It is easy to get carried away by loan advertisements that show very low interest rates. If you are in need of a little financial help, it is difficult to hold on to temptation, right? But what a lot of people don’t know – and that advertising almost never shows – is that, in fact, this is not the current fee you will pay. In addition to the interest we already know, some other fees are also charged and end up making the credit more expensive than we imagined. So, to be able to choose the best loan option for you, it is not enough to find the lowest interest. You need to know everything you have inside the service you are going to hire. And in this mission, we will help you now!
Nominal interest rate
This is the one we already know. The advertisements and websites of financial institutions disclose. As it can vary a lot according to the consumer’s profile and with the analysis of each creditor, starting your search for it is, yes, very important! But remember that this tariff is still free of taxes and other costs. In general, only when the offer is closed will the other values be incorporated.
Some institutions also charge a fee simply for you to register and be able to access the loan. So, when looking for the best deals, don’t forget to research about this possibility and put it on the scale too.
The IOF is the Tax on Financial Operations levied throughout the country. It’s the same for foreign exchange transactions, you know? In the case of loans, this rate is equivalent to 0.38% of the amount requested plus a rate on the day the offer was contracted. It is also important to know that the IOF is mandatory on any loan. So, in this case, there is no way to save, okay?
Some loans may include insurance that protects the customer in cases of unemployment or death, for example. This guarantee is super positive because it gives you strength in unforeseen circumstances, but it also makes the final value more expensive. So, before you even start looking for an ideal loan, think about what is most advantageous for you: take the risk and get a lower value or opt for insurance, but have to pay a little more. The important thing is always to choose with conscience!
But it’s a lot to research! So get hooked on this tip that will simplify your life: CET
The Total Effective Cost (CET) is exactly the sum of all these previous rates. It combines nominal interest with all costs of a credit operation, such as the IOF, registration fee and insurance – and also includes the administrative cost of the financial institution. The Cream Bank determines that the CET should always be informed to the consumer, but the downside is that this usually happens only at the time of signing the contract, so it becomes more complicated to compare loan offers using the rate that you will actually pay. If the creditor you found does not inform the Total Effective Cost right in the simulation, the tip is to try to research the rates separately, to be able to put everything on the scale and always make the best choice! The big secret to success in any financial transaction is to be patient and research the options! Each alternative is ideal for each person, so it is always very important to understand your situation and look for what suits you best.