A loan with months of grace, is it really convenient for me?

September 19, 2019 0 Comments

Ana wants to apply for a loan to buy a new living room set and a new kitchen. She used the Fagin personal loan comparator and found the best option. He requested the loan and when he spoke with the advisor, he offered him the possibility of having some “free” months, that is, not paying his fee. Ana wonders if such a wonder will be true or if there will be dust hidden under the carpet.

Many benefits

Many benefits

Well, here we have the answer for Ana. When they offer us a consumer, vehicle or mortgage loan, they also offer us a thousand benefits or options that apparently paint our lives in colors. However, unless we have the right information, we could be painting our financial future black.

“Loans with up to six months of grace” or “Do not pay a fee in December” are some of the messages that financial institutions usually use to offer the months of grace. But what are they? They refer to those fees that the client may not pay, that is to say that in the agreed months the user will not make the normal payment of his fee.

Now, not everything is happiness in these options. Something that we must be clear about is that the banking institution is not going to lose money, so it is not really that you are not paying, but that you are postponing it for a month. So far so good, right? But what they did not tell you is that the interests continue to run and add to the capital owed, so you do not pay a fee but what you will pay will be the interest and these will be added to the total of your debt. This operation is repeated every time you enter a month of grace.

For example:

If you request a loan of s /. 9000 to 18 months with 2 months of grace, your fees will remain 18 but the amount of the fees will vary, since you will have to charge the interest of the months of grace, that is, it generates an extra expense.

When should the months of grace be accepted?

When should the months of grace be accepted?

When you know that really that month you will be in a critical situation and you will not be able to cancel the fee, so assuming the cost of interest becomes a better option than being late, since it does not affect your score with the financial institution.

We must bear in mind that the months of grace are not “months free of payment”, but an option to consider when we know in advance that in some period of time we will not be able to cancel the credit quota.

Ana has to think about this and see what months are the ones that offer her grace. If she knows she won’t have problems canceling the monthly fee, then the recommendation is not to pay extra interest for the pure ones.

If, like Ana, you want to obtain a personal loan, the Fagin personal loan comparator shows you the market options, interest rates and calculates how much your monthly installment would be.
Also, don’t forget to review the recommendations for a good loan to get the best possible benefit.