If you have decided to ask for financing, first you must know who to go to, and secondly be sure the solution you’re choosing will solve your situation.
There are different types of financing, like: mortgage, credit cards, credits, loans, etc. Loans and credits differ on its characteristics but both solve financing problems.
Credit or a credit line
Basically it’s a contract between a credit agency and a customer. Think about it as an agreement that states that the customer will have a determined amount of money to spend for a determined period. And, during this time the customer will decide the time and amount to use while the agency will calculate the interest to be paid. It doesn’t matter if all or part of the amount given is used because interest is based on the amount the customer uses and not the whole credit.
It is a contract between a financial agency and a customer. When signing the contract the customer agrees to receive an established quantity of money but is also obligated to pay back the whole amount that was given in installments. Usually installments are established in the contract and remain the same during the time that the contract lasts. You should know that every installment includes interest that you’ll be obligated to pay as well.
The three main differences between credit and loans are: the flexibility to use the money, the interests you pay and the purpose for asking for it.
If you are thinking about financing we advise to know ahead of time your needs and the financial agency that fits those needs. Both, loan and credits are a huge help during crisis time.
Remember, if you have any doubts as to what the best option is for you, you can always come to us as we are experts in the field of credit and debt, and we’re eager to help you by answering all of your questions!