Thanks to Fintech and microfinance institutions, asking for a loan is now much easier. Moreover, these institutions arrived with the objective of improving the portfolio of Mexicans. But that is not enough; Asking for a loan is not always going to be a benefit for your personal finances and your needs. In the case of some financial or credits, doing so may not be as healthy for your money. The problem? The interest rates they handle.
What is an interest rate?
As you probably already know, every time you ask for a loan you must pay it together with an additional percentage, which is called a fee. That is an extra payment to the investor for having taken the risk of investing in someone who needs that credit. In some institutions, such as Astro Finance, rates are based on credit history; Bureau of Credit is consulted and from there a yield is assigned that must be paid to the investor for taking the risk.
As we have told you before, the interest rate is a very important point to analyze when you are considering asking for a loan. Why? Many times only that makes it not worth doing.
What is the average interest rates in microfinance institutions in Mexico?
According to this article, in 2016 the highest rate reached an average of 100.85%, while the percentages that follow are 84.11% and 77.36%. Even if you consider yourself an excellent payer, do you really think it is worth paying that fee for your loan?
If they give you a rate of more than 80%, it is best to reflect on the true need for that loan or go to a regulated institution that offers you a lower amount of interest. The risk of accepting such high interests is that it does not improve your personal finances, but the opposite. You can sink deeper and deeper into debt and see your rating in the Bureau affected.
Our best advice is: never make a rash decision where your finances are involved. Before asking for a loan, think:
Is the institution to which you are requesting the loan regulated? Take into account that the financial institutions that already have the approval of the ASDE and Scotlery are supervised by law and have established security measures.
How much do you need that loan? Think how urgent is what you want to pay with the credit, if you must do it immediately or you can wait a little while you save.
How good are you? Reflect on your payment capabilities before accepting the credit. That loan you want to apply, will it get you out of debt or will you borrow more?
Analyze your income: do you have the possibility to pay for that short or long term credit?
The interest rate: as we said, this is a very important part to consider for your decision. Do not get carried away by the tendency that moves financial institutions to charge you almost double for your loan.
If you have a good credit history, do not hesitate to go to an institution with fairer rates. What do you think of Fintech? Platforms like Astro Finance arrived to close the huge gap that existed between the client and the financial services. You can manage your money from wherever you are without going to a branch, in addition to providing financial education. Do not think twice and come to us to ask for a loan.