IRS delivery: How refunds can help reduce credit costs.
Are you getting an IRS refund? Learn how to use it to pay off your mortgage, reduce installments, or consolidate debts, saving long-term interest.
How to use IRS refund to alleviate the costs of your credit.
With the IRS declaration delivery starting on April 1st, many people eagerly await the refund.
The extra value can be a strategic ally to improve financial health, especially for those with ongoing loans.
There are several smart ways to use the IRS refund to decrease financial burdens: From paying off a mortgage to reducing personal loan payments or facilitating access to consolidated credit. Let's take a closer look.
Repay the mortgage loan
If you have a mortgage, using the IRS refund to amortize part of the debt can be an excellent decision. The lower the outstanding capital, the less interest you will pay over time and the lower the monthly installment becomes.
With the amortization, the value of interest paid over time decreases, and the debt value decreases, reducing the monthly payment. This could represent significant savings, depending on the conditions of your contract.
You should know that, currently, if you have a fixed rate, the bank charges a 2% commission for early amortization, but if you have a variable rate, you will not have to pay a commission until the end of 2025 because it is exempt (if you have a mixed rate, it will depend on which rate is in force at the time).
Better understand: Mortgage credit: Early repayment commission will continue to be suspended in 2025
Reduce personal credit installments.
For those with personal credit, the IRS refund can help reduce the amount of monthly installments or pay off part or all of the loan early, freeing up the family budget for other essential expenses.
With this amortization, the monthly installment can be lowered or the loan paid off earlier, reducing the total cost of interest.
Note that the same early repayment commissions for housing credit apply to personal credit: maximum of 2% for contracts with a fixed rate, and until the end of 2025, contracts with a variable rate are exempt from this commission.
Consolidate debts.
If you have several credits (housing, personal, credit cards), using the IRS refund to reduce the outstanding balance can make it easier to obtain a consolidated credit.
This type of credit allows you to merge all debts into a single monthly payment, usually with a lower interest rate.
Advantages of credit consolidation:
- Reduction in overall interest rate;
- Unique and lower monthly installment;
- Better management of the family budget.
If a portion of the balance is reduced before consolidation, the new installment will be even lower and easier to pay.
Read also: Which credits can I consolidate?
Instead of spending the IRS refund on non-essential expenses, consider it as an opportunity to improve your financial situation can bring long-term benefits. Whether to pay off a mortgage, reduce personal loan installments, or consolidate debts, this strategy can help ease financial burdens and increase economic security. Evaluate your situation and make the best use of this amount!
To do so, you can go to your bank or ask for help from a credit intermediary from Poupança no Minuto to proceed with the amortization process or contracting of consolidated credit. They handle everything for you, without having to pay anything! Contact us now or simulate credit consolidation: https://www.poupancanominuto.com/contacto