What are soft credits?

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Have you heard of soft credits? Yes, they do exist and are intended to support you.

What exactly are they?

What exactly are they?

This term refers to the credits in which the lender offers the borrower optimal conditions to access a loan, which are not normally offered in the market. Mainly we are talking about the following:

  • Low interest: as you read it. These types of loans offer you a very low interest rate compared to the offers of the usual banking institutions. The average percentage of 10%, although it may vary.
  • Extensive return terms: this means smaller payments and more time to return it.

In general, these two characteristics are present, but there are other types of advantages that vary according to the purpose of the loan.

Surely you ask yourself:

Who and why gives such good credits?

Who and why gives such good credits?

There is a very important factor in this type of credit and it is that they are not granted by private institutions but by public institutions, that is, financed by the government. This type of credit seeks a social benefit instead of a return.

Surely you remember what happened with the earthquake in September that affected the lives of many people and now they don’t have a roof on where to live. Because of this, the Ministry of Finance and the Ministry of Finance and Public Credit have addressed the issue and will offer soft loans for people who require it.

Another case is the Fund. Program in charge of the Ministry of Economy and consists of granting credits, training, advice and more services to owners of micro, small and medium enterprises with the objective of generating more jobs. Or loans for people over 68 years.

Eye: that they are friendly credits does not mean that they are available to everyone. It is enough to tell you that the victims who access a soft loan of 2 million dollar will have to pay a monthly payment of 16 thousand dollar.

In summary:

  • A soft credit is one that offers optimal conditions to the borrower, mainly: a low interest rate, but a long repayment term.
  • Its main objective is improvements at social level and not economic benefits
  • They are granted by public institutions and sometimes work in teams with banking institutions.
  • It is a good option if you are an entrepreneur and want to grow your business because you already have an idea of ​​the behavior of your business.
  • We must bear in mind that since it is a credit, you will begin to report your behavior to the Credit Information Companies and any breach will affect your credit history.

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