Types of loan: which one is best for you?

Have you ever asked yourself this question? In our eagerness to secure a loan and get out of trouble, we often overlook the specifics of each type.

But it's crucial to understand the types of credit available on the market. Each has its own dynamics, conditions, and rates.

To help you make a smarter and more advantageous financial decision, we've outlined the five main types of loans.

Personal Loan

This is one of the most common types on the market. Also known as personal credit, this type of loan has widely varying rules, rates, and interest rates. 

Personal loans can be unsecured or secured, especially by a vehicle or property. To access the loan, the consumer must run a simulation with the term, interest rates, and final value of the contract. 

Institutions typically request a CPF (Brazilian Individual Taxpayer Registry) and proof of income for assessment purposes. After review, they decide whether to release the requested amount.

Payroll Loan

A payroll loan is a type of loan that involves deducting the installment amount from payroll. This type of credit is offered to INSS beneficiaries, public servants, and employees of private companies that are accredited with credit companies.

Therefore, the interest rates charged are among the lowest on the market. However, there are specific limits and conditions for contracting it, such as respecting the assignable margin and authorization for payroll deductions. 

Financing

The most common reasons are to buy a property or a car, for example.

The amount of this type of loan depends on the price of the asset being purchased. Interest rates are similar to those of personal loans. However, there are specific sources, such as mortgage financing. In this case, since the source of funds may be savings accounts or FGTS (Unemployment Fund for Retirement Funds), the interest rate may be lower. 

Revolving Credit

The revolving loan is familiar to those who use credit cards frequently. In practice, it functions as a form of invoice financing and is automatically contracted when the customer fails to make full payment.

This means the bank covers the outstanding balance, but the loan incurs high interest in the following months. In some cases, the interest is nearly 350% per year. 

While this will prevent your name from being immediately registered with credit protection agencies, it's important to be vigilant. Otherwise, you could lose control of your debt and harm your personal finances. 

Special check

An overdraft is also a line of credit and a form of loan. It works like a pre-approved loan linked to your bank account. 

It's important to be careful, as the interest rates on this line of credit are extremely high. Be very careful not to get into excessive debt due to activating the overdraft. 

So, did you already know about all these types of loans? 

Understand the characteristics of each before signing a contract, especially since interest rates vary widely, which can hinder your financial success.

We help you make the best decisions. Find the best loan for you by clicking below:

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