Have you noticed that taking a loan is more expensive and that the interest you will have to pay for the money is higher than a year ago?
The cost of taking a loan became more expensive in 2022. People who this year accessed a personal loan with an institution will pay more for it and that is that in 2022 the reference interest rate of the Bank of Mexico (Banxico), and that financial entities use to calculate the interest that they will charge for their credit products, will close at 10.50% from 5.50% at which it ended last year.
The increase that Banxico has made to its reference interest rate, in order to contain inflation that is at the highest levels of the last 22 years and that closed at 7.77% in the first half of December, impacts the cost of credits, especially those that are designed at a variable rate, such as credit cards, but in personal loans it impacts all those that are acquired from scratch because they are considered at a higher price.
Estimates are that in February 2023 the Bank of Mexico will raise its benchmark interest rate again and some credit products will also increase their costs.
If you are planning to access a personal loan to close the year or to face the January slope, you should consider that you will pay more for it; however, if you compare and find the loan that best suits your needs and income, you will be able to pay a fairer or more accessible cost.
According to data from the Association of Banks of Mexico (ABM), from October last year to October this year, personal loans report increases of almost three percentage points, 2.95%, and the average rate stands at 42.19 percent.
The interest rate is calculated based on various elements, such as the credit history of the person requesting the loan, their age, income level, credit terms, to name a few.
For example, the interest on a loan of 10,000 pesos for a 35-year-old person who earns 15,000 pesos a month and who chooses to pay his 12-month loan is between 19.8 and 32.1%, that is, in one year he could pay 11,571 pesos, 1,571 pesos of interest or disbursing 12,223 pesos in the most expensive option, according to data provided by the Financial Services Comparator of the Bank of Mexico.
Before choosing the credit, it is important to analyze the elements that each option contemplates. In the simulator carried out, the institution with the lowest rate asks for an initial payment of 290 pesos; in the second option, the initial commission is 116 pesos.
Another tool that can be used to review how much a personal loan can cost you is the Condusef’s Review, Compare and Decide microsite.
For a loan of this type of 10,000 for 12 months for a person who earns 15,000 pesos a month, the entity that offers the lowest interest is a popular financial company and it is 33.29%, at the end of the term it is estimated that 12,466 would be paid pesos. Another option considers a rate of 76% and for which in one year you would end up paying 15,388 pesos. The most expensive alternative supposes an interest of 129.90% and final payment of the credit of 20,106 pesos.
It is important that before choosing a loan the amortization table is analyzed, that is, the document detailing the monthly payments that will be made during the selected period to be paid, it is important to analyze this on the income that is received and to supervise that the monthly payments do not exceed 30% of the salary, which is the percentage that the institutions consider to determine if you are an over-indebted person or not.
Complaints about the collection of personal loans grow
Defense actions for users of personal loans, from January to November of this year, report a growth of 4%, mainly driven by a greater number of claims regarding collection offices, according to data from the Condusef Statistical Processor.
In total, as of the eleventh month of the year, 20,436 defense actions have been registered in the personal credit product, of these 7,137 were reported to the Registry of Collection Offices, 9.9% more than in the same period last year; 2,154 were due to disagreements with the credit balance or the amount of the amortizations.
In addition to the interest rate, you must compare the Total Annual Cost (CAT), which is what you will end up paying to the financial institution that has released the loan.
