If you are in need of money and are considering taking out a loan, you should be wondering what types of loans are available in the market. Thus, we have included in this text the main options for those who want to make a loan. Understand the types of loans that exist before choosing the best one for you.
Why make a loan?
There may be several reasons why you may wish to make a loan. People borrow money to open a business, buy a car, take a trip, or even pay off some one-off debts. Some people are afraid to borrow, afraid they will not be able to pay and get lost amidst the spiral of interest, not knowing how to get out of debt.
It is not enough: just have planning and organization to pay the installments. In any case, it is always important to pay attention to the interest rates associated with the loan, and to do the accounts properly. Here are the types of loans you can borrow.
This is the most common type of loan. Any individual can apply for a personal loan, as long as it is not dirty. To apply for a personal loan, you should go to a bank or financial institution. The bank will perform a credit analysis. If you are approved, you will receive the money. The process is fast, so you’ll soon have the cash in hand.
On the other hand, interest rates can be high, higher than other types of loans.
In payroll-deductible loans, the monthly installments are deducted directly from payroll or retirement. Because of this, this transaction is also known as a payday loan.
This brings advantages and disadvantages. Since the installments are deducted directly from your monthly payment, you can not forget to pay them. On the other hand, there is also no way to stop paying a portion if you find it necessary.
However, an undeniable advantage is the possibility of obtaining lower interest rates due to the bank’s assurance that the installments will be paid every month. this is because they will be deducted from your salary or retirement. To get a payroll loan, you first have to have a job in a company that has an agreement with the bank. Or be retired by the National Institute of Social Security (INSS).
Also note the fact that the monthly installment of the loan can not exceed 30% of your income.
Loan with guarantee
In this type of loan, the person offers a good to the bank as collateral for the repayment of the debt. If the person delays payment of the loan a lot, there is a possibility that this asset – usually a real estate or a vehicle – will be taken by the bank to pay off the debt.
Despite this, this type of loan has the advantage of providing the lowest interest rates. This is precisely because there is a good offered as collateral, so the risk to the bank is lower. Deadlines for payment also tend to be higher. Especially in case of loan with property guarantee, the term can reach 20 years.
And, also because of the guarantee offered, this loan can be done even when one has the dirty name.
Personal credit over the internet
A very recent type of loan is personal credit over the internet. It is very much like personal loan. The difference is offered by companies that only operate through the worldwide computer network. The procedure is entirely done through the network, without the need to appear in person to a bank branch.
Another advantage is that the interest rates are a little lower than those of the personal loan. This is due to the fact that, operating over the internet, these companies do not have to pay the rent and maintenance costs of physical agencies.
However, there is one disadvantage: these companies can be more demanding when doing the credit analysis to grant the loan.
One well-known method for borrowing money is the attachment of assets. In this transaction, the person offers a good as collateral. If she does not repay the loan, she may lose the good.
The most common is the attachment of jewelry, but in principle any good can be pawned. The Federal Savings Bank has a lien system that has little bureaucracy and competitive interest rates.
Palducred evaluates the good offered and offers the cash credit, practically on time. You do not have to go through a credit analysis, since the asset offered works as collateral, and is usually valued below the value.
The advantage is that, because it does not require credit analysis, anyone can pawn a good, even if it has the dirty name.
The main disadvantage, besides the possibility of loss of good, is the high interest rates.
Other types of loans
The overdraft is very common in various bank accounts. When the account is below zero, this credit device is triggered automatically, crediting the account exactly the amount needed to clear it. Until such amount is paid, it shall be subject to the application of compound interest.
The loan through a special check is easy to contract: just keep the checking account in the negative. The advantage is that you do not have to talk to anyone or ask for anything.
However, there is a major disadvantage. Interest associated with overdraft debt is very high (over 300% per year), so this option is only recommended if there is no other recourse. Similarly, loans through credit cards also have great practicality.
However, the ideal is not to fall into the rotary credit of the card, whose interest is even higher than the overdraft: more than 400% per year.
There is a recent measure taken by the National Monetary Council (CMN) that restricts the card’s deadline to 30 days, forcing the client to finance the rest of the debt. However, it is best not to resort to this type of credit. And, for that, it is necessary to pay in full the monthly invoices of the credit card.
Among so many types of loans, which one to choose?
You should thoroughly analyze the characteristics of all types of loan at your disposal, and check the best for you. If you do not have the dirty name and own a job or retirement, it is best to opt for the payroll loan.
If you have a property, you can offer it as collateral and get long terms and even lower interest rates. If you have a dirty name and do not own a property to offer as collateral, you can try to pawn another asset. The most important thing is to avoid lenders at all costs, which charge rates of more than 700% per year. You can move from one bad situation to another even worse!