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The great variety of personal loans that exist in the market is growing. In recent years, the number of entities granting financing has increased, which is an opportunity for the consumer. In addition, the improvement of the economic situation has resulted in us finding cheap personal loans.

What is considered cheap personal loans?

In the market, we can find a wide variety of consumer loans. However, not all have good conditions. For this reason, to label a product as a cheap personal loan, it must have a cost lower than the average of the type of credit that we hire.

  • If we talk about mini-credits, your average interest is 1.1% per day, that is, for a loan of 100 euros to be repaid in 30 days we will have to add a cost of 33 euros. Therefore, any price below the average could be considered cheap, like any credit with discounts and offers that make a loan even free.

  • Spanish consumer loans tend to have an APR that ranges between 7 and 8%. Therefore, any product whose interest is below this figure will be considered as a cheap personal loan.

In addition, one of the advantages that we find as consumers are that there are specific payday loans to carry out a project- Payday Loan Online Application- Same Day Payday Loans Instant … Therefore, we can request it if we plan to reform our home, hold a celebration or go on a trip for a few days. Contrary to what may seem, we will not find worse conditions in these cases.

How do I identify a cheap personal loan?

If we are looking for cheap personal loans, the first thing we need to know is in what situation the current credit market is. Knowing the average APR established by the Bank of Spain can be a good way to start. This indicator will allow us to discard those products that, although at first, we may have found them interesting, have a much higher percentage.

From here, the time has come to look for easy and quick personal loans. One way to identify consumer loans with good conditions is by accessing comparators such as HelpMyCash. In these websites, we will find a wide variety of products that are marketed in the market, which will help us access those that best suit what we are looking for. In addition, we can obtain a detailed report of the cost of several of them if we enter the amount we need, the term or the interest we are willing to pay.

Depending on the conditions, we can select the most appropriate options and with the lowest possible interest. Then, the time has come to request information from various entities to know whether or not they grant us the money we need and what is the cost that we will have to pay. Making numbers is essential to make sure we are making the best decision.

Beware of hiring a cheap consumer credit

Before hiring personal loans online, it is not superfluous to have very clear the steps that are detailed in the following infographic, which will help us find the cheapest loans and with the most suitable conditions for us.

However, the key to finding the best financial product is always to compare and keep in mind what our financial situation is. The action of comparing can be done finally through the free tools that make HelpMyCash available to all users and that allow analyzing the different credits off the market quickly.

What expenses can a cheap personal loan have?

Cheap personal loans are those that do not include commissions or linked products. If we want to ensure that the product for which we have decided will not increase in the future, it is advisable to read the fine print of the contract before signing. Normally, these added expenses will also depend on the way we go to obtain financing. Consumer loans that commercialize entities usually include aspects of this type. However, the same is not true if we go to private companies.

If we know what are the aspects that can make us end up returning more money than we had calculated with the capital and interest, here are some expenses that can make a cheap personal loan less so :

  1. Commission study. Although it is unusual, we may pay an amount for the entity to study our financial profile to decide if we are eligible or not to receive credit. Only and exclusively we will have to face this expense if we finally hire the credit that we have requested.

  2. Opening commission. It is one of the most common commissions and is applied to cover the expenses incurred by the entity when granting the credit, for example, administrative ones. If the entity applies this commission, you can try to negotiate with it its elimination or, if this is not possible, a reduction, although probably ask for something in return, such as a greater link.

  3. Commission for early repayment. We will only pay this penalty in the event that we have enough money to repay the credit before the term that appears in the contract. This commission is regulated and can not exceed a certain percentage that varies depending on the term remaining until the expiration.

  4. Notary costs. The obligation to sign the contract before a notary is usually typical of large personal loans. If this is our case, we will have to pay this additional expense or opt for another product from the market that does not include it.

Before applying for a personal loan without a guarantee, we must take into account the previous costs and how much the consumer credit for which we have decided will increase. To avoid that the numbers that we had calculated have nothing to do with those of reality, it is advisable to read the contract before signing it and make sure that we understand all the conditions that appear there.

Are there free personal loans?

Although 0% consumer loans may appear to be cheap personal loans, this is not always the case. If this figure corresponds to the TIN, it means that we will not have to pay interest. However, this does not mean that a product with these characteristics cannot include some type of commission or require contracting, for example, insurance.

If we really look for cheap personal loans, we should look at the APR. This percentage will give us an idea of the total cost that we will pay for a certain consumer credit. In the case of being zero, then we will be facing personal loans without commissions or interests. However, even if the APR is 0%, we must monitor whether they require the hiring of other related products of the company.

Let’s see an example

A loan of one thousand euros with a repayment term of one year and an interest of 5% would generate a total interest of 27.30 euros. Your APR would be 5.11%. Now suppose that the same loan has no interest, but has an opening commission of 2% and a study commission of 2%; In total, 40 euros of expenditure. In this case, the APR would be 7.86%. In other words, a 0% TIN loan is no guarantee that it will be free. Only if the APR is 0% will we know that the loan has no interest or commissions.