What is the best loan for my needs?
You are in need of a extra credit to pay off debts or to invest in an important purchase? In cases like this, many people turn to credit companies, but how do you know which loan is best for each person?
There are several types of loans available on the market and it is important to know each one of them in order to make an assertive and advantageous choice for your case. With this in mind, we have gathered below some important information about types of loans and how to choose them. Keep reading and check it out!
Best loan: each type matches a profile
There is no universal truth when it comes to the best loan. The most appropriate choice depends largely on each consumer's profile, taking into account the term in which they wish to repay, the loan amount, the current financial situation, etc. See below some of the existing options.
Consigned: best loan for pensioners, retirees and civil servants
Payroll loans are one of the loan options with the lowest interest rates. This is because they are a low-risk transaction for banks and financial institutions, since the debt is paid directly from your paycheck. This means that when your salary, pension or retirement is deposited into your account, the part intended for the loan payment is automatically debited, even before you have access to the money.
Due to the high probability that the lender will recover the amount borrowed, the interest rates applied are lower. If you have a formal job, this is also a good option for you. The only thing that a person should be careful about before choosing this option is to check whether the money from the loan will really be needed in the monthly budget.
Personal loan: one of the simplest forms
A personal loan, as the name suggests, is made directly between the financial institution and the customer. The payment terms and interest rates are set by the lending company itself and it is up to the customer to accept the proposal or not.
Typically, the interested consumer makes a simulation indicating the amount they need to borrow and providing their personal details. From this, the creditor can analyze the customer's profile, consulting their points score, for example, to then decide whether or not to provide the credit.
If you are a good customer at a bank, for example, you may already have pre-approved credit for a loan. In this case, it is easier to negotiate the repayment term, for example. However, the rates for personal loans are usually higher than for payroll loans.
Refinancing: cheapest option
Refinancing requires the customer to have an asset that has already been paid off, such as a vehicle or property. Therefore, when requesting credit, the customer leaves this asset as collateral in case they are unable to pay the installments.
Since the lending company has a guarantee in case of default, the interest for this type of loan is lower. Just make sure you have good financial organization so you don't lose your house or car, okay?
Special check
Yes, an overdraft is a type of loan, even though people may not realize it yet. It consists of an amount pre-approved by your bank, which is available for withdrawal or payment of bills. The more you use your overdraft and the higher the amount, the more interest you will pay.
In general, this is not the best option. In fact, it has the highest rates on the market, reaching more than 14% per month or 400% per year. The only situation in which it is viable to use an overdraft is in extreme urgency, otherwise, other lines of credit have better conditions.
How to access different types of loans in one place?
As you can see, there are several loan options available on the market. The good news is that you can check them all at once, without having to go door to door and fill out thousands of forms.
At Bom Pra Crédito, for example, the consultation is done from home, using the internet. In a single search, the fintech consults more than 30 partner financial institutions. The entire consultation is secure and bureaucracy-free. This way, you can compare the options to choose the best loan for your case.
Was this article helpful to you? Then you might also like to read about How to get a loan with a bad credit rating. Check it out!
