Posted by Brian Mason on December 14, 2019
Often, applying for a loan is the only way to unburden your financial life and get your accounts in balance again. A common disadvantage of this type of request, however, is that most loans do not go out of their way: in addition to the amount you actually use, you still have to pay a fee. extra amount that comes in the form of interest rates.
Because of this, if you need a loan, it is important to look for low interest options.
Is it possible?
One of the biggest questions among borrowers is whether it is possible to get a totally interest-free option. Unless you take the money from relatives and friends and they do not charge interest, there is no interest-free loan, but there are low interest options. See the options:
Why are interest charged?
When it comes to borrowing money from banks and lenders, however, there is no point in talking about a fully interest-free loan. That’s because when they lend money, institutions take a risk that repayment may not happen.
In addition, there is the so-called opportunity cost: the financial institution will be lending money that could have invested in some investment and for which it would be paid. Thus, the loan needs to pay you back so that it is worth not investing the money. Finally, we need to remember that there is inflation and today’s money will be worth less tomorrow, so its value needs to be “updated”.
With these factors in mind, it is possible to understand why it is difficult to get an interest-free loan. Nonetheless, it is possible to find low or low interest loans, which reduces the total amount to be paid. See below for the main options.
Loans with friends and relatives
The best known high interest-free loan is one made with relatives and friends. This is what happens when you ask someone you know for money, and when you pay you pay the same amount you ask. As loan sharking is a crime, this turns out to be a loan modality that is usually free of monthly increments.
This type of loan is usually granted to a few people, such as civil servants and INSS pensioners or retirees, but the mode is already growing in the private sector as well. Some institutions already work with the option for employees of private companies. By guaranteeing the direct payroll discount, the risk of default is lower and therefore interest rates tend to be lower than other options.
Online Personal Credit
Part of the interest charged by banks and institutions is usually due to the fact that they have to bear a whole structure. In the case of institutions offering personal credit online, this ceases to exist, which reduces costs. A more personalized and rigorous credit assessment also increases collateral for the company and thus lowers interest rates even more.
Both real estate and vehicle refinancing give as well as collateral for the loan. As the institution is assured that it will not be out of payment if you are late, the interest rates tend to be even lower than the payroll loan.
There are banks, private and private, that offer use of overdraft without interest for 10 to 15 days. This may be an option if you are expecting to receive salary or some income, for example. However, it is important not to exceed the credit deadline because, after the benefit expires, you are charged interest for every day that you used the overdraft and, knownly, the Check Especially it is one of the most expensive loans in the financial market.
Depending on your point of view, the credit card can also be seen as a form of high interest free loan as you make a purchase today and can pay back in a few days without paying fees. However, it is important to be very careful when using the credit card. If you fail to pay an invoice or only pay the minimum, the chance of getting into debt is great because it is the most expensive type of credit on the market, with interest exceeding 400% per year! Use the card with financial planning, already thinking of ways to save to pay the bill on time.
How to get a loan without high interest rates?
In order for you to have access to a high interest-free loan you need to be careful about choosing the institution and the credit assessment, which may end up being more stringent. In this regard, you need to choose the institution that offers the line of credit that best fits your financial needs.
For credit assessment, you should consider repaying or at least negotiating debts to convey security and reliability to the institution. If this is not possible, then you must provide a security as well so that the financial institution will not lose out if you do not make the loan repayment if you do not. refinancing.
Making simulations is also important, as is comparing different conditions. Sometimes a bank offers a lower interest rate, but also a shorter payment time, for example. Depending on how your budget is, this may not be the best option.