Before acquiring a good, and especially when hiring a product financial Ideally, you should report correctly so that you can make the best decision as consumer. This is known to the National Commission for the Defense of Users of Financial Services (Condusef) and that’s why he created a calculator so that users in Mexico can make an estimate to decide if it is their best option to request a payroll loan to pay off a credit card with debt.
This tool will be of help for Mexicans to compare their alternatives since in the country it is very common that personal loans are taken out to make the payment of other debts existing, as disclosed by the National Survey on Household Finances, that elaborates and publishes the National Institute of Statistic and Geography (Inegi) in collaboration with the Bank of Mexico (Banxico).
The results of this study suggest that the majority of personal or loans of payroll are used mainly in food or household expenses with a (23%), but up to 14% of the loans that are requested in Mexico are used to settle other debts, such as those contracted by the poorly informed handling of credit cards, but we will see what happens when you follow this system to cover one debt with another.
Is it a good idea to take out a loan to pay my credit card?
According to the Condusef, who created this program called Minimum Pay Simulator Besides of Personal Credit and Payroll Simulator that between all of them allow you to know the best conditions to contract a payroll loan so that you can pay off the overdue balance that your credit card.
The procedure consists of comparing the different financing conditions with the total amount of your debt either on your credit card or on the payroll loan, analyzing the interest rates, the minimum payment at the beginning of the credit or the monthly payments.
It is with this calculator that you can make a better decision, as exemplified by the Condusef Well, if you feed the tool with your debt data, such as the total amount that, in the case of amounting to 70 thousand pesos and the annual interest rate is 40%, you will be asked for a minimum payment of 1,250 pesos per a term of up to 10 years, but after that time you would have paid 240 thousand pesos.
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This borrower will have the option of reviewing under what conditions the credit of payroll, being the one that best suits you one that offers you an annual interest rate of 27.9%, so your monthly payments would be set at 3,152 pesos to complete the payments within 3 years, totaling 109,000 pesos.
With these options on the table, the debtor can better decide whether to continue paying the credit card directly where in the end they would pay 170 thousand pesos more than the original amount, or take out the payroll credit and only pay 39 thousand more than the capital from the beginning, over the course of 3 years only.
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With these data it is easier to come to a conclusion on how to manage debts to get out as soon as you can without affecting your Credit bureau. For it to be convenient for you to take the payroll loan, it must have a interest rate lower, the credit they lend you must be enough to fully cover the debt.
Once you pay off your credit card, you must cancel it immediately and if it gives you the option in the course of it, go ahead with the payments you can to amortize the capital and save interest.
For more information on this and other topics, visit the Credits section of My Pocket.
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