Brazil is a country that has very high loan interest rates and taxes, which can create debt situations that are difficult to resolve. What if we tell you that your car parked in the garage could be a solution?
Just do a refinance. In order for you to understand the advantages of this option, we will explain how the interest rates on the secured vehicle loan work.
We know, after all, that among the countless forms of concession that exist on the market, refinancing is one of the most advantageous.
It can give you access to considerable amounts with a much more affordable fee for you to pay. It is not by chance that this option to obtain credit has been growing in the country. Find out below why it offers the best interest!
How does interest in the vehicle loan guarantee work?
Basically you will need to place your automobile as a guarantee of the payment of the contracted loan.
For the bank, divesting its property means greater security – this is because put simply, the institution is more confident that it will not default. After all, if the amount is not paid, the bank will take the vehicle.
It would serve to cover what the institution did not receive from the debtor. Because of this, companies lower interest rates, as they consider the transaction more secure.
In this way, you get more than 50% of the price of your car as a loan. The exact percentage will vary depending on the chosen financial institution. Another influencing factor is the age of the vehicle: the newer the better the rates and values.
Interest starts at just 1.50% per month
Thanks to the practices we described earlier, refinancing interest can start at 1.50% per month. In comparison, interest rates for personal credit in the country’s major banks varied between 4.33% and 5.91% in 2018. In January this year, the minimum rate reached 3.78% according to the Good Finance Bank.
The drop in interest rates also affects this modality, which already has better rates. That is why in most banks and fintechs it remains below 2%.
Knowing how the interest rate on the secured vehicle loan works, it is clear why it is advantageous. Today it is one of the best alternatives for those who want to escape the high-interest rates of the credit market.
The best alternative to high-interest rates
This form of borrowing is a hand in the wheel – no pun intended! – for those who can no longer bear the debts. You don’t even have to finance the entire value of the car, but just what you need.
It is because of all these advantages that more and more Brazilians use their cars as a guarantee in obtaining credit.
Want to refinance with low-interest rates? So take the time to visit our website
In this article, we check how the interest rate on the vehicle secured loan works. For a service specializing in secured vehicle and property loans or auto finance, visit our website.
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