Any personal loan provided by Blue Trust Loans shall be reimbursed in accordance with the conditions laid down in the contract. This means that a borrower must pay back the money no matter what it is used for. For instance, if a person uses their loan to buy goods or services and those do not meet the borrower’s expectations, they are still liable for the loan.
Characteristics of a personal loan
For an amount between 20,000 and 50,000 dollars, people will find commercial loan offers at most credit institutions. Depending on the lender and the borrower’s profile (income, debt capacity) as well as what the money is used for, interest rates are generally fixed, but there is nothing to prevent financial institutions from offering revisable rates. The debt ratio is the main constraint, as the amount people can claim is limited to this indicator, which sets usage at 33% of the borrower’s total income.
To estimate your loan amount, although each institution has its own calculation rules, tally the total number of expenses: rent, monthly repayments on various debts (mortgage, consumer loans, etc.) and divide the result obtained by the income, then multiply by hundred to get a percentage.
Example of a debt ratio
For a couple living together, one makes $2950 per month and the other $1990. They have a $1000 mortgage and a monthly car payment of $420. To calculate a possible loan amount, do the following:
- Step 1 – Calculate total monthly payments: $1000 + $420 = $1420
- Step 2 – Calculation of total income (both salaries): $2950 + $1990 = $4940
- Step 3 – Calculation of the debt ratio: 1420/4940 x 100 = 28%
As their debt ratio is less than 33%, this couple should have no trouble convincing a financial institution to give them a personal loan. However, it is up to the borrower to be reasonable because a loan must be repaid back. Ask yourself if you really need to make this investment and try to minimize the borrowed capital to avoid financial difficulties in the event of a loss of employment, disability, the death of a spouse, etc.). Make sure you have the necessary repayment capabilities before signing any agreement.