Debts in credit cards or personal loans

Debts in credit cards or personal loans

In the world there are millions of people who have debts in credit cards or personal loans, while others have savings in the financial system. On the one hand we have debtors who pay high interest rates and on the other hand savers who receive a very low interest rate.

The lack of information,

The lack of information,

A shortage of liquidity and higher income opportunities push many people to request expensive loans that take a large part of your work. Savers look for security in large banks that generally offer interest rates below inflation.

Given this situation there is the possibility of family or friends credit, that is to borrow money from people who trust our word, those whom we have always fulfilled.
Building trust is a very important issue to get low-cost credit, however you have to work hard to achieve it. Returning a loan, arriving at the promised time, returning the call, warning on time and working responsibly, are signs that allow building trust.

THE CASE

THE CASE

He has a credit card debt for 10,000 soles and the bank has offered him a payment plan in view that his 530 soles per month, only allow him to pay the minimum fee and represent 5.3% monthly interest, he realizes that his Debt is never reduced. The bank’s proposal is for Pedreng to pay 528.87 soles for 36 months at a monthly rate of 4%. For Pedreng, it is a relieving proposal because his debt would go down, but he would still be adjusted with the payment of his family’s bills.

Pedreng met with his cousin Waning who has a very prosperous economic situation, he talked about his debt, but also of his disorderly financial life in which he bought on impulse and had no idea of ​​managing a budget, now all these deficiencies I was going to correct them because I had been informed about personal finance issues. Waning instead had orderly finances, he knew what the limit of his expenses was, he gave himself his tastes because he found new sources of income thanks to his entrepreneurial spirit.

Waning had several savings and investment accounts, one of them was a savings in the bank that paid 1.5% annually, this was 0.13% monthly interest. While it is true Waning felt safe in a large bank, but he realized that the gain was infamous. His 10,000 soles would generate 233 soles in 36 months, how much he would like to have a savings account that paid him 1% monthly, so he would accumulate 1,957 soles of interest. This would be 8.4 times the interest he was receiving, but there was no bank to pay him this sum of money, moreover, Waning for his entrepreneurial spirit wanted to have a sum of money every month to invest in his small fast-return businesses.

Pedreng and Waning exchanged opinions about their debt and savings respectively, until Waning realized that Pedreng, as long as he had known him, had always kept his word, always returned whatever he borrowed, his parents instilled values ​​that he always honored. Waning proposed to lend him his 10,000 soles in exchange for paying him an interest rate of 1% monthly, this was 12.7% annual interest.

For Pedreng, this solution seemed to him to have fallen from the sky because in the schedule that the bank sent him for 36 months he would pay 9,039 soles of interest and instead he would now pay 1,957 soles, almost a fifth, this thanks to his cousin’s loan. However, for Waning it was a test and an important risk for what he asked his cousin to sign the acceptance of 36 letters for 332.14 soles each.

Pedreng would pay 332.14 soles of monthly fee instead of 528.87, it was a monthly saving of 196.73, now if he could attend with more tranquility his other basic expenses.
Waning for his part would no longer withdraw 284.25 from the bank, but 332.14 of his cousin’s monthly payment, instead of receiving 233 soles of interest from the bank in 36 months he would now receive 1957 soles from his cousin.

This financial solution is a useful practice that is observed among relatives or friends, but you need to have developed a lot of responsibility, build trust and commitment with the relative or friend who lends the money. Failure to comply with the promised quota would collapse the trust deposited, even if it is a one-day delay, so if you want to get lower cost credits, cultivate the culture of responsibility, build trust which will allow you to grow in the financial aspect and also in the social