When the only way to solve a financial problem is to take out a loan, you have to stay alert, know the conditions of the contract and do market research. When the subject is a loan, the consumer is faced with two alternatives: to carry out a bank loan or to sign the loan in financial.
In most cases, the customer is in a hurry because they need to resolve some financial issues urgently. This situation ends up causing him to not research right and end up failing to choose the financing.
However, this decision must be taken with caution, since the loan may be one of the most expensive credits on the market. In many cases, the client does not weigh the differences between bank loan and financial loan.
This situation generates difficulties to fulfill their obligations when the time comes to pay the installments of the loan, generating, in many cases, a “snowball” of debts – that can cause serious damages to the finances.
We have prepared this article for you who are considering making a loan. The purpose here is to present all the points that need to be considered before signing a financing agreement, as well as showing the best loan modality and the main differences between them. Keep reading and do not go wrong in choosing your loan!
Why are loans more and more common?
In recent years, both loans and financing have grown significantly among those people who need credit and are not financially available to meet obligations or to resolve emergencies.
The main factor for the popularization of these types of loans is the ease of signing this type of contract and increasing the occurrence of debts such as debts with credit card and overdraft.
However, in addition to debt repayment, many people opt for loans to make domestic reforms, invest in vehicle purchases or even travel.
When chosen correctly, the loan can be very advantageous, both economically and within the family financial strategy.
The reason for applying for the loan does not matter. What really should be taken into consideration is their need and the importance of planning before signing the contract with the institution that will grant the money. For this to happen, knowledge and information are essential.
What are the most common types of loans?
Before delving deeper into the issue of the differences between bank and financial loans, let us explain the most common types of loans and their key features.
Knowing each one of them, understanding their differences, advantages and disadvantages allows the consumer to more clearly assess which one best fits their needs and goals.
The payday loan is a loan with indirect payment, that is, the installments are deducted directly from the payroll or the benefit of the individual.
This type of loan can be obtained from banks, insurance companies and financial institutions, and its main advantage is that the consumer does not have to worry about the monthly payment, since the charge is made automatically.
This significantly reduces the occurrence of problems related to delays, fines and interest, which are very common in other types of loans.
In general, in addition to the facility generated by automatic collection, another benefit in relation to other loans is that interest rates tend to be lower in this modality.
An important tip with regard to payroll deductible credit is that the consumer should be aware that the amount of the installment does not commit more than 35% of their monthly income, since the commitment of a larger amount may cause other financial problems.
Some financiers already take this value into consideration before granting the loan, which provides more security for the consumer who hires the service.
Overdraft is a loan made exclusively at banking institutions. Its advantage is practicality, since it is automatically placed at the current account limit and does not require the need to make a prior request to the bank.
However, its major disadvantage is that it has very high interest rates, which can make payment by the consumer unfeasible.
Many people use the overdraft without being aware of the obligations (interest and fines) tied to it. This reality has generated a significant increase in the cases of delinquency and negativation in the country.
Personal payday Loan
This type of loan also stands out for the ease and speed in obtaining. However, unlike overdraft, the personal payday Loan requires that a value be defined and that the consumer undergo an assessment before approval.
The main disadvantages of personal credit are payment periods (extremely short) and interest rates that in many cases are abusive.
The consumer who is looking for a loan must be aware that the debt does not become too high and its payment becomes unfeasible.
The problem of this modality is very similar to the one of the overdraft, since the consumer can be faced with a debt so high that its income becomes insufficient to cover the obligations.
This is a loan directly linked to the use of the credit card. It is used when the cardholder can not pay the total amount and only makes payment of the minimum amount of the invoice.
In this case, the financial institution pays the balance and charges the consumer in the next invoices. Here you must be aware, as the bank will continue to charge the value linked to extremely high interest rates.
The only advantage of this model is that the consumer can choose between paying the minimum amount or the full amount of the invoice. The disadvantage, as in previous ones, is related to extremely high interest rates.
What’s better: bank or financial loans?
Now that you know a little more about the types of loans available in the market, it is time to understand how the process works and the difference between the loan in banks and the loan in financial.
It has already been realized that some modality can only be made by banking institutions, as is the case of the overdraft. In addition, in general, the interest charged by the banking institutions is higher and the index of problems with contracts and fines is also higher in bank loans.
Understand below the main characteristics and the differences between financial and banking institutions.
Loans in financial
Financial institutions are specialized lenders, mainly for individuals. As the work is focused exclusively on loans – unlike banks, which offer various types of services – the consumer is more easily in contact and objectivity with the financial ones.
Loans in finance still have other advantages that the consumer does not find in banking institutions, such as differentiated rates for each degree of indebtedness of the consigned, which allows more flexibility and security in the payment of the assumed obligations.
In addition, in financial terms consumers have the option of applying for a loan even if they are called negative – which is another facility that is not found in loans offered by banks.
The broader credit limit is one more advantage that differentiates a loan from a financial one in relation to a banking institution. In many cases, the consumer is able to obtain a higher amount on the loan requested from the financier.
Perhaps the main disadvantage of financial lending is that not all people can do it. Overall, it is focused on a very specific audience, which limits the number of people who fall into the profile of clients to be served.
However, if you are looking for information on obtaining a loan, our tip is that you contact a financial institution directly, informing them of the amount required and requesting an evaluation of your profile to identify the feasibility of signing a loan agreement.
Loans to banks
Banking institutions, as already mentioned, offer some loans that you do not find in financial. In general, however, these available loans have higher interest rates, do not cater to any public, and often come to the consumer full of problems.
Among those problems, one of the claims champions are married sales. Married trading is an illegal practice, prohibited by the Consumer Code, but still adopted on a large scale by banking institutions.
A common example of a married sale concerns a consumer who, when taking out a loan with a banking institution, also contracts life insurance without realizing it or not being properly advised about that service.
He only realizes that he took out insurance when he gets the bill. This is because banks offer various services, and the employees of these institutions are obliged to achieve goals.
To achieve these goals, they “push” other consumer banking services. Many people, for lack of knowledge and experience, end up acquiring these services, which increases the account and negatively impacts personal finances.
The fact of working with more than one service is a negative point of the banking institutions, because the consumer ends up being induced to buy services that go beyond the loan initially requested.
Another characteristic of banking institutions is the difficulty of contacts in solving problems. Many consumers have doubts about their contracts and find obstacles in communicating and requesting information.
They are oriented to make calls to call centers, talk to several people and end up giving up asking for information because they can not get a closer and personalized service.
Before you choose to take out a loan with a financial or a banking institution, you should be aware of the characteristics of each one of them and their specific needs.
Analyzing the loan agreements of both is also important as it helps to understand how the institution works and how the bond will be signed. Always remember to research calmly before closing any type of loan agreement. Always evaluate the options offered and only choose after an in-depth analysis of the proposals.
How to make an online loan?
The online loan is a solution that has emerged in recent years and has become extremely interesting for those people who need quick cash and no common bureaucracy in banking institutions.
With the spread of the internet and the popularization of the use of technologies, the consumer is able to research options and how to make a personal payday Loan online, performing simulations and even signing the contract.
You can find financials that offer debt simulation, allowing you to evaluate and compare loan proposals in different scenarios.
Among the major types of loans online, you will find personal payday Loans, credit card, payday loans and home and car financing. However, before hiring an online loan, you should be aware of some important tips. Check out!
The first step is to research offers and verify the seriousness of the company that is offering the loan. You should be careful not to fall into a scam and risk losing money.
Even if you need extra cash urgently, online personal payday Loan should be done calmly and the hiring can only be closed after a previous research.
Evaluate the available loans and check which one fits your needs
After researching the offers, the second step is to evaluate which loans are available and which one best fits your needs.
payday loans are often an interesting option because they have very low interest rates and the payment of installments is facilitated, since it is automatically deducted from the salary / benefit of the consumer. Thus, it does not run the risk of delaying payment and ensures the maintenance and regularity of the contract.
Do a loan simulation
The financial companies that offer loans online offer a simulator that allows the consumer to inform the amount to be borrowed and to know the amount of the installments that will be generated to fulfill the obligation.
With this information, the client is able to assess which of the loan options has the lowest Total Cost Effective – which is the total cost of the loan, including all fees and interest on it – ensuring greater security and economy.
With this information in hand, the consumer has elements that allow you to more carefully evaluate what the best loan option is for your pocket. In many cases, it is possible to do the entire process online, requesting credit, sending documents and information, and receiving the money directly into the bank account.
What care do I need to take before making a loan?
Now that you know what the difference is between the bank loan and the financial loan and you already know the facilities and advantages of the loan online, check out a list with some care that you must take before signing a loan agreement.
Your financial capacity
Before committing to any type of loan, the consumer must assess whether he has the financial capacity to comply with the obligations set forth in the contract. To help you better assess your financial standing, we separate some questions that must be answered.
- How much do you earn monthly?
- What are your monthly fixed expenses?
- What are the other expenses that are part of your routine?
- What is the amount you have available to pay the installment of the loan?
- Is this sufficient to meet your obligations if you decide to apply for the loan?
- If you apply for the loan, what is the amount of your income that will be committed to fulfill the obligations?
It is important that the consumer does not fully commit his financial resources, since extra costs may arise, and a financial reserve is needed to cover these costs.
Therefore, calmly assessing your financial capacity and your ability to fulfill the obligations that will be assumed in your financing agreement are an important step before applying for a loan, either in a bank or a financial institution.
Costs and interest
The second caution you must have before applying for a loan is with the interest rates charged. At this point you need to evaluate the Total Effective Cost, which we talked about earlier.
The CET indicates all fees related to the loan and helps evaluate the total cost of the operation – that is, it gives an overview of the business. It is knowing the Total Effective Cost that you will calculate the amount that should be directed towards the future fulfillment of the obligation assumed in the loan agreement.
Another care that you need to take when applying for a loan is the evaluation of the payment deadlines. You should study how long it will take to take away the integrality of value.
In the contract, you will be able to evaluate this information, as well as the relationship between contract time and interest – which may increase over time.
In the case of an increase in the installment, it is necessary to prepare a long-term planning, taking into account your monthly income and the percentage that will be committed for the payment of the installments of the loan.
Fines and other values
Fines and other amounts attached to the contract should also be evaluated very carefully. Check in the contract if there will be a fine in case of late payment and what percentage will be charged for this delay.
That way, you have elements that allow you to analyze a possible scenario if you can not fulfill your obligations on the stipulated day. This factor also helps to assess whether the loan fits in your pocket or if it becomes unworkable in case of late payment.
Always remember that the care, in general, is to evaluate your financial capacity and the possible adverse situations related to the contract and the obligations assumed there.
It is worth noting that in payday loans, situations such as delays are more unusual, since the installments are discounted directly from the account, reducing the risk of problems such as these.
However, the clauses of the payday loan agreement must also be read and known by the consumer, who before signing must clarify any doubts with the financial.
Scams are much more common than we think. One of the best-known scams on the market is loans that are offered to consumers with interest far below the market and with a form of payment made too easy.
Generally speaking, to identify a scam, a good tip is to evaluate whether requests for early deposit are requested for the release of the loan. This is not a common practice, so if an early deposit is requested, stay tuned: it can be a scam!
Another tip to avoid problems is to do a search on the company on the internet. In the network you will find information about attendance and possible problems related to that company.
As you might see throughout this article, financial loan is an extremely interesting solution for the consumer, especially for one who seeks quality service and wants to stay away from situations like married sales or abusive interest rates.
In order to choose a serious finance company that meets customers in compliance with the law, you must do a market search and look for solid, recognized companies with well-attended and satisfied customers. So, do not be afraid to search the internet, get the opinion of clients already served by the company in question and take a look at sites like the Reclame Here, to check what types of complaints are made regarding the chosen organization.