What is the importance of simulating credit before engaging in a contract?
To simulate a loan is essential to ensure that you are making the right financing choice and avoid compromising your financial health. Understand better, next.
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 on 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 APR) 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.
- Banking spreads and commissions: The spread (bank's profit margin) and other banking commissions (such as credit opening or processing fees) vary between banks and can affect the total cost of credit. Therefore, when comparing different offers, you may find a bank that charges lower fees.
- Payment terms: The credit term directly influences the value of the installments, with longer terms resulting in lower monthly installments but increasing the total interest to be paid. 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 beforehand. Such as:
- Type of credit: You will need to select the type of credit you want, to choose the simulator (personal credit, consolidated, housing, etc.);
- Value and term: You must decide the amount you need to borrow, and the term in which you wish to repay it (in months or years);
- Headlines: You must indicate how many people will take out the credit and stay as holders.
- Financial context: It 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 direct comparison of bank offers, crucial for comparing the total credit amount depending on the proposal.
That is, you should consider the APR (Nominal Annual Rate), which refers to the interest applied to the credit, but even more the APR (Effective Annual Cost Rate), which includes all additional costs (such as commissions and insurance). The APR is the best indicator to compare the actual cost of different offers.
Let's see 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 an APR of 7% and a monthly installment of 193 euros.
- Bank B offers an APR of 5%, but with higher fees, resulting in an APR of 7.5% and an installment 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, commissions, and payment terms helps to find the most economical credit and suitable for their financial needs.
Opt for this tool if you are looking for the best financing conditions for you! Access the simulators of Poupança no Minuto and choose according to the purpose of the credit you want:
Watch this video to learn everything you need to know before taking out a mortgage loan: