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Easy credit, difficult future: 7 points to consider before applying for one

There are credits that can be bad for your finances, find out what they are and follow these tips before applying for them.

7 min read

The opinions expressed by collaborators are personal.

Easy credit, difficult future: 7 points to consider before applying for one
Easy credit, difficult future: 7 points to consider before applying for one

Lately, my attention has been drawn to the aggressive expansion in Mexico that has had two types of loans that are affecting two very specific segments of the population, one is regulated and the other is not, and yet both are greatly damaging the finances of the people who They hire them since the normal interest and excessive delays of said credits lead to the loss of wealth and feed a vicious circle of debt in a country with serious and old problems in matters of culture and financial inclusion.

Below, I will tell you a bit about both types of credit and I hope it serves as a warning.

Payroll credits to government employees and IMSS and ISSSTE pensioners

The first type of credits that I want to tell you about are the credits linked to the payroll of state workers and pensioners. Financial companies that offer payroll credit without reviewing the credit bureau, without guarantee or endorsement and that generally have very unfavorable credit conditions for borrowers in terms of interest, commissions and terms.

And it is that the payroll discount that these firms operate is not like a normal bank credit that is discounted monthly from the same bank account of the borrower, but that they collect their monthly payments, that is, the discount is made from the government secretariats or the same pensions and not direct debiting to their bank accounts.

This should not be a problem if the credit was taken in a responsible manner, if the credit conditions granted by these financial companies had competitive market conditions and not as above the average as currently happens, and if government agencies do not allow them to compromise the wages of their workers to the point of losing their almost full salary month after month.

As we see there is a co-responsibility between those who request the credit, those who grant it and the government agencies that practically leave these state workers and retirees without salary or pension, as appropriate, to live.

It must be said that when the worker or pensioner accepts this type of credit, he signs a contract that establishes that the collection will be deducted directly from his payroll even before the money arrives at the bank and they accept it, but signing this contract does not oblige to continue in this way until the end of the credit, this discount can be canceled by making the corresponding request to the secretariat for which one works or, where appropriate, promoting a protection in such a situation, in this way the worker can continue with the payments already on his own account making them in cash directly to the financial.

It must be said that when the worker or pensioner accepts this type of credit, he signs a contract that establishes that the collection will be deducted directly from his payroll even before the money arrives at the bank and they accept it, but signing this contract does not oblige to continue in this way until the end of the credit, this discount can be canceled by making the corresponding request to the secretariat for which one works or, where appropriate, promoting a protection in such a situation, in this way the worker can continue with the payments already on his own account making them in cash directly to the financial.

And it is that this under certain circumstances could be considered a modality of fraud according to the federal penal code in article 387, section VIII which textually says:

“To the one who, using ignorance or the bad economic conditions of a person, obtains from this user advantages through contracts or agreements in which credits or profits are stipulated that are superior to those usual in the market”

That said, my friends, state workers and pensioners, try by all means not to resort to this type of financing because it can get you into serious financial problems and compromise the stability of your entire family.

Drop-by-drop credits

For some years now, a group of people have spread throughout the cities and urban areas of the country offering loans “drop by drop”, a scheme that consists of granting small credits to the floor and in cash with daily collection and at home, These loans usually have a presumably low interest, of 10 or 20% per month and others of 1, 2 or 3% per day, which if we make accounts turn out to be 120%, 240% or 365, 730 or 1,095% respectively of annual interest .

These microcredits are not endorsed by any financial institution and are not regulated in any way, and their target market is small merchants and street vendors who generally do not have access to other forms of formal financing.

Lenders settle in commercial areas and offer loans ranging from 2,000 to 60,000 pesos without the need for a contract and, given their excessive interest rates, little by little they become unpayable debts and merchants become extorted and violence.

Currently, there is a proposal for the modification of the federal penal code regarding the definition and punishment of the crime of “fraud” in order to face this usury modality and the Financial Intelligence Unit of Mexico City has begun to give it follow-up on said phenomenon in order to identify the source of the resources of the people participating in the scheme.

Therefore, I share 7 points to consider before applying for a credit:

  1. Never exceed your payment capacity : That is, the payment of your monthly commitments should not exceed 30% of your monthly income.
  2. Only go to formal institutions: Check that the institution to which you approach to apply for credit is endorsed by the National Banking Commission, if you have doubts or mistrust, before signing any contract or advancing any money, contact CONDUSEF to request information about it. of the credit you want to take.
  3. Know CAT: Make sure you know the total annual cost of the credit you want and compare between institutions to see which is the most competitive.
  4. It establishes the objectives: The credit should only be directed to the acquisition of durable assets such as houses and land, or productive investment in businesses that generate returns above the cost of the same credit, and to face emergencies such as illness or accident.
  5. Please read: Even if it takes you 3 hours to read the contract, you can order a copy and read it at home calmly, but please read carefully the credit agreements that you sign and if you have any doubts or doubts, ask or decline.
  6. Cool head: The best time to ask for credit is when you don't need it, that's when you can truly calmly and objectively analyze the opening, and productive use of credit without urgency.
  7. Common sense: Most scams and financial mistakes can be avoided only with common sense, remember that if it is very good to be true, it most likely is not.

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