How to choose a personal loan?

If you are looking to hire a personal loan, the credit intermediaries from Poupança no Minuto save you: They can find the best offer on the market and handle the entire process for you, at no cost! Contact an agent now.

How to choose the best personal credit?  

Hiring a personal loan is now easier through digital channels. However, choosing the right personal loan can be tricky. It's important to be aware of all the details before signing up, and compare several proposals beforehand to ensure you are accessing the best or most suitable option for you.

Personal credit can be a solution for small or large investments, vacations, small renovations, any type of project that requires extra funding. However, it should be noted that the borrowed amount must be repaid with the respective interest.

According to DECO PROteste, in order to protect consumers with banks, in 2010 the Bank of Portugal created a regime of maximum rates that is updated quarterly for personal, car, and credit card loans. (Source: https://clientebancario.bportugal.pt/pt-pt/taxas-de-juro-no-credito-aos-consumidores)

Banks are responsible for assessing the solvency of customers when they request credit, gathering all necessary information and documentation to determine if the customer has the ability to repay the amount they are requesting. However, consumers should also evaluate their own income before taking out a loan. The total of all payments should not exceed 35% of their net monthly income, explains DECO. (Source: www.poupancanominuto.com)

Even if you believe you can afford a new monthly credit installment, it is important to know that you have chosen the best option, with the lowest possible cost. To do this, you must make several simulations at different banks, with the same amount to finance and term, so that you can compare the Effective Annual Interest Rate (APR), which includes total contract interest, fees, taxes, and costs with mandatory insurance. The lower the APR, the lower the credit costs. Therefore, when comparing proposals, you should always look for the lowest APR. 

Factors to consider in the cost of credit  

Note that, when comparing proposals, there are some factors that can significantly impact the cost of credit.

As a rule, banks propose the hiring of certain associated products with credit, such as insurance, in exchange for a bonus on the interest rate applied to the financing in question. However, the amount that can be saved by not hiring the associated products may offset the amount that would be paid with the bonus on the rate. In that case, you can refuse to hire the products in your credit.  

Another issue that can impact the cost of credit is the repayment term. The longer the repayment term, the more expensive the credit will be overall. However, the longer the term, the lower the monthly installment to be paid. This is because the total amount will be diluted, but the longer the payment period, the more interest you will have to pay. Therefore, even if the bank proposes the maximum term, which can currently go up to seven years in personal credit, consider a shorter term in which the monthly installment is comfortable for you.

Want to hire a personal credit, saving money in your wallet, time and avoiding bureaucracy? The credit intermediaries services of Poupança no Minuto are for you! We do not charge any cost and gather various market proposals suitable for you, so you can choose the most advantageous. Get in touch with us and make your project happen now!