Many people have found an outlet for the financial crisis by working autonomously . Being your own boss and starting a new business can be a great alternative, using loans as a first financial contribution.
With this in mind, we have prepared this article explaining how to apply for a standalone loan and how to identify the best cost-benefit ratio. Check out!
Total Effective Cost
The best way to compare the cost-effectiveness of different loans is through the so-called Total Effective Cost (CET) . This indicator is the sum of all that is charged from the customer to a loan: interest, charges, fees charged by companies, insurance, taxes and fees.
Some financial companies charge fees for services and transactions when it comes to offering a loan, and this amount is often not disclosed to the CET in a detailed way, deceiving the customer.
Good lender does not charge fees and is always transparent with the consumer, leaving their Total Cost Effectiveness always visible for you to choose clearly.
The CET is expressed from a monthly or annual percentage . In our company, the initial term of the minimum payment is of 2 months and maximum of 12 months. The total effective cost (CET) is 13.10% per month (338.08% per year).
When comparing loans offered by different companies, if the customer analyzes loans with the same value and the same term , the company that offers the lowest CET is the one that has the best cost-benefit ratio.
Measuring loan benefits
Those who work as self-employed usually contract loans with the following purposes: to pay debts or to apply the money in the purchase of assets for their business (real estate, machinery, equipment, among others).
It is important to perform calculations to project what financial return the use of borrowed money will have for your business. For example: what will be the profit given by the machine that I will buy, and how long will it allow me to pay for the money?
If the borrowed money serves to pay off debts, it is important to compare the term and interest of the arrears with the money that will be paid in the loan monthly. After all, one debt is being replaced by another, with an extended term.
For those who are going to lend money to build, for example, it can be a good alternative to use the money in a partial way. Use the credit limit to spend the money partially, like on a credit card.
For example, if you intend to renovate your trade and spend $ 3,000, you can use the first $ 1,500 to purchase material, leaving the remainder as a limit for later use. This helps you save money and better control borrowed money.
The simulation is fundamental
On the internet it is possible to find specific calculators to carry out the estimation of interest, the term and payment conditions of different types of loans. Access these services and have a projection of your spending in the future.
Now that you know how to identify the best cost-benefit of the loan for self-employed, click here and ask for the amount you need.