How about you understand how the interest on your vehicle financing installments works? Before deciding to buy your car, use a financing calculator to know the interest can be a very important factor for you not to be caught by surprise with unexpected values.
Many people make a financing agreement and do not analyze the main part of that agreement, which is the calculation of interest and possible fines or possible delays.
In Brazil, people usually don't calculate interest on financing a vehicle that will pay off in years, and they are unlikely to finance cars in a few months.
So, we can say that it is very important for you to do the calculation to find out what amount you will actually be committed to paying the vehicle installments. And that's why there's Financial Calculator.
Another essential thing is that you put together a plan and save an amount to pay for your car down payment.
We have prepared a special article for you to learn about interest and financing rates and also how to make interest calculations with the financial calculator.
To facilitate your understanding of calculating interest installments and fines, our Digital Seguro portal has also prepared an online vehicle finance simulator. An interactive financial calculator where you will get calculate the value of the vehicle you want and, in this way, compare which bank (or financial institution) has the best price. However, before that you need:
Let's understand how financing works
You need to do market research to find out which are the best options for your financing, that is, term, amounts, rates, etc…
Financing is not a short debt that you pay off in a few months, unless you have a financial education, which consists of planning all your debts.
This step is very valid both for the search for financial institutions and for the ideal vehicle that you are looking for.
Experts recommend that you take your time while you're not committed to any very long contracts to do comparative research until you're exhausted! We'll talk a little more at the end of this article!
After all, the best way to avoid that famous post purchase regret it's for you to be aware that you made the best possible choice within your budget. Here's why you know how to use a financial calculator.
You see, as for the specific type of car, we always recommend that you try to filter your alternatives with vehicles that are, at most, up to 10 years old.
Economists also recommend that this is a minimum requirement for many institutions and many banks to release the contract.
Always try to consider the best modality
In this regard, you will always need to make the final decision between CDC or even leasing.
In general terms, we can understand that the CDC (Consumer Credit) is the most selected option, both due to greater availability in institutions and the immediate purchase of your vehicle.
You need to compare the conditions
This is a time to “don't go soft” and look for the specifications of each of the financing institutions in the market.
And another most important thing, during your search, you should focus your attention on these questions:
What will be the maximum term for payment?
What is the maximum amount financed by the bank?
And the interest rate charged?
Certification the best option?
Remember, dear Digital Seguro readers, it is essential that you confront your certainties with these questions through skeptical research, that is, you eliminate harmful options for your budget.
Before using the financing calculator, understand the main types of interest on the market
For different types of loans and financing, there are distinct shapes to define how interest will be charged. Next, we'll briefly cover the most common types.
How does simple interest work?
Friends, in general, for you to understand, we can say that in this modality, the interest rate is regularly applied to the total amount of the debt.
Let's take an example: in a loan of R$ 12,000 to be paid in 12 installments of R$ 1,000, with an interest rate of 10% per month, the value of each installment will be R$ 1,100.
However, the total amount paid at the end will be R$ 13,200.
See how practical it is to understand? Realize that the amounts will change according to your type of financing.
Compound interest
Another very important type of interest for you to understand when making a financing or even a loan.
Here, compound interest rates, also known as “interest on interest”, are a little more difficult to calculate, however, it is not impossible at all.
Take a good look: with each installment, the sum of the price to be paid is made based on the initial amount and interest on previous installments. It is for this reason that compound interest rates can be a complete trap for financially disorganized people.
Let's go: in a car loan of R$ 10,000 to be paid in four installments under compound interest of 10% per month, the first installment will be: R$ 2,500 + R$ 2,500 / 10 = R$ 2,750.
The calculation of the second installment will be based on the amount paid in the first (R$ 2,750.00) — and so on.
Complicated? Then:
Learn how to use the Digital Seguro financing calculator
Our team has developed a special calculator for you to be able to calculate the interest and fees of a loan, it is very intuitive and simple to use.
You can calculate the Simple Interest or the Compound interest, you just need to click on the respective links, and continue doing the simulations according to the desired values.
When to Use the Loan Calculator
It is a very interesting question, as many people say they have no doubts about the interest rates or installments of a loan. But experts recommend using the calculator to find out if the amount of your financing installments is really fair.
It is also recommended, before closing any deal, that you compare whether the bank you have chosen has the lowest interest rates on the market.
But here at Digital Seguro you are always well informed about the main information that involves your financial life.
Below, check out how the Digital Seguro calculator works, and also the link for you to do your simulation of interest on your financing installments.
Click here to do online simulation of interest on your installments
Final considerations
Don't close a deal without first simulating all the scenarios!
Always try to gather values, rates and information from different institutions, remember that you are incurring a long-term debt.
Therefore, it is extremely useful that you use a calculator to simulate financing, to identify the weight of this purchase over the months of the contract.
For more information about financial education, loans, or financing, Click here and check out other exclusive articles.
