Credit is Arizona title loans of money to a person or entity , who  undertakes to return it in a single payment or gradually (over a certain period, through a payment of installments). Usually  an interest is agreed  that compensates the credit giver for the time that he will not have that money to use it for other purposes. Keep reading this article for more information.

Because it is important?

Having access and knowing how to use a credit  is essential for daily life . It is likely that you already use a credit, either through a card or a loan.

Learning about this powerful tool allows you to use it better and gain quality of life. Credit, in the best possible conditions, can be the  way to reach  your  goals  or it can help you in a difficult moment  or in the face of an unforeseen event . The  credit can get well used to realize a dream  that seemed unattainable.

a credit ,  can be a powerful enemy for those who do not know how to use it responsibly, those who do not have a spending plan according to their reality, or those who do not develop and maintain adequate behavior to preserve their financial health.

The importance of access to credit:

Today, credit allows access to what , otherwise,  would take months or years to acquire .

It can be a very convenient way to do all kinds of shopping : from the simplest and most everyday (food, clothing, etc.) to the largest and most special (a house, a car, etc.).

Learning about how credit works –  whether it’s a credit card, loan, or purchase order –  can help you cut costs and avoid using more than adequate credit  .

What types of credits are there?

Commercial Credits : amounts of money that  are granted to companies  to satisfy their needs, whether financial, for the acquisition of goods, payment of services oriented to their operation or to refinance liabilities generated with other institutions and suppliers. They are normally  agreed to be paid in the short or medium term (from 1 to 4 years) .

Mortgage Credits : is the one that is granted the acquisition of a property or so that he has a sum of money for any purpose that he indicates, with the particularity that it guarantees its return by mortgaging an asset that may be the same or not, in favor of the creditor. They are  normally  agreed to be paid within the medium or long term.

Credit to the  consumption:  amount of  money that  is given to individuals  for the purchase of goods or payment for services.

Most common types of consumer credit in Uruguay:

• Cash credits .
• Credit Cards .
• Purchase Orders .

What requirements can you ask me when applying for a loan?

In order to  access a loan,  in general,  a series of requirements  established by the loan provider  must be met based on numerous variables . The goal is to  reduce the risk  of not getting your borrowed money back. Each financial institution establishes the requirements that it considers most appropriate, as well as the conditions for the granting (respecting the regulations of the Central Bank) that are expressed to the clients who decide to agree or not.

The most frequent requirements are related to:

Have an adequate business and credit history . Receive information about the commercial behavior and payment behavior of the applicant.

Demonstrate current and subsequent income that allows you to adequately service the debt that is going to be incurred . It is intended that the payment commitment can be met without inconvenience.

What costs can you charge me?

When you use credit you are borrowing money from someone else. Whoever receives it agrees to return it within the agreed deadlines (program or installment plan). Due to the deprivation in the possibility of having said money, the person who receives it pays a price : this price is known as current or compensatory interest and generally corresponds to a percentage of the total amount owed. Although there may be other associated costs. An example is the “membership” to a financial institution, which requires it as a condition to apply for a loan.

The best use of credit: When is  credit convenient ?:

When you are trying to get “big” goods  (a house, a car, appliances, etc.) while you are paying for it. A desired good is advanced, deferring its payment (as long as the payment can be met).

When unforeseen events occur : emergencies, family crises, unexpected illnesses, unique opportunities or offers, etc .; at times when you don’t have the necessary cash.

To manage all income using an expense record . Many times people prefer to consolidate (unify) their debt, in order to have a single credit, and thus better organize payments. This is recommended, provided that the total of the accounts can be met, every month that corresponds.

When  is  a credit not convenient ?

When  credit causes  that, due to the ease and convenience of use,  you spend more than your  borrowing capacity allows .

When the  payment of the credit absorbs the income necessary  for the payment of other  more essential expenses .

When you fall into  the temptation or the need to ” live on credit “, requesting one to pay another, repeatedly.