Uruguay’s Ministry of Economy and Finance, through its Consumer Protection Unit, has published advice for World Savings Day encouraging consumers to plan savings and assess affordability before taking out consumer credit. The advice recommends organizing household budgets around income and expenses, then setting savings goals, including for planned purchases and unexpected costs that might otherwise require borrowing. Consumer borrowing should be based on a realistic capacity to meet future repayments without becoming insolvent or overindebted. The time needed to save an equivalent amount can help consumers assess whether a proposed repayment schedule fits their finances. For example, a household that would need five years to save the required amount should question whether it could repay that sum within 24 months. Consumers should compare the full cost of borrowing, including interest, insurance and administrative expenses, rather than select the easiest loan to obtain. Loans with fewer eligibility requirements carry less favorable borrowing and late payment interest rates because lenders face greater repayment risk. The advice also reminds consumers that credit card spending is a form of consumer borrowing.
Uruguay’s Ministry of Economy and Finance urges consumers to assess repayment capacity and compare credit costs
Uruguay’s Ministry of Economy and Finance has issued consumer advice linking savings plans and borrowing decisions to household budgets and realistic repayment capacity. Consumers should compare interest, insurance and administrative costs rather than choose the easiest credit to obtain. Loans with fewer eligibility requirements carry less favorable borrowing and late payment interest rates because of greater repayment risk.