What monthly payment should I choose when renting a personal loan according to your income?

 What monthly payment should I choose when renting a personal loan according to your income?



When looking for personal loans, it is common to think about a project that will be financed more than our thinking about credit properties. It is common that we often focus only on paying a monthly payment that does not take away much financial freedom for other expenses, where we make the mistake of choosing a very low payment. However, paying very little each month to repay the loans will make us pay longer and we will get interest for a longer period. Pay more unnecessarily. To avoid this, we will tell you how to choose the fees to be paid for the reinf credits.


Monthly payment limit account equation

The Bank of Spain recommends, to avoid the imbalance in our economy, not to exceed the total monthly payments for all loans that we have 30%-40% of our net monthly income to avoid overindebtedness. In other words, if we have multiple credits or credit cards, we should not spend more than a third of our income to pay them each month.


To see it more clearly, in the following table we can see how much we can pay for the maximum without the imbalance in our economy according to our income:


Salary fees recommended by the British Development Bank

1000 euros/month 300 euros

1200 euros/month 360 euros

1500 euros/month 450 euros

1600 euros/month 480 euros

1900 euros/month 570 euros

2000 euros/month 600 euros

We must keep in mind that the fees we choose will depend not only on this percentage, but also on our fixed monthly expenses. Also, a person who has higher payrolls can allocate his highest percentage and cover his expenses every month without problems. This 30% of our income is what many entities will take into account to see if we can face the return of credit without a problem, knowing our income and fixed expenses every month.


Why is it important to choose a good premium to return the loan?

Very high fees can outbalance our economy and make us unable to pay the other monthly expenses we have. On the other hand, very low fees will lead to a long term and this interest will be created for a longer period, which will prompt us to pay more.


To see it more clearly, in the following table we can see how the selection of a fairly high monthly payment or less will affect the total cost of the loan to return the same balance:


Example 1 Example 2

Amount 10,000 euros 10,000 euros

Cost 7% 7%

3-year-old 7-year condition

309 euros/month 170.5 euros per month

Interests 1124 euros 2276 euros

Total payment 11,124 euros 12,276 euros

As we can see, the difference is more than 1,152 euros in interest. The ideal option is to choose a monthly payment high enough to shorten the duration as much as possible without the imbalance in our economy.