Are you looking for a loan but still have questions about the options available? And which one is better for you? The time has come to stop them and find out if your profile is more for personal credit or secured loan!
Certain types of loans require money to be spent on something specific. This is the case, for example, of real estate or vehicle financing. When it comes to renovating the house, traveling, dealing with unforeseen events or simply paying off debts and getting out of a choke, the consumer has some other options. These include the secured loan, also known as refinancing, – property or vehicle – and personal credit.
With different characteristics, these two types of loan usually work with much lower interest rates than the revolving credit card and overdraft. Besides, the deadlines are also very interesting. In the case of secured loan, it can take up to 20 years to pay back the amount. But how do you know which option is best for your pocket? We explain.
Guaranteed loan: low interest and longer repayment term
- A lot of people still have questions about refinancing. After all, if the car or property is already paid, why make a new loan for it? That is why, to avoid confusion, another widely used term for this type of credit is secured loan. That is, when you borrow the money from the bank or financial institution, you leave one of these two assets in your name as a guarantee of payment.
- By making companies safer, refinancing helps them achieve higher values. And, what’s better, for lower interest rates and more time to pay. To give you an idea, in secured home loan, you can get up to 60% of the property value. With interest starting at 1.15%, and up to 20 years to pay. In vehicle refinancing, rates start at 1.49% per month. And the credit released is up to 70% of the appraised value for the car.
- Advantageous she is! On the other hand, this loan option also has its limitations. Starting with who can apply, the secured loan is only available to those who have a car or property in their own name. Also, because it depends on a valuation of the asset placed as collateral, credit may take a little longer to be released. Ah! And you need to be up to date with taxes and bills like property tax, property taxes, fines or condominium.
Personal credit: fast cash and no paperwork
It is the most widely used type of loan in Brazil, and it is not difficult to understand why. Little bureaucratic, he demands nothing as collateral. To release money, banks and financial institutions rely solely on a credit analysis. This analysis is done from your customer’s social security number and other information such as:
- monthly income;
- and payment history.
Since the company that lends the money is unsecured in the event of default, interest rates are slightly higher than those of the secured loan. The overall market average starts at 2.0% per month. Even so, they are still far from the 13% often charged for overdraft.
Also, once approved, the credit is released quickly. Usually within 48 business hours the money is already in your account. From there, just decide what to do with it and of course, pay the installments to maturity to avoid additional charges.
After all, which is the best: secured loan or personal credit?
While secured loan rates are very advantageous, the truth is that there is no ready answer to this question. It will all depend on factors ranging from your profile to the amount of credit you want, through the payment terms. In the following, we compare the two types of credit in some key ways:
- Prerequisites for approval: They are more flexible in personal credit. Since you do not have a property or vehicle paid off in your own name to stop warranty. It is noteworthy that, in both types of credit, who is negative can also get. Remember that even in the secured loan, the approval is subject to credit analysis.
- Practicality and agility: Although both types of loans are practical and can be applied online, on the Astro Finance platform, personal credit is a little less bureaucratic. Since you leave nothing as a guarantee. When refinancing, vehicle or property documents are requested, which may also undergo a prior valuation.
- Term and interest rates: As stated earlier, they are best in home or vehicle secured loans. For with this type of loan, the bank or financial institution is prevented in case of default. Thus, charging has lower interest rates. And the values released are also usually higher.
- Loan Risks: In the event of default, personal credit can charge you fines and high interest rates, helping you get into debt. However, the risks are higher in refinancing: from 3 late installments, the bank or financial institution can now start the process to auction the good, and repay the debt.
Before opting for one of the two loans, consider the above factors. From them, it’s easier to decide which option is right for you. Also try to compare as many offers as possible. By simulating Astro Finance, you get between 1 and 10 pre-approved loan offers according to your profile.