3 types of loans and the benefits of each

Whether for lack of job, reason for illness or to buy a car or property, at some point in life many people have had to resort to some type of loan.

There are many types of loans offered by banks and financial institutions, but do you know how they work and the benefits they can provide?

To answer some of these questions, we have listed here three main types of loans for you to choose the one that best fits your financial situation.

 

Types of loans

Payroll loan

Types of loans

It can be requested by workers with a formal contract, public employees or INSS beneficiaries (including retirees), and it is released through credit analysis. It works as follows: the loan installments are deducted directly from the salary or benefit, monthly, before the payment is received. In this way, financial institutions are guaranteed that they will receive the installments on time, reducing the risk of default.

Because of this mechanism, the interest charged is much lower when compared to the personal loan, which is the main attraction of this type of loan. Before requesting it, you must consider that the installments will be deducted directly from your salary every month, which causes a lower income availability. It is a way to cover unexpected expenses and, if used responsibly, it can be a good option.

 

Loan with pledge

Loan with pledge

It consists of taking some object of value such as jewelry and silverware to a regulated pawnshop and receiving money in return, which can reach up to 85% of the value of the pledged asset. The money is released on the spot, without the need for credit analysis, but the item is consigned as collateral and will only be recovered after you pay off the debt. For this very reason, its main advantage is the agility in accessing money, as it also does not need guarantors.

It is one of the fastest and least bureaucratic loan alternatives. It is indicated that this option is used to settle debts urgently. And attention! This modality recommends some precautions. Choose a reliable pawnshop and pay off the debt so you don’t lose the pawned item. Normally, Cream Bank Federal branches have their own pledge window in most cities in the country.

 

Personal loan

Personal loan

It is common for banks to offer credit lines according to the profile and relationship of each customer. The amounts are already pre-approved by the bank and have interest rates slightly higher than the payroll loan, but have minimal bureaucracy.
The possibility of having extra money falling into your account is tempting, but it is not worth taking out a loan, for example, to buy something superfluous, like a new cell phone. If you have expensive debts (credit card and overdraft), switching to a cheaper one, such as personal credit, is a good option. Opt for lines with low interest rates, such as the one offered by Just and other partner institutions of Best Bank (you can see several offers in the comparator within the application).

The best types of loans for you will depend on your urgency, condition and financial situation. The most important tips are planning, information and installments that fit in your pocket, so that debts do not accumulate and make your financial life unfeasible.

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