There are those who run out of loans, paying everything in cash. Others, on the other hand, live on credit and accumulate debts in various options.
Neither extreme nor the other: for sound financial management, you need to rely on loans at the right time, choosing the option that offers the best repayment terms to help fulfill dreams like buying a house, starting a business or a new vocational training.
How to know which loan is the best?
When you need credit, you should look at some points to understand if that option is right for you. These include the amount of the installments, the payment term, the maximum amount to be released and, especially, the interest rates charged.
It is the interest that defines whether a debt is expensive or cheap, that is, its potential to multiply over time. Lower interest rate credit options are ideal so as not to hurt your financial organization.
The Loan Villains
Among the credit options available in the market, there are some of which you should flee as they only hurt your finances. Know what are the villains of credit!
Credit Card Revolving
He is undoubtedly the biggest villain for Brazilian finances! If you use your credit card revolving every time you opt for the minimum bill payment, you need to be careful not to become a snowball. The problem is that interest rates are the highest among the types of credit available on the market, exceeding 400% per year.
Another big villain among credit options is the overdraft, pre-approved amount used every time your account goes negative. Interest rates are around 13% per month. That is, even if you use credit for a few days, it will have a significant impact on your finances.
Your bank has certainly offered you a pre-approved personal loan, right? So don’t be tempted to accept it without first analyzing the conditions very well!
This type of credit is often among the worst you can count on when you need money. In any case, it is always possible to negotiate the reduction of values with the financial institution.
Credit for negative
This has been a popular credit option for the unemployed or retired, as there is no restriction on those who have a dirty name or have difficulty proving income.
Interest rates, however, are quite high due to the high default rate. And the possibility of your debt multiplying is very big in this case!
What are the best options for those who need credit?
Don’t worry, if you need a loan to make a dream come true or even to get rid of the most expensive debts, there are good options you can count on.
Without doubt, this is the best credit option available on the market today. If you own a car or property in your name, you can contract this mode in which your property serves as collateral for the loan.
Due to this collateral the monthly interest rates for Home Secured Credit are around 1.14% per month plus IGPM, and auto refinancing at 1.95% per month.
Real estate or car financing
For those who buy a good, different financing is usually the best option. The higher the value of the entry, the better the payment terms. Also remember to consult different banks and modalities as there are important differences between them.