Costa Rica has a wide variety of banks, However doing traditional loans with banks offer much higher rates and with appalling timing, it can take up to months to complete traditional bank loans & that’s even if you get approved by them.
Anywhere in the world, there are several ways of borrowing money in the loan business we have types such as “Secured & Unsecured” loans. A secured loan is an equity loan or a mortgage loan, collateral and liens are essential to these types of loans where other “Unsecured” loans are less dependent on the security an unsecured loan is a monetary loan. When the borrower’s assets/benefits aren’t at risk. Unsecured loans are most commonly used for: peer-to-peer lending, credit facilities or lines of credit, bank overdrafts, personal loans, credit card debt as well all of the above and then some…However, companies like GapInvestors have your best interest in mind for both lenders & borrowers!
Choosing The Right Path
Of course, we want you to choose the right path but being able to spot the wrong path is also a very vital skill to possess, leaving more room for you to keep borrowing money safely here in Costa Rica. So here are a few things to be aware of, when borrowing money in Costa Rica
(Don’t worry we’re not leaving you empty-handed!)
1. Predatory lending happens most often in “UNSECURED” Loans.
2. What is “Predatory Lending”?: It’s when granting a loan and the borrowers are put into a precarious financial position.
3. Usury is a very common for both secured and unsecured loans, Yet most commonly found when dealing with loan sharks. Some credit card companies in a few countries have been accused of using this method. Keep this in mind when doing a loan of any sort, make sure you are not personally being taken advantage of!
4. What Is “Usury”?: When the lender is charging immensely high-interest rates
5. Hidden Fee’s: Some companies and or lenders add in additional hidden fees in the contract.
6. What are hidden fees?: It is when legal fee’s become outrageous due to overzealous lawyers.
7. Over securitization of a loan: happens often which is contrary to the benefit of the borrower. Eg. A 10% LTV loan should be enough and should not require tying up other assets.
8. What’s Over securitization on a loan?: when overzealous lawyers want to put a lien on more properties than needed for the amount.
In Conclusion “Is it safe to borrow money in Costa Rica?” Absolutely, however, be cautious stay vigilant for red flags use these tips as a rail guard! Dealing with reputable companies in Costa Rica is essential for a fair loan look for the right company with the right credentials and you should be fine!