There are several types of loan available. Therefore, choosing which type to hire requires a lot of research and attention to detail, to understanding what are the characteristics of each and deciding which one is the ideal.
In this post, we explain to you what are the top 5 credit options and their particularities.
1. Payroll Loan
This type of loan is granted by financial entities to INSS civil servants, pensioners and retirees. The main features of payroll loans are:
- Safety for those involved. Since the payment is guaranteed by the direct payroll discount, the risk is minimal.
- Low interest rates. As the risk of default is small, interest rates are also the lowest in the market.
- Speed After hiring, money is usually available on the same or next business day if there is on the backlog.
This loan is one of the cheapest lines of credit in the market.
2. Overdraft Loan
Among the main features of this type of loan, we can highlight its high interest rates, which make it one of the most expensive types of loan. This value is usually released as a limit embedded in the checking account and can be used at any time.
Ease of access and high fees make overdraft to high-default format.
3. Credit Card Revolving Loan
The revolving loan is linked to the use of credit card. If the customer does not pay the full invoice amount, the bank covers the difference and then charges with interest. In this mode interest rates are also high, and can reach 20%. Therefore, it is only indicated for extreme emergencies.
The justification for the high interest rate is that the bank assigns this credit without asking for any collateral. Of course, the lower the guarantee, the higher the interest, and vice versa.
This type of loan is used by people who own valuables and want to use them to secure repayment of the loan. Thus, the loan amount is linked to the value of this object. Several objects can be pledged, such as:
- Gold watches and utensils;
- Real estate, etc.
The pledge has its main characteristics the speed, low bureaucracy and attractive interest.
It is worth noting that, in some cases, it can be obtained even when the customer has credit restrictions, ideal for those who need to pay off a debt, for example.
5. Bank Credit Lines
Bank credit lines are granted according to the profile and relationship of each customer with their institution. In these loan models, the amounts are already pre-approved by banks and usually have high interest rates. Therefore, they require little bureaucracy, as the bank seeks to stimulate this type of loan.
Planning is still the best way out
Now that you have known the top 5 loan types, try to plan for the most convenient interest and repayment terms. The best way to choose your loan is by looking at the conditions that suit you best and talking to your manager.