FINE: Know how to analyze a credit proposal
When buying a house with a housing loan, you may come across some terms that may seem confusing at first. If you have already started the process and the bank has given you a document called FINE, know its purpose and how to analyze it.
What does FINE mean?
The concept of FINE is an acronym for European Standardised Information Sheet. This sheet includes all the information that the consumer should know regarding details and conditions of a financial product, like home credit.
What is the purpose of FINE?
FINE is a document used by European banking entities to reference all important information about a financial product. Since 2018, this document is governed by European standards, with a structure based on the same rules throughout the European Union. However, in terms of content, differences can be found in the FINE from bank to bank.
This document gathers information such as the entities involved in the proposal, from the bank to the credit intermediary if applicable, the characteristics of the credit, applied interest rates, details about monthly installments, associated products, early repayment, consequences of non-compliance, among others. In other words, you should pay special attention to this sheet because it details the amount you will pay for your credit.
If you need to make a comparison between banking proposals for your credit, you should look to FINE. Since it guarantees the same structure in various banks, it is easy to compare the conditions between various credit proposals to understand which one is most beneficial for you.
When do I get the FINE?
The European Standardized Information Sheet must be provided by the bank to a consumer on two occasions: [URL].
- When simulating a credit proposal, whether through a request made from an online simulator, a direct request;
- And at the moment of credit approval, in order to formalize all information related to the credit.
This document has a validity of 30 days, from the moment the simulation is delivered, so that the customer has time to analyze and compare proposals and make a decision. And even if the consumer makes a decision in the first few days, there is a mandatory reflection period of 7 days, after the simulation is sent, to formalize a proposal.
How to interpret the FINE?
Next, we will demonstrate the informational points presented in FINE and how to interpret each one:
1. Lender - Refers to the information about the bank entity that is granting the loan;
2. Main loan characteristics - Indicates the credit characteristics such as: financing amount, type of credit, interest rate, Total Amount Imputed to the Consumer (TAIC), guarantees required by the bank, and the presumed value of the property to be financed;
3. Interest rates and other costs - Includes the value of the Effective Global Cost Rate (APR), the Nominal Annual Rate (NAR), the commissions paid to the bank, and also information about the required insurances;
4. Periodicity and number of installments/Initial installment amount - In this section there is complete information about the installments, periodicity, and monthly value according to the index (in the case of the Euribor, it depends on the chosen term for it, for example);
5. Additional obligations - Refers to all obligations that the borrower must fulfill in order to maintain the credit;
6. Early repayment - Describes the conditions if you want to repay the credit in advance;
7. Flexible features/Consumer rights/Complaints - If the customer wants to transfer the credit to another bank, for example, this part indicates the information about the flexibility to do so, the rights to be informed to the consumer, and the contacts if you want to make a complaint;
8. Default/Consequences for the consumer - Here are described the consequences if the borrower is late in paying the credit installments, that is, the late interest rate to be applied;
9. Optional associated sales - Refers to the APR depending on the contracted products;
10. Repayment tables - Finally, you have access to a table with the expected values to be paid throughout the contract, that is, the repayment plan of the financing to the bank.
There are two charts displayed: one representing the values of the current hiring context, considering the current Euribor value, and another with a forecast of the financial return if the Euribor rises to the highest value reached in the last 20 years.
To make a conscious and informed decision, the credit intermediaries of Poupança no Minuto can assist you in the process of comparing proposals through FINE. Buying a house through a housing loan can be a headache, but if you are accompanied and advised throughout the process, it becomes easier. Therefore, through a free service, you ensure that you have the best credit conditions for you.