Diana is looking for financing to remodel her home. Among other things, in addition to painting, you plan to put new flooring and waterproofing, so you will have to spend a good amount of money to achieve your goal.
To achieve this goal and keep her finances healthy , Diana should follow some recommendations when applying for a loan. Here are some tips to keep in mind when looking for financing.
Diana’s first step is to estimate how much money she will need for her project. To do this, you must consider both materials, such as the salary of the person or people who will do all the painting, installation and waterproofing work.
Ideally, you have already requested a quote and made a list of the materials you are going to buy. To that amount, you must add an additional percentage, in case there is something unforeseen, but it should not be exceeded either.
If you ask for too much money, that amount will end up spending it on something that you did not plan, but in the end you will have to pay it back with the corresponding interest on the credit.
On the other hand, if it is very little, you will probably have to resort to a credit card or other loans, which will be accumulating several debts at the same time and this in the end can complicate the monthly payments that you must make.
Now that Diana knows how much the loan she is requesting should be to complete her project, she will have to calculate how much she can pay per month without affecting her other expenses.
The recommendation is that in the payment of the credits, no more than 30% of the income is allocated. So if Diana earns 15,000 pesos a month, the most she can pay per month is 4,500 pesos.
This way you will have your other needs covered, such as paying for food, transportation and even entertainment.
Credit institutions have different financial instruments and can adjust credits to the payment capabilities of each client. This means that the monthly payments and the term are different for each person.
Diana must know exactly how much she is going to pay per month, for how long, what the interest rate is and if there are other fees, such as account management, commission for opening, penalty for early payments or insurance payment.
In addition, you should read the contract well and if there is any doubt, the financial advisor should be able to solve it, so that everything is clear.
Once Diana has obtained financing, it is important that she keep all payments current. The main reasons are that this avoids additional charges for delays, that the term is extended indefinitely and that the debt is increased by the increase in interest.
Another of the most important reasons is that it will also maintain a good credit history. If you later want other financing for another project, it will be much easier to access it and obtain better conditions, such as a lower interest rate.
Now Diana already knows what tips she should follow to achieve her goal and at the same time keep her economy healthy.