If you have been considering requesting a monetary aid for a certain project that you have in mind, the words credit and loan have crossed your mind, they may be mistaken as synonyms for each other, and although both financial products are similar and they coincide in being money ceded by the entity that gives it to you, there are differences between both.
For the reason already stated, before making any request for processing you should analyze which of the two suits you best, whether a loan or a loan . This task is not based on seeing which is better than the other, depending on your capital and payment needs, which may be different according to each person’s plans.
Compare what each one gives you
The first item to analyze is when and how much money you need. It turns out that the paperwork for a loan is usually a bit longer than a loan , which is directly proportional to the amount of money that each one grants, the first, when granting larger sums, requires more paperwork, where you must justify and Explain what you will do with the requested capital, it is a slightly longer process that is well rewarded; the second, for its part, grants amounts, generally not so high, and in many cases you should not present papers that prove your plans with money, only those that allow you to study credit history and ability to pay.
The second thing to consider is, if you need to have all the money you have requested jointly or rather plan to use it in parts. In case you need the money in full for a specific date or time, what is convenient is a loan, which will give you all the immediate liquidity to cover your plans. On the other hand, if rather, you want to have money to use gradually and you do not even know if you will spend it all, a loan becomes the right option.
Compare the way you will return it
If you already know how you need the money, you are one step away from deciding what is best for you . Now it’s up to you to evaluate if the way you’re willing to replace the loan is in line with what you’ve planned.
In the first place, you should know that a loan usually has fixed interest rates while you can pay it in a long period of time, in many cases, years, this means that even if in the end you return much more money to the bank than the that you gave initially, but due to the prolonged time that you do not see it as such, the date set as a limit to pay the total loan is set from the beginning.
A credit offers interest rates depending on what you consume, although shorter periods for cancellation, with the advantage that they are not fixed and will derive from how you use the money that has been given to you.
By defining criteria of how you need money and how you are willing to repay it, you can safely choose what is best for you , whether a loan or a loan.