How to choose a personal loan?

If you are looking to take out a personal loan, the credit intermediaries at Poupança no Minuto can help you save: They can find the best offer on the market and handle the entire process for you, at no cost! Get in touch with an agent now.

How to choose the best personal credit?

Hiring a personal loan is currently facilitated through the digital channel. However, hiring the right personal loan can be another story. It is important to be aware of all the details of what you are hiring, and to be able to compare several proposals beforehand to know that you are accessing the best or most suitable for you.

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

According to DECO PROteste, in order to protect consumers from banks, in 2010 the Bank of Portugal created a regime of maximum interest rates that is updated quarterly for personal credit, car loans, and credit cards.

Banks "have to assess the solvency of customers when they request any credit, gathering all necessary information and documentation to understand if the customer has the ability to pay the amount they are requesting." However, the consumer "should also evaluate their own income before taking out a loan. The weight of all installments to be paid should not exceed 35% of their net monthly income," explains DECO.

Even assessing that you can support a new monthly loan payment, it is important to know that you have chosen the best option, with the lowest possible cost. For this, you should make several simulations in different banks, with the same amount to be financed and term, so that you can compare the Effective Annual Total Cost Rate (TAE), which includes the total interest of the contract, commissions, taxes and costs with mandatory insurance. The lower the TAE, the lower the credit costs. Therefore, when comparing proposals, you should always look for the lowest TAE.

Factors to consider in the cost of credit  

Note that, when comparing the 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 you can save by not hiring the associated products may outweigh the value you would pay with the bonus on the rate. In this case, you can refuse to hire the products with 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 spread out, 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 can currently go up to seven years in personal credit, consider a shorter term where the monthly installment is comfortable for you.  

Do you want to hire a personal loan, saving in your wallet, time, and avoiding bureaucracy? The services of the credit intermediaries from Poupança no Minuto are for you! We do not charge any costs and gather several market proposals suitable for you, so you can choose the most advantageous one. Contact us and make your project come true!