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Loan or financing: which is the best option for you?

Are you in doubt about which is better: loan or financing? Do not worry! In this text, you will know the purpose of these two types of credit and when to use one of them. Check out!

Loan or financing? Who's never asked that question, right? When buying a car , a house or resolving an emergency situation, it is common to have this doubt and, in this post, you will find out which is the best option!

The truth is that not everyone can achieve these goals with their own resources. The good news is that this does not prevent the dream from being realized, as there are good alternatives to collect the necessary amount .

Still, we need to remember that this decision is important and can compromise your financial life. Therefore, it is necessary to carefully evaluate both options and make a conscious choice.

To help you with this mission, we have prepared this content full of tips and valuable information on the topic. Continue reading and answer all your questions!

Understanding more about the loan
Have you thought about borrowing ? This is the choice of many Brazilians who need extra money to resolve emergencies, but do you know exactly how this type of personal credit works?

First of all, it is important to know that the loan is a way of obtaining money that does not impose any restrictions on its use . That is, you do not need to explain or demonstrate how you will use the acquired value.

When looking for a financial institution and signing this contract, your only responsibility is to pay the installments on time. About money: you use it however you want!

Now see some more details about this type of credit that can help you make a safer and more advantageous decision!

How does the loan work?
In a simple and summarized way, the loan is nothing more than an agreement made between a bank and its client . In that case, the financial institution lends an amount and the person undertakes to return it in the future.

Naturally, interest is charged and the amount of the installment is usually defined at the time of contracting the credit.

The definition of how much will be released depends on an analysis carried out by the bank . Depending on your financial conditions and your relationship with the market, you may be able to get more or less money.

As we said, the amount borrowed does not have a specific purpose. It is deposited in the customer's account, who can use it any way they want - remembering that it takes a lot of planning.

What types of loans are there?
Did you know that lending is not all the same? That's right! There are several modalities that can be contracted, and every consumer must know them.

It is interesting to note that several situations contribute to someone needing a loan . Covering contingencies and emergencies and even a layoff can destabilize finances and require extra money.

With so many types of loans at your disposal, it is normal to be confused. So how about learning a little more about them? Check out!

Personal loan
The personal loan is the most common mode in the market. If you have no restrictions on your name, you can choose the bank of your choice and hire it without major difficulties.

As the name suggests, it is granted to individuals. In addition, the money is deposited in your account within 24 hours , which makes this option a great ally in times of emergency.

Secured loan
In this modality, it is possible to use a property (car or house) that is in your name as a guarantee. With that, the amount of credit offered can be much higher, depending on the value of your asset, and the rates are more attractive.

Payroll loan
The payroll loan is widely used by retirees, pensioners and civil servants . In this case, the bank lends an amount and the installments are paid by means of a direct discount on the client's payroll.

Because it is safer for borrowers, interest rates can be cheaper and the release of money simpler and easier. But it is important to say that there is a hiring limit.

What are the existing fees?
If the bank is lending the amount you need, it is natural that it will be remunerated for it. Therefore, taking out a loan provides for the charging of an interest rate.

This is a factor that cannot be ignored, as each financial institution works in a different way and charges different interests . Hence the importance of researching and comparing the total effective cost of the operation.

Watch! The higher the interest rate on the loan , the more expensive the contract becomes. Likewise, the longer the payment term, the more interest you pay!

This is a very simple math, but you need to check how much you will pay in full at the end of the agreed term. After all, there are other bank fees and costs that can also be embedded in the installments.

It is worth noting that the loan has a higher interest rate than the financing . This is due to the higher risk of default and also the flexibility granted to the consumer.

As there is no need to explain the destination of the money, there is greater uncertainty that the payment will be properly made. In that case, the bank needs to protect itself in some way, right?

What are the payment terms?
How soon should I pay a loan? The answer is: it depends! The number of installments for payment varies depending on the banking institution you choose and the type of loan taken out.

In general, we can say that the terms are flexible and can help you plan better, avoiding default and the high commitment of your monthly income. However, you have to be very careful with interest.

Think about it: if you take out a loan with an interest rate of 3% per month, the amount of installments chosen directly interferes with the final amount paid. The more time you have to pay, the more expensive the loan becomes .

What happens if I don't pay on time?
Unforeseen events happen, and something can go wrong and prevent you from paying the loan installments. What consequences can this bring?

Failure to comply with your part of the contract generates an extra expense for your pocket. After all, interest and penalties will be charged for time delay .

Another impact is the registration of your name in credit protection agencies, which is bad for the consumer - this information is consulted whenever he intends to make a purchase in installments or requests a credit card, for example.

When the consumer is negative , the market interprets that it is necessary to be more careful before granting credit to him.

In case you don't know, we all have a credit score. When we honor our commitments, the score grows. However, the opposite happens when we are unable to pay some debts.

This is one of the main data observed by companies during a credit analysis . So plan ahead and avoid delaying payment of your bills.

What is the purpose of the personal loan?
To eliminate any doubts on the matter, it is good to reinforce that the amount released with the contracting of a loan can be used for any purpose.

However, it is worth mentioning that it is better to use this modality in cases of emergency. In other cases, it is possible to use the vehicle secured loan or the property secured loan , which offer more favorable rates.

Understanding more about financing
Like a loan, financing is a way of getting money to achieve a goal. However, the amount cannot be used in the way that the consumer wishes.

To put it better, when hiring a loan, you are limited in how much money you use . This is because it is only released for a specific purpose, which needs to meet some requirements presented by the lender, that is, by those who grant the financing.

If you are thinking of buying a new car, know that this is the most used credit modality on the market for this purpose and it grows every year .

Do you want to know more about this important option? Read on!

How does financing work?
Before hiring a loan, it is important to understand how it works. After all, a well-informed consumer makes the best choices and takes care of their personal finances.

Therefore, the first thing you should know is that the approval of this credit line is done in stages and depends on two requirements:

credit analysis;
justification for using the money.
Credit analysis is the process by which the bank assesses whether the customer is trustworthy and is able to afford the payment . In this case, it analyzes your monthly income, your relationship with the market and the existence of other pending issues.

Regarding the way the money will be spent, this needs to be very clear, as the amount released cannot be used in any way. It must be used to purchase a specific item, such as a car approved by the institution.

It is worth noting that not every good can be financed. This is because an evaluation is made to verify its status and the advantage of granting the financing. In practice, if you are unable to pay off the debt, it will stay with the bank.

Realize that we are talking about the release of a high value. Therefore, it is natural for the financial institution to take more care and conduct more in-depth analysis before approving the financing.

What are the existing fees?
One of the most important issues when choosing between a loan or financing is the collection of fees under these two types of credit.

This type of analysis is essential for the health of your personal finances and, therefore, deserves a little more of your attention. But, after all, how is the charging of fees in a financing contract?

The truth is that the interest rate is not the same across the market. Each institution works with a different remuneration, being responsible for researching and evaluating the one that offers the best conditions.

However, in general, it is easy to see that financing has this advantage over the loan. As the bank has a real guarantee that it will not suffer losses in the event of default, the interest on this transaction is usually lower.

This is a very simple premise in the financial market: the more secure the contract is for the creditor, the better the conditions for customers .

What are the payment terms?
Think about it: if the financing is released for the purchase of a high-cost asset, your payment term should be more flexible, right?

That's exactly what happens! Because it is a high-value transaction, institutions give consumers the possibility of paying off the debt in more installments than in a loan .

In the case of buying a car, it is possible to pay the full amount in 60 months, for example. When buying a house, this period is even longer, reaching 360 months, for example.

Having more time to pay off the commitment can be very interesting for the consumer, since the installments will have an amount that fits your budget . That is, it is one more way to avoid default.

But it is necessary to assess the situation from all angles. As interest is levied on all installments, a long term reflects a higher total effective cost. So it is important to plan and study which is the best alternative.

What happens if I don't pay on time?
Delinquency is still a common problem in the Brazilian market and, of course, has consequences. For this reason, before resorting to this type of credit , it is essential that the consumer is aware of what can happen if he is unable to make the payment.

If you have financed a car and have not paid, the bank has the right to take back the vehicle . But why does this happen?

The financing contract states that the legal property of the property belongs to the institution that releases the money. Therefore, the consumer only has possession during that period.

Only after paying all the financing will the car be entirely his. Just note that the CRLV contains this information and it is only removed at the end of the contract.

It is worth noting that the search and seizure procedure in the event of default is provided for by law. However, it is also not beneficial to the bank - it is just a way to mitigate its losses.

The resumption of the car is done in a judicial way and can be started after the delay of three installments . In addition, after the search and seizure, the defaulter does not have many options for negotiation.

In general, it will be necessary to pay the debt in full. That is, to be entitled to the asset again, he must pay the installments that are past due and those that have not yet matured, in addition to interest, fines and other costs provided for by law.

So, before hiring a loan, invest in financial planning. Only make this commitment if you are able to afford it . After all, the losses can be great and generate many disorders.

What is the purpose of financing?
Unlike the loan, financing can only be made for a previously defined purpose . It is necessary to inform and prove to the bank that the money was spent for the purchase of a certain asset.

In the case of the purchase of a car, the bad credit car dealership zero down car lots can do the process and pass on information about the vehicle's value, model, year, make and general conditions. It is only after analyzing all of these that the contract is signed.

Watch! If the financial institution judges that the car is not in good condition, it may deny the financing, even though its credit analysis has been positive.

That is why we said that the financing consists of two stages. In addition to checking the financed asset, an analysis is made of the possibility of granting credit to the customer.

Loan or financing: making the right choice
There was a lot of information presented, wasn't it? When it comes to granting credit, it is really important that you understand the options well and be able to carefully assess what brings the most benefits .

In the previous topics, you saw the characteristics of these two types of credit and managed to understand that they are different and, therefore, should be used in different situations.

Therefore, to choose between the loan or financing, you will need to do a study and evaluate several issues . Want to find out what they are? Follow!

What do you want to buy?
The first thing that needs to be analyzed before resorting to a loan or financing is the allocation of money .

A high-value purchase, such as a car or home, will require you to collect a lot more money, in which case financing is the most viable alternative.

On the other hand, if your desire is to resolve an emergency, the loan may be more interesting.

What is the amount of interest charged?
Continuing with the analysis, it will be necessary to observe the interest charged on each of the options. After all, you need to know what is most advantageous for your pocket .

In this case, it is essential to analyze all clauses of the contract and observe how much you will pay in total. There is no rule and this type of observation must be done on a case-by-case basis.

In addition, be sure to compare the conditions offered by the different financial institutions . There is a wide variation in the market, and it is important to do more detailed research.

How long do you need to pay?
What term do you need to pay the debt? This is another analysis that directly influences the choice of credit.

If it is necessary to split in more times, financing will be the most interesting alternative, since the terms are longer. However, if you can pay in a few installments, the loan will meet your needs.

Remembering that the ideal is to try to reduce this period , since the total cost of the contract will also be lower.

Do the installments fit your budget?
Finally, it is essential to see if the value of the installment fits your budget . There is no point in taking out a loan or financing and failing to repay it, as default can cause many inconveniences.

Make a financial plan, evaluate your real condition and only make commitments that you can pay. This is a basic premise for a stable and peaceful life. After all, nobody likes to lose nights of sleep due to outstanding debts, is not it?

After reading all this information, are you able to define the best type of credit for your needs? As we have seen, choosing between the loan or financing requires many observations, but this time wasted will give you the certainty that you have done the best for your finances. So, enjoy everything you've learned and make your choice! 2020-10-20 22:53 
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