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Personal Finance: Risks of Asking for Informal Credit | nczp | FAMILY

Personal Finance: Risks of Asking for Informal Credit | nczp | FAMILY

They are advertised on posters, in ATMs, online or and many people, who are facing economic challenges Job is losing and salary reductionmostly those with families, turn around . However, it can be dangerous.

Javier Salinas, director of the Center for Entrepreneurship and Innovation at the Universidad del Pacífico (Emprende UP), points out that receiving money without preconditions in exchange for accepting very high interest rates leads to high debts that are difficult to get out of.

“Peruvians have become quite indebted with this species loanwhich should only be requested in an emergency (health, returning from a trip), and not because you want to buy an unnecessary product,” explains the economist.

Is this type of personal credit reliable?

It recommends always resorting to the formal side, where the financial companies, rural savings banks or Fintech that are under supervision Supervision of banks, insurance and AFP. He admits, however, that when faced with an economic emergency, there is often no other option but to resort to usurious investors, as the banks make such high demands that many are excluded from the system.

Ana Vera, managing director of the debt collection company Kobsa, indicates that there are several illegal methods of financing, and although they were not created in Peru, they were easily adapted. For example, known as “fast loans”, they give you fast money, without guarantees or recommendations, but you pay back a very high interest rate.

“It is also pawnshopwhere you offer an object as security for the requested amount and finally the family group, for which there is no endorsement or guarantee, but if you do not follow the relationship with the lender, it can become bankrupt, “he mentions.

Vera adds that interest rates for dealers are very high and you can pay up to 120% annual interest. For example, they lend you 1,500 soles at a rate of 10% (150 monthly), in one year it would be 1,800 (150 x12) plus 1,500 of principal, 3,300 soles would be paid.

Warning!  don't get loans through posters.
Warning! don’t get loans through posters.

Tips for Asking Formally

Both Salinas and Vera point out that this is not the time to cheat, but to reduce expenses and recommend not borrowing in foreign currencies, considering the possibility of a family business and holding cash meetings to generate income.

If you received payment from CTS, AFP, utilities or other additions it is preferable to pay installments of your loan or if it can be cancelled. Another option is that if you’ve already started paying it off, don’t ask for another loan that could put you in more debt.

Don’t expect to be notified in Infocorp

Most Peruvians have already returned to their jobs and businesses, trying to build a better future for themselves and their families. However, many are still in debt, mainly to financial companies. For Pilar Flores, Director of the Confidence Financial Risks division, there are several keys to manage your debt and improve your credit score.

The first, indicates that the expert is set quotas of the monthly amount you pay, but not more than 30% of your monthly income. “That is to say, if you earn 1,000 soles, the payment of all fees must be 300 soles. If you agree to pay, you must do so, so that you are not charged for non-compliance and get out of the budget,” he mentions.

If you believe that your ability to pay is minimal and you do not have the ability to meet the payments loanthe best thing would be to go to your bank and ask for a loan restructuring that suits your financial reality.

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