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Everything you need to know to get a loan

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A very common situation among millions of Brazilians is the bad habit of spending more than you earn. So you don’t get on the list of the more than 62 million citizens whose name is dirty due to unpaid debts, nothing better than extra money to pay the bills, right?!

But are you aware of what you need to know to get a loan? Check out the article below for simple tips that can help you better organize and plan your everyday accounts. Come on?

What is a loan?

The word loan is widely known by Brazilians. It’s when someone turns to a financial institution to get extra money in exchange for installment payments at certain interest rates.

It is a very common practice that helps the economy to function. The loans are also geared towards investments in business, settlement of goods, purchases in general or even to be used in a moment of leisure.

The loan has a contract that establishes interest rates and some criteria for releasing the money. Among them, the person’s need to be up to date with financial obligations.

Despite this, many institutions allow the so-called payroll loan even if the person’s name is dirty. In this case, the payment of installments is deducted directly from the applicant’s salary, valid for those who are public servants or retired.

 

Difference between loan and financing

With so many choices of products offered by financial institutions, people are often unsure whether loan and financing are the same thing. But actually they are not.

The loan is the release of a credit for the client to choose how to spend the money, while the financing has a previously defined objective, such as the purchase of a car or a house.

As financing amounts are generally higher, institutions ask for some guarantee that payment will be made within the stipulated period. Hence, interest rates are lower.

Thus, the bureaucracy for releasing a loan is much greater compared to a loan, which often requires only proof of income. Thus, the modality is much more practical and with great daily movement in the economy.

 

Costs of a loan

Loans have variable costs that are set according to the amount requested and also based on the interest rate set by the financial institution.

In addition, interest increases based on how long it takes the customer to pay off the requested credit. Deadlines can reach 60 months, but generally plans do simulations up to 48x.

In the procedure, people also sign contracts that establish fines in case of delays, and even the loss of an asset that has been used as payment guarantee.

 

What do I need to know before taking out a loan?

One situation will be unanimous for all citizens who take out a loan: they will pay more than the amount withdrawn. So you don’t have any problems, check out some useful tips for you to carry out financial planning before signing the contract:

map your expenses

Those who are going to apply for a loan need to pay attention to their finances so as not to go into further debt. A good tip is to analyze all the bills, noting that the payment of installments will not compromise more than 30% of the income.

Thus, you will have the breath to honor the commitment without the need to pay fines.

have a goal

A few questions should be asked when considering taking out a loan. They are fundamental to establishing the real need for the extra money and whether you are really acting with conscience.

After all, many people apply for a loan just to buy unnecessary items, making the bills even heavier. Among them, we can mention:

  • What will I use the money for?
  • Do I have monthly breath to honor the installments?
  • How will this money help me? Will I lower my spending costs? Is the interest worth it?
  • Does my family agree?

 

Search

Searching is essential in finding the best personal loan. This is because each institution has different interest rates . Look for one that has credibility in the market and that honors its commitments, avoiding future headaches.

In addition, when searching, you will find the best conditions to handle the installments, helping you to organize your finances.

plan payment

Unforeseen events happen, unfortunately. In some cases of job loss, for example, some people may not be able to repay the loan. Therefore, it is necessary to plan your life before signing a contract.

See if you have stability, if there are opportunities to raise extra money, and how likely you will be financially two years from now. After all, many loans last for 48 months and require proper planning.

Read the contract carefully

Another important tip is to carefully read all the details of the contract to avoid future problems. By knowing exactly what you are signing, it is possible to ensure compliance with the rights and duties between institution and client.

In addition, knowing the loan agreement avoids possible mishaps or even complaints that could be remedied when analyzing the document.

How to apply for a loan?

Applying for a loan is quite simple: you just have to go to an accredited institution or access the website of a company that runs the simulations. This way, you can measure how much you need and what the value of the installments will be, with their respective interest rates.

Necessary documents

Often, the documents needed to obtain a loan are:

  • CPF
  • ID
  • Proof of residence
  • Proof of income (Extract of your salary or INSS benefit)

In the analysis of the Individual Taxpayer Registration (CPF), the institution will analyze whether the applicant’s name is up to date and without debts.

 

What are the best loans?

With several loan options, you may wonder: Which is the best among them? In general, the choice will depend on your need and availability of money, but certainly the personal loan is one of the most sought after, precisely because of the numerous advantages that exist.

Among them, we can mention the practicality, release within 24 hours of the money, all done quickly after the credit analysis.

for individuals

Generally, borrowers aim to pay off debt through lower interest rates compared to credit card or overdraft facilities.

Options are more limited and interest rates are higher compared to existing plans for companies.

Legal entities

There is a wide range of business-oriented loans. In these cases, the vast majority of those who apply for a loan seek to expand the business.

There are lines of credit for rural producers, technology companies, individual micro-entrepreneurs (MEI), among others. As a large part is aimed at investments, interest rates are lower.

After learning about what you need to know to get a loan, there is nothing better than knowing financial applications to invest your money well.

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