Taking out a loan may be the only alternative for those who are in debt, have lost their job or had an emergency expense. You need to know where and how to get credit, so you don't sink even deeper into debt.
First of all, know that the loan is always the last option, to be used only in emergencies or to exchange an expensive debt for another more affordable. The credit line, it is not worth paying interest to the bank for something that is not urgent, like renovating the house or traveling, for example.
Below, check out tips to get into debt in the healthiest way possible and prevent your loan from turning into a snowball:
1) Prefer payroll loans, but research before hiring
After financing a property and a car, payroll loans are the type of loan with the lowest interest rates on the market. This type of credit deducts the installments directly from the INSS salary or benefit, so the risk for the financial institution is low.
2) Look for cheaper loans to refinance debts
You can take out a loan with lower interest rates to pay off a more expensive debt. “This will not reduce your debt, but it will make it grow at a slower rate”, explains Marcela.
Only those who are salaried or receive benefits from the INSS can take out payroll loans. If this is not your case, the second best option is a personal loan, before paying interest-bearing purchases in installments, using an overdraft or paying your card bill in installments.
3) Beware of online loan scams
Keep an eye out for online lending websites and apps, which have spread rapidly in recent years and promise to charge lower rates than traditional banks.
When taking a loan from a bank correspondent, try to find out who the bank or finance company is behind offering the credit and find out about its credibility on the internet.
For other personal loan information, Click here.
