Most of us are scared by the idea of managing our money and wealth, we just don’t know how to do it. Furthermore, we are unfamiliar with most of the terms related to savings, investment, or banking products. We lack financial education. Something that we are always on time to correct with a little effort, learning and desire. A minimum knowledge will allow us to decide if it is better to invest in equities or fixed income, access a credit or a loan, buy bitcoins, try works of art, bet on safe haven values such as gold or not to get involved between a mortgage loan or another with a mortgage guarantee.
Do you know what a guarantee, a promissory note, a risk situation or an APR is? The first refers to a guarantee that someone – guarantor – signs to take over a debt. The promissory note is a document in which a person or company agrees to pay a sum of money within a specific period.
A risk situation usually refers to a context of uncertainty generated by the possibility of not obtaining the expected return on an investment. The APR (Annual Equivalent Rate) refers to the payment of real interest that is acquired after applying for and obtaining a bank loan.
More often than it seems, our ignorance leads us to think that a loan and a credit it’s the same, but in stricto sensu it is not.
Do I ask for a loan or a credit?
Both are financing alternatives that almost all of us have hired at some time, but they are different financial products and respond to different needs. Do you want to know the differences? A loan is a sum of money that a bank grants us for a specific financing. One of the most popular is the mortgage loan to buy a house, but there are also personal or consumer loans.
When we talk about credit, we refer to a line of financing, the most eloquent example is the credit card. It provides liquidity to the client, be it a person or company, to finance purchases at low cost with a small interest and in installments.
As the capital used is paid back, the credit line becomes available in full again.
Back with the mortgage …
Another of the financial products that are often confused are the mortgage or mortgage loan and the home equity loan; They are not the same either and we realize when we hire any of them.
This product means that the client or borrower receives a sum of money –loan capital– from the lender –bank–, with the commitment to return it under certain conditions such as the interest rate, which can be fixed or variable; Commissions, generally for opening, repayment of debt or cancellation, in periodic installments, generally monthly and for a specific term –in some countries up to one hundred years–.
The additional guarantee is the home or property acquired by the client and that must be free of charges. By signing the mortgage, you have signed a mortgage loan with your entity. In the event of defaults, the bank can keep the property of the mortgaged asset.
Just as it is possible to request non-mortgage loans, you can also use a home as collateral to buy something other than another home. They are called home equity loans.
You can request it if you need liquidity to finance any purchase, except the acquisition of a home, the return guarantee being a property you own. The amount of the loan does not usually exceed 40% of the appraised price of the house that it offers as collateral.
Asnef’s blacklist
Asnef (National Association of Financial Credit Institutions). Entering this list assumes that your name is in a file of defaulters for having defaulted on a payment. The quantity does not matter.
To be or not to be. To be on the list, it is essential that the debt exists and is accredited, that it has expired and is enforceable and that the payment of the debt has been requested without success. It is mandatory that they notify you that you are going to be included in the list a maximum of 30 days before your inclusion.
And … what if I am? Forget about credits and loans. No financial institution will lend you money with a history of delinquency. There are companies in other sectors, such as telecommunications operators, that do not accept clients on delinquent lists.
How to get out? The best option to get off the delinquent list is to pay off the debt. You can also do nothing and wait six years. After that period, Asnef cannot save your data, whether or not the debt has been paid.
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