One of the most frequent doubts about financing projects with crowdlending is how to make a budget that fits your needs correctly. When you are going to ask for a loan, you may have doubts about what you should take into account to calculate the total amount, since without that calculation you could end up requesting more or even less money.
Need financing to cover the entire project
The most important thing when making a budget is to be clear if you are going to need financing to cover the entire project or if you only need to cover a part of it. Think of each detail separately and always have a small mattress that helps you cover unforeseen events ; Keep in mind that your project will also have associated expenses, such as the registration tax in the case of a car or building permits if you are going to start a home renovation.
When you have defined what the global budget should be, reflect on whether this amount is viable. If you see that it exceeds your possibilities, think about how you could adjust the individual items to reduce this budget a bit.
Setting a good budget is to be realistic and set limits
The key to setting a good budget is to be realistic and set limits . Investors will also study whether your request is consistent, that is, if the budget you have indicated corresponds to both the scope of your project and the established repayment term. Therefore, be honest and transparent ; It is not convenient for you to inflate the budget if you do not need it.
What options do I have if my budget has changed?
The first thing you should know is that the budget of your crowdlending loan cannot be modified once it has been accepted and granted. That is why it is so important that you make a calculation as accurate as possible from the beginning.
The financing of crowdlending projects is carried out under some premises that are established from the beginning and that remain unchanged until the end of the process. And this includes the amount of the loan, the interest rate applied, the monthly installment and the repayment term. In P2P loans – from person to person – investors are private like you, so they are also affected by any modification you want to make.
You will have heard that in the financial world we usually talk about ‘debt refinancing’. This consists in requesting a decrease in the monthly fee, which transforms into a higher repayment time. In Good Finance we do not contemplate this possibility because it goes against the conditions agreed with the investors who have trusted your project.
The processing of a crowdlending loan consists of three phases:
- The presentation and acceptance of your request.
- The publication of your project.
- The investment of individuals in your project.
If after the resolution of the entire process you realize that the budget you have requested is not correct, you can proceed in different ways.
One of the options we suggest is to make early repayment , especially if you are going to need less money than you thought.
On the other hand, if you see that you have fallen short of budget , consider two things: either make that early repayment and return the money , or directly cancel the loan – provided it is within a period of 14 calendar days from its acceptance. Both options allow you to make a new application afterwards with a better budget. In Good Finance you can only enjoy one loan at a time , so the most practical solution is to liquidate the one that no longer suits you and start again with the process.
Loan to carry out a personal project
Before embarking on a loan to carry out a personal project it is very important that you be clear about your true need for financing . A well-broken budget will make the payment of your fees much easier and easier. So you just have to focus on your project!