and income: this is used more in mortgages, but also serves in consumer loans. The bank will want to know what your debts and your income are and based on them your composition will be made about what your personal situation may be.
  • Default: the entity access the records of defaulters to see if you have any unpaid.
  • Credit history: what loans you have had and have and the composition of your loan portfolio will also be important. The bank values how a person gets into debt, if he is able to sustain his debt levels and if, once he hires a loan, he seeks other means of financing.
  • Guarantees and guarantees: the guarantees are not essential, but it helps a lot, as it happens with guarantees.

These elements are what will determine if the bank grants you the money, but also the conditions under which it will do so.