A loan consists of a contract that is entered into between a financial institution and a client, where one of them agrees to lend an amount and the other agrees to pay for that amount in installments plus interest, month by month.
The easiest way to get a loan is through personal loan. This is the mode of credit with less restrictions and, therefore, is usually the most sought by customers. But other than personal loan, there are other forms of credit. Know how each one works.
Types of loan
- Personal loan:
Personal loan is a form of credit without so many conditions for your hiring. In general, to get this loan, you need to be over 18 years old, have an active CPF and go through a credit analysis. If your ability to pay for the amount you want to lend is proven, the money is credited to your account.
This is not the cheapest way to get a loan precisely because it does not have so many restrictions, however, it is still the best option than entering the special check or credit card, where interest rates are even higher.
- Payroll loan
The payroll loan is a modality available only public employees, retirees or pensioners of the INSS and some employees of private enterprise. This is because the form of payment of the payroll loan is done differently. Here, the value of the installments is deducted from the salary or benefit of the contractor – even before the money falls into your account. The advantage of paycheck-deductible loans is that the chances of default are lower and, as a result, the interest rate is usually lower than in other types of credit.
Refinancing is a form of loan in which the contractor leaves a property or vehicle, removed and on his behalf, as collateral for the payment of the loan. Thus, the financial institution has a guarantee that you will not delay or fail to pay the installments of credit, after all, in case you fail to pay, the bank can take your asset. By having a guarantee for the payment of credit, institutions usually charge more attractive interest rates.
- Loan for legal entity
This type of loan is exclusive to legal entities, so it has special conditions to help entrepreneurs in opening companies or branches, buying machinery and equipment, among other things.
How is the loan interest rate calculated?
The interest rate of the loan is calculated taking into account several factors, including the costs for the maintenance of the service and also the credit risk, which is nothing more than the chance that the client will not be able to pay for the loan he took and default on the bank, leaving it at a loss. This rate can vary from one financial institution to the other, so it is not uncommon to find banks and financiers charging different rates for the same amount of personal loan, with the same repayment term.
Unlike the loans contracted at bank branches or financial stores, in the online loan, the costs for service maintenance tend to be lower, since the institution does not have to pay the expenses to maintain a store and offers credit through a automated system. This may directly reflect the interest rate charged by the online personal loan, making it cheaper.
Difference between CET and interest rate
Another thing we should consider is that the interest rate reported by institutions, whether online or physical, is not the only rate that you, the customer, will have to pay. There are other charges involved in a credit operation, such as the IOF (Tax on Financial Transactions), for example. To know how much you will actually pay, you need to consult the CET (Total Effective Cost), where all these charges are collected, including the interest rate.
The interest rate is only an isolated amount, defined by the bank and charged at the time of the personal loan. But beyond this rate, other amounts are charged per month, and it is the union of all those charges that we call Total Effective Cost. Therefore, the CET is nothing more than the difference between what the customer lent and what he will pay, making clear to him how much he was charged for.
As we already know, the rates and charges on a loan defines how much the customer will pay for it in the end. With this, the higher the rate, the more expensive the loan will cost. Here at Samuel Pickwick, for example, you can find interest rates starting at 3.99% per month.
To know how much you will pay at the end, simply fill in the fields of our online personal loan simulator below and click on ‘calculate’. This is a free tool and you can use it anytime!