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What are the most common credits in Spain?

Since decades ago capitalism was installed at the base of our society, it is essential to face a large amount of expenses on a daily basis. But sometimes, for many people, facing these expenses is not easy at all because they do not have the necessary liquidity at the time of having to make the payment, either due to lack of income or due to the difference in the date between when the money is received. and when you need to have it available.

It is in these emergency situations that the average Spaniard most often resorts to the fast loanswhich today are the most widespread solution when it comes to solving a specific liquidity problem, but also when it is simply a question of “indulging yourself”.

Whatever the reason is why a person resorts to credits, there are common cases that involve expenses and originate debts that we must take into account and anticipate so as not to have a major problem when dealing with them.

Most common debts contracted by Spaniards

The first source of debt for the common inhabitants of our country is housing. Mortgages are the most requested credits in our country since it is the main way to finance the acquisition of a new home. In these cases, the bank uses the home itself to guarantee the return of the amount owed. Current mortgages are usually signed, on average, for about 35 years, although they can even reach 45 in some special situations, becoming a really heavy burden.

Personal and consumer loans are other of the most common loans among Spanish families. These are those that are requested to buy goods of a certain value, although of a lower level than a home. A good example would be the financing of a car, a vacation, the cost of a wedding or a home renovation. They are usually for an average amount of between 10,000 and 20,000 euros and normally the payment term is 6 to 8 years.

Another fairly common form of financing, perhaps because it is the most practical and fastest of all, are credit cards. In most cases, these allow large purchases to be made, delaying or splitting the payment. Although its advantages are obvious due to its ease of use, they also generally involve higher interests, so it is necessary to monitor their use so as not to exceed our real financial capacity.

Banks no longer only offer loans

In recent years, a large number of companies called Fintech have appeared that, without being banks, offer the possibility of financing families on a low and medium scale.

Many of them have their own credit cards, in some cases with more than interesting conditions, even better than banks, but their main source of capitalization are the so-called microcredits. These are instruments that offer the possibility of obtaining small amounts of money to solve a specific moment of lack of liquidity. Their advantage is that they do not usually require guarantees or a large amount of documentation and they are obtained within 24-48 hours, so they are useful precisely when time is of the essence.

Although they are a highly recommended solution for this type of “fast” and specific needs, they are not so when it comes to payments over time, since interest can grow faster than traditional credits do.

Another advantage is that they tend to be more flexible with credit scoring.

What is credit scoring?

It is simply a tool used by financial institutions to assess the risk involved in granting a loan to a certain client. Depending on the financial profile detailed in the credit scoring, the request will be approved or rejected and the conditions offered can be customized.

It is an automatic process that does not usually take any time and that limits the possibilities of customers defaulting because they do not have the necessary capacity to meet the costs of the credit.

For the credit score to be positive, it is usually enough to have a demonstrable regular source of income and a clean credit history of defaults. With these characteristics, it will be easier to have the necessary money on credit.

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