In the last days the board of directors of the Banco de la República voted to bring its interest rate down to 12.75 percentdecision that influences the cost of credit.
In addition, the interest certificate by the market authority was 45.27 percent effective per year, the highest registered so far this century and which mainly affects those who plan to take a loan.
(Also read: Usury rate reaches the highest peak of this century, 45.27%).
Thus, taking on debt today, whether with credit cards or consumer loans, is almost twice as expensive as a year ago. And those who do will have to prepare to pay, on average, 14.5 percentage points more than last year.
To this is added that three in 10 people indicated that their household income has decreased by four percentage points further than in the third quarter of 2022, as revealed by the most recent ‘Consumer Pulse’, prepared by the TransUnion risk center.
(You can read: Annual inflation in Colombia does not let up and reached 13.25% in January).
Expert advice
In the aforementioned context, personal finance experts recommend not taking on new debt this year unless it is strictly necessary, due to high interest rates and the economy will slow down and this can hit employment.
If you must go for a loan, take into account the level of indebtedness you have, as well as your available income. There are three alternatives that you can analyze in detail: prepay the debts that you have, refinance them or sell them to another entity that offers better rates, terms and payment conditions.
(It may interest you: If they meet these requirements, Colombians may be exempt from the 4×1000).
According to Héctor Juliao, Managing Director of Corporate Banking at Credicorp Capital, another key to the current scenario pay off debts so that you do not have to have money on a monthly basis that can be used to meet other obligations.
In addition, Juliao recommends reviewing the conditions of the credits, mainly the rates at which they were agreed, since this is a key factor to know which ones are tied to higher rates, whether they are fixed or variable rates.
If the alternative is to refinance an existing loan, review the new conditions in detail to achieve benefits in terms of the cost of credit (rate), but If you decide to sell the portfolio to another entity, it is also necessary that it be under conditions of interest rates and terms that allow you to obtain a breather in your monthly finances.
