How to choose a personal loan?

If you are looking to hire a personal credit, 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 means. However, finding the right personal loan can be a different story. It's important to be aware of all the details of what you are hiring, and be able to compare several proposals beforehand to know that you are accessing the best or most suitable one for you.

Personal credit can be a solution for small or large investments, vacations, small renovations, any type of project that requires extra financing. But it is important to note that the borrowed amount must be returned with the respective interest.

According to DECO PROteste, in 2010 the Bank of Portugal created a regime of maximum rates to protect consumers from banks, which 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 should evaluate the creditworthiness of customers when they request credit, gathering all necessary information to understand if the customer can pay the amount they are requesting. However, the consumer should also assess their own income before applying for credit. The weight of all payments should not exceed 35% of their monthly net income, explains DECO.

Even if you think you can handle 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 should make various simulations with different banks, with equal amounts to be financed and terms, so that you can compare the Annual Percentage Rate (APR), which includes the total interest of the contract, fees, taxes, and costs of 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 the credit, such as insurance, in exchange for a bonus in the interest rate applied to the financing in question. However, the amount you can save by not hiring the associated products may outweigh the value you would pay with the bonus in 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 you take to pay, the more interest you will have to pay. Therefore, even if the bank proposes the maximum term, which currently can go up to seven years in personal credit, consider a shorter term where the monthly installment is comfortable for you.

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