Learn to finance yourself: these are the 3 debts that everyone has

Posted on

The financing , used with head, allows us to acquire goods and services that otherwise we could hardly obtain. That’s why learning to finance you is so important. Typical examples are the car and housing. If it were not for the financing, it would be practically impossible to own these goods due to their high price, especially in the case of housing.

Normally, all people seek funding sometime in their lives. For this reason, this time we will review in Darrel Brandswell what are the three star debts that all people incur at some time in their life.

Fundamental keys to learn to finance you

Credit cards

Credit cards

A credit card allows us to have money that does not really belong to us. Unlike debit cards, in which we can only use the money we have in our checking account, credit cards are a source of third-party financing: the bank allows us to use your money through a credit line . Basically, there are two ways to return the money borrowed using a credit card:

  • Total payment of the money used at the end of the month (or beginning of the following month). If, for example, we use 500 euros of the credit card, on the 1st of the month following its use the bank will charge us in the current account the 500 euros. Most banks do not charge interest in this modality.
  • Deferred payment . On this occasion, the 500 euros used will be returned in installments that we will decide. For example, ten installments of 50 euros each. This method of payment does involve the payment of interest, which is also usually quite high.

Personal loan

Personal loan

A personal loan allows us to have a fixed amount of money that we will have to pay back to the bank along with some agreed interests beforehand. They are usually used for the purchase of vehicles, appliances, a home repair … Two are the main characteristics of any personal loan:

  • We will receive the full amount of money at one time . If you grant us a loan of 20,000 euros for the purchase of a vehicle, once approved this will be transferred to our account the entire 20,000 euros, and this will be the amount that we will have to repay, along with some interest.
  • The interest rate of the loan is known in advance and is fixed . If our loan has an interest rate of 6%, that will be the monthly percentage to be paid for the entire time we are repaying the debt.

At Darrel Brandswell we offer you a personal loan of up to 2,500 euros that you can repay in 24 months. Do you need more info?

Mortgage loan

Mortgage loan

Applying for a mortgage loan is, in almost all cases, the most important financial decision a person can make throughout his life . With a mortgage we ask the bank for a large amount of money that we will use to acquire a home. The repayment of mortgage loans is very long term: from 10 to 40 years. There are three main types of mortgages that currently exist in the market:

  • Fixed-rate mortgages : the interest rate is fixed for the entire term of credit repayment. This allows us to know in advance the fee we will pay each month, which will always be the same.
  • Variable rate mortgages : they are the most popular. The monthly fee depends on the reference interest rate used, usually the Euribor. A difference is usually added to this, so that the final interest rate is equal to “Differential + Euribor”.
  • Mixed-rate mortgages : they are a mixture of the previous two and include a stage with the fixed interest rate and another with the variable interest rate. An example would be: the first ten years of fixed interest rate and, as of year eleven, variable interest rate.

These are the three most popular forms of financing that almost everyone uses at some time in their lives. If you still have doubts about any of them, we will be happy to resolve it in the comments.