What is the importance of simulating a loan before hiring?
To simulate a loan is essential to ensure you are making the right financing choice and avoid compromising your financial health. Understand better, then.
Why should I use a credit simulator before making a choice?
Hiring a loan is a significant financial decision, regardless of the purpose. Therefore, online credit simulators help you find the best financing proposal available in the market for you.
It is a way to compare offers quickly and practically. Comparison in this process is essential to avoid unnecessary costs and make an informed decision.
It is important to compare credit proposals due to the following factors:
- Interest rates: Interest rates (APR and APRC) applied to credit can vary significantly between financial institutions. The differences may be slight, but in the long run, they can translate into thousands of euros in the final amount paid for credit; 3
- Spread and bank commissions: The spread (bank's profit margin) and other bank commissions (such as credit opening or processing fees) vary among banks and can affect the total cost of credit. Therefore, when comparing various offers, you may find a bank that charges lower fees.
- Payment terms: The credit term directly influences the amount of the installments, with longer terms resulting in lower monthly installments but higher total interest to pay. Comparing terms allows you to choose the best balance between an affordable installment and the total cost of credit.
How to use a credit simulator?
To use a credit simulator, you will need to enter certain information, which you need to have decided in advance. Such as:
- Type of credit: You will need to select the type of credit you want, in order to choose the simulator (personal credit, consolidated, housing, etc.);
- Value and term: You must decide the amount you need to borrow, and the term you want to pay (in months or years);
- Headings: You must indicate how many people will contract the credit and stay as holders.
- Financial context: Must specify the financial context of the household, such as income and expenses, for calculating the effort rate.
According to the specific credit simulator, other additional information may still be requested from you.
The importance of comparing proposals
Credit simulators allow you to directly compare bank proposals, which is crucial for comparing the total value of the credit depending on the proposal.
This means, you must consider the APR (Annual Nominal Rate), which refers to the interest applied to credit, but even more the APR (Annual Effective Global Charges Rate), which includes all additional costs (such as commissions and insurance). The APR is the best indicator for comparing the real cost of different offers.
Let's look at an example. Imagine you are considering a personal loan of 10,000 euros with a term of 5 years, and you come across the following proposals:
- Bank A offers an APR of 6%, with a APR of 7% and a monthly payment of 193 euros.
- Bank B offers an APR of 5%, but with higher commissions, resulting in an APR of 7.5% and a monthly payment of 195 euros.
It is possible to perceive that, despite Bank B's lower APR, Bank A offers a more advantageous total cost due to lower fees. This is a clear example of how comparing loans can make a difference.
So, online credit simulators are indispensable tools for those who want to make an informed choice. Comparing different offers in terms of interest rates, fees, and payment terms helps to find the most economical credit and suitable for your financial needs.
Opt for this tool if you are looking for the best financing conditions for you! Access the simulators from Poupança no Minuto and choose according to the purpose of credit you want: