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If you are going to get into debt during this date, do it right: learn about the different financing modalities, learn to choose the number of installments and the maximum purchase amount.
This November 21 will be the third day without VAT in Colombia. By now it is likely that you will already be tempted by one or more articles due to the multi-million dollar marketing campaigns that brands deploy on this date. Ideally, these opportunities are taken through savings, but if you are going to go into debt try to do it right. For this, The viewer It explains the three criteria to take into account to avoid that credit becomes a chronic debt in 2021.
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The type of indebtedness
The first thing to consider is the type of financing you will use to indulge yourself on this date. Clearly the main factor to consider must be the cost, since the interests can erase any benefit that of this date in which the VAT of 19% must not be paid.
So, the first option to consider should be the payroll advance: it is a modality in which the bank lends you the equivalent of a fraction of the salary, usually 30%, without charging interest. However, you have to pay a fee that does not usually exceed $ 20,000. The service is available in practically any bank, therefore, the entity in which they consign the salary must have this alternative.
If the payroll advance is not an option, then you must resort to a consumer loan. Draft loans are generally the cheapest, followed by free investment loans. Fortunately, the virtual branches of several banks already allow you to request this type of loan through the application in a few minutes.
The last option should be credit cards, as they have the most expensive interest on the market (25% EA on average), literally bordering on the usury rate. In fact, with this level of interest, almost all the benefit that the day gives without VAT will be lost if the purchase is deferred for more than one year.
However, this instrument has the advantage that if you buy at an installment you do not charge interest. What may be interesting in November, since they pay the premium no later than December 20, then with the card (buying at a fee) this obligation can be postponed to pay it when the income shock arrives. But if you can’t pay off your purchase in one fell swoop, then you need to think carefully about the term of this debt.
The ideal odds
For any credit it must be taken into account that: the more installments the more interest is paid. For example: a $ 2 million computer that is purchased with a credit card, with an interest of 25% EA, for a term of 6 months, generates interest for $ 133,420; while at 12 months it would generate interest for $ 252,312.
However, it should also be borne in mind that the fewer installments the higher the monthly payments will be, and there will always be the risk of suffocating finances (that you will run out of money for your other expenses to pay this debt). So, a balance must be sought according to the financial health of each person:
- If you do not have debts, the recommendation is to choose a number of installments that involve monthly payments of a maximum of 10% of your monthly income.
- If you have debts that already represent monthly payments of more than 10% of your monthly income, the debts that you acquire on the Day without VAT must be made with credits whose installments imply monthly payments of less than 5%. But, in this case, it is recommended that you reconsider buying on this date, since the healthiest thing is to avoid getting more debt. In addition, you may have to borrow more than 12 months, which drastically reduces the benefits of the Day without VAT:
- And if you have debts that already represent monthly payments of more than 15% of your monthly income, you should avoid requesting new loans because in this case you are already suffering from severe over-indebtedness. In fact, so that finances do not suffocate more, they would have to resort to loans of more than two years: which would erase all the benefits of the Day without VAT and even represents an extra cost due to the large amount of interest.
It is clear that it can be difficult to do the calculations to determine the monthly payments that a certain number of installments implies. For this you can download or search the internet for a credit calculator. Just by entering the data of the amount of the credit (purchase) and the interest, you can know how the payments would be depending on the term of the loan. The idea is that you try several options until you find the one that represents the ideal value of the monthly payments according to your financial health.
There is a wide range of credit calculators, for example the Saber Más de Asobancaria simulator (See here).
The price of purchases
It is very important that you know the limits of the purchases you can make through debt. It will never be healthy for you to buy a non-essential item that represents several months of salary, even if it is on a Day without VAT and that has a mega discount. Promotions can also be harmful if poorly chosen.
The ideal is to buy items whose price represents 50% of the monthly salary, or a maximum of 60% if it is something that you really want or need. This rule will allow you to pay the debt in moderate installments, of less than six months with installments of less than 10% of the monthly salary (with reasonable interest).
If you follow these three criteria, you will have the best of both worlds: you will buy through healthy debt, and you can see real economic benefits of the day without VAT.
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