They say that not everything that glitters is gold, and nowadays it’s common to find advertisements offering loans that you can get in a “simple way”. The amounts range from 50,000 colones to millions.
Neither co-signers or rigorous requirements are required. The picture is great, but you might be about to make the worst financial mistake of your life.
In Costa Rica there are two sources of funding: banks and financial institutions regulated by the Superintendent of Financial Institutions (SUGEF), and what is known as the “hard money”.
People do not have access to credit in the national financial system are the ones who go to this source of funding, without realizing that they are about to borrow loans with exorbitant interest rates.
There are people who are highly indebted or that are in SUGEF’s black list, so they go to this type of financing. But rates are much higher, because interest rates can exceed 40% in terms of colones, and dollar levels range between 22% or 24%. These rates may even double the average rates in the country,”
said José Prado of EAE Business School of Costa Rica Institute of Technology.
The specialist said that this money is easily accessible and they usually do not ask for many requirements, but “it’s a big financial mistake” because dealing with a very high interest rate could affect your pocket.
Those who go to “hard money” often pay dearly for the credit they receive, to the point that they pay more than double what they would have paid a formal financial institution for loans, often in the midst of despair and anguish.
Prado said that in Costa Rica the lending rate is usually around 12 or 10% of the passive rate is around 5 to 6%.