A new credit involves extra expenses. Having the notion of the impact that credit underwriting will have on your budget and until what value can go when you borrow is something that should be well defined to avoid surprises in the medium and long term.
If you are considering hiring a home loan, a personal loan, a car loan or asking for a credit card, it is important to make sure you can afford your monthly fee. Doing well at this stage is essential to know how much you can afford and, consequently, how much you can ask for. Having the exact notion of how much money you enter monthly into your account and how much it leaves gives you a clear sense of the state of your finances and what the economic margin for additional spending.
Evaluate your budget
Begin by noting the individual or joint fixed income, depending on your situation, and you should not consider the variable income that results in specific situations, such as sales commissions, etc. Also try to take stock of the various expenses: monthly loans and insurance, credit card monthly payments, telephone, supermarket, meals, leisure, health, fuel / pass, clothing, education, etc. You can do this by, for example, our Financial Check-Up. Do not forget to include a contingency savings amount, ideally you should set aside about 10% of your income each month. If total spending exceeds your income, it may be best to reconsider the new loan and focus on balancing the accounts. If the credit you want is for the home, you should also consider the expenses inherent, such as taxes, electricity, water, gas, condominium, insurance, decoration, appliances, etc. In the case of a vehicle, it is necessary to add fuel, maintenance, insurance, revisions, etc.
If you have multiple credits, consider consolidating them. The consolidation is based on contracting a single credit to pay off all the credits that have to be incurred. In this way, you pay a single monthly payment within a fixed and extended period, guaranteeing you a reduction of the amount you pay monthly. If this can be a solution for you can know the Cetelem proposal.
Done the bills
With all the bills made and the amount that can be charged monthly with the new loan identified, inquire about the various credit lines available and compare them carefully. Always ask for the Norm Information Sheet (FIN), a document that credit institutions must make available to customers when presenting a simulation or credit proposal with the main characteristics of the contract and compare them.
Currently, a few clicks on the net are enough to have access to a simulator, among which ours, the DECO, or the DL Bank (housing), for example. These simulators let you know how much you will have to pay monthly for the loan granted. Use them, keeping in mind that, ideally, your effort rate should be between 30 and 40%. To calculate the effort rate you must divide the total value of your installments by the average monthly income, then multiply it by 100 to get the percentage.
Attention to APR
One of the points to consider if you want to apply for a loan is the interest rate that will be levied on it. The APR is one of the main variables, determining the overall costs of credit and allowing you to simultaneously assess the best credit conditions among the proposals. In addition to collection costs and interest payments, this fee includes taxes, commissions and compulsory insurance, as well as other charges.
Before signing and during the contract
Finally, clarify any doubts with the institution that you will use to obtain a credit, so that before you commit to signing a contract, know exactly what has been defined, and what to expect. This avoids unexpected unpleasant surprises in the future.
During the credit agreement, much can happen, and therefore in case of difficulty never hesitate to communicate with the institution where you contracted the credit to find a solution. Letting situations drag will only aggravate your situation, so please contact the institution.