Empréstimos e Financiamentos is money borrowed from a financial institution (like a bank or NBFC) to help with big expenses like buying a new car or home. The borrower agrees to pay back the amount lent, with interest, over a predetermined period. Loans can be categorized as secured or unsecured. Secured loans require a guarantor or collateral, such as land, property or cash, to secure the debt. Unsecured loans don’t require a guarantor or any type of collateral, but may have higher interest rates than secured loans.
Financing 101: How to Choose the Right Loan for You
The most common types of loans include personal, auto, and mortgage loans. Other types of lending include lines of credit and business lines of credit. Loans are typically installment credit, which means you borrow a lump sum of money and repay it in equal payments over a set term. Other types of credit, such as a credit card or revolving credit, allow you to access funds at a set limit, use them, and then repay them (with interest).
When applying for a loan, lenders will want to know you have a source of income. They will also consider your debt-to-income ratio to determine if you can handle additional borrowing. To make repayments easier, you can set up a direct debit with the lender to take your monthly payments automatically from your account. You can also prepay your loans, which reduces the amount you owe and reduces your interest costs.