Unfortunately, there is no magic formula. However, I believe that the most important thing is to define which financing option offers the greatest autonomy, the least obligations and the lowest possible price.
How to calculate the cost of financing?
Calculating the cost of financing is certainly not easy, so I'll explain two ways you can compare. First, I have to standardize the different financing offers that they provide me. Evaluate all the financing costs , that is, the commissions and interest that the different credit offers have.
Globally, the most common model is to use the estonia phone data annualized percentage rate or APR . In Mexico, the Bank of Mexico uses the Total Annual Cost or CAT, which is essentially an Internal Rate of Return (IRR) , to compare different financial products .
Differences between APR and CAT
The APR is the annualized interest rate plus all fees associated with acquiring the loan . Fees can be easily added by subtracting the sum of all these fees from the amount of credit received.
The APR includes all the elements of the APR, plus the impact that progressive access to the credit funds may have. That is, if the financing is not granted in one drawdown and if it is not granted progressively over a period of time, this impacts the APR.
Essentially, the APR tells you how much you will pay in pesos and cents for the resources that will be offered to you. While the APR will show the cost of financing based on the cash flows actually obtained. It is important to calculate both rates, as this can shed light on different important concepts of the different credit offers.