Do you want to understand how to access borrowed money? So you are in the right place. In this article, you will find out which are the safest options and the necessary precautions to obtain a loan. Follow along!
Who has never despaired about the bills arriving and the bank account decreasing? This not only happens with recurring costs, but also when there is an emergency and unexpected situation. At these times, borrowing money may be necessary to avoid getting into debt and having a bad name.
If someone in your family is having health problems, if your car breaks down, if you are suddenly laid off and don’t have an emergency fund to help you in this time of financial turbulence, borrowing money can really become essential.
The good news is that it is possible to access this necessary amount safely. But, to prevent the debt from snowballing, you must choose a resource that you can pay off later and take some care when borrowing money.
When to borrow money?
This type of resource can help in countless situations. But, there are some specific cases where borrowing money may be the only quick solution. Check out:
- Emergencies: people often use their pre-approved overdraft limit or credit card revolving limit to be able to cover the costs of an emergency. However, these are quite expensive options. The interest rates are very high and it is cheaper to research other loan lines that fit your budget.
- Pay off debts: although the money borrowed represents a new debt, you can opt for a line that is cheaper than the rates paid on other debts. Furthermore, it’s a chance to concentrate different values into one, dealing with just one interest rate and one institution.
- Personal dreams and projects: if you can no longer postpone your plans due to lack of capital, this could be a good opportunity to get them off the ground. It could be the chance to take that dream trip, pay for an expensive course, renovate your home and even open a business.
Loan for negative people
Even with restrictions, it is still possible to take out a loan with a bad name. However, it is necessary to be very careful when trying to borrow money in this situation, as the person will be more subject to abusive rates and fraud. In this case, the possibilities are the payroll loan , in which the installments are deducted directly from the salary, or the secured loan, a type of credit in which it is possible to place the vehicle or property as collateral and sell the asset to the financial institution.
How to borrow money? 6 safe ways
There are some possible ways to borrow money without taking risks or paying very high interest rates. It is essential to compare rates and payment conditions in general to avoid paying expensive installments, with abusive interest rates.
Often, a modality seems attractive because of the ease with which you get the money, but you end up taking on debt with exorbitant installments.
Check out six possibilities for borrowing money below:
1. Payroll loan
The payroll loan is aimed at public employees and private companies, as well as INSS beneficiaries. In this type of money loan, the monthly installment amount is deducted directly from the payroll.
This type of credit has low rates, as it uses salary income as guarantee for the operation. Therefore, the institution understands that the risk of default is lower and offers better payment conditions.
2. Personal loan
The personal loan is intended only for Individuals and is usually used to request small amounts, to be paid in a few months.
The process of getting the money to borrow is usually quick as it does not involve many procedures and requirements. If approved, the amount is released into your current account within a few days.
However, this type of credit has one of the most expensive interest rates on the market. Therefore, although it is quick to obtain, the final price of the loan may not be advantageous. The ideal, then, if you choose to borrow money in this modality, is to pay off the debt as quickly as possible.
3. Secured loan
The secured loan offers payment terms outside the market average. Interest rates are lower and terms are longer. This is because when placing an asset as collateral for paying off a loan, the risk of default decreases. Therefore, the interest rates for this modality are among the most advantageous on the market.
To have access, payment must be guaranteed to the institution through a guarantee, a property, a car or even a salary. The property itself remains in fiduciary alienation. In other words, linked to the institution as a guarantee of payment of the money loan contract. But the owner of the asset can continue to use it as they wish.
In this situation, the company has more security that it will be paid and, therefore, is able to offer the lowest rates and long terms. Furthermore, you have access to high amounts. However, this value varies depending on the value of the property or vehicle and how much your income is already committed to debt.
It is recommended precisely for those who need to borrow money, whether to exchange expensive debts for a cheaper one, or to fulfill big dreams, such as renovating their house, studying and even traveling.
4. Anticipation of the 13th
In this situation, you immediately receive your thirteenth salary from the banks, but you are charged interest for it. In other words, it works like a loan. However, the amount will vary according to the rules of each bank – generally the limit is around 80% of the total. It is very useful if you need to pay for an item in cash, for example, and if the fees charged are lower than those for installments. Not to mention that anticipation can solve unexpected situations for which you don’t have the money.
But remember that at the end of the year you won’t have that amount to spend. And, be careful, even if the 13th is not paid by the date stipulated in the contract, the bank will discount the amount within the deadline. Therefore, plan and organize your finances to be able to live without this installment in the following months and, especially, if the company you work for does not deposit it on time.
5. Income Tax Advance
You can also request an advance on your IR refund. For this, there is a type of loan at the bank, which usually has low rates. Many people request it in order to exchange a high-interest debt for a cheaper one. For example, it’s a chance to borrow money to get rid of your overdraft and revolving card.
However, most of the time, the amount is automatically debited by the bank when the refund enters your current account. So, if you don’t have enough balance in your account, this can generate new debt and further disrupt your finances.
If the taxpayer corrects the declaration, the tax total is also modified. However, the institution considers the value at the time of taking out the credit. Therefore, if the refund is later lower, you will have to pay the additional costs.
6. Friends or family
It can be more complicated to borrow money from people close to you than from a financial institution. It often becomes an embarrassing situation for both those who request and those who lend.
It becomes more difficult to charge another person if you are intimate with them and don’t have a document formalizing the transaction. To avoid embarrassment, defaults and the end of friendships, the ideal is to formalize everything in a contract, no matter how well you already know each other. You can also request a guarantee of payment, such as a check or promissory note.
This way, both parties are safe. After all, no one wants to lose the relationship they have, right? Not to mention that, if the money also belongs to other members of your family, it is important to consult them before lending.