Many people look for loans, either to pay off debts or realize a dream. One of the most sought after modalities is secured loan. However, it still raises doubts and fears for the customer. In this article we will explain what it is, how it works and what advantages and conditions you need to have to acquire a credit like this.
What is secured loan?
Although still little known, the loan with guarantee has been growing in Brazil. In this modality, as the name suggests, the applicant delivers some good to the financial institution, such as a real estate or car, as a guarantee that the loan will be paid. But do not worry, your good will continue with you, the only difference is that it will be in the name of the institution that lent you the money until the full payment of the loan.
Thus, if the client does not comply with the payment of the loan, the asset in question may be taken by the institution. In this way, the lender is guaranteed payment and is able to offer lower interest rates when compared to other types of loans.
The secured loan can be very attractive, but there are some conditions that should be considered as it is not suitable for all types of people. As there is a risk of losing the property or vehicle in case of non-compliance with the agreement, it is interesting to evaluate the risk and only request the loan if you are sure that you will be able to pay all the installments.
There are two types of secured loan: loan with property guarantee and loan with vehicle guarantee. Check below the conditions of each **:
Loan with Property as guarantee
Secured home loan can be a good option for those who need a higher amount of credit, longer term and low interest rates.
By giving the property as collateral, a third party company will evaluate its value. The maximum limit of the loan is 60% of the total value of the property. This rule exists to protect banks from defaulting, and applicants for a loan they can not afford.
Automobile loan as collateral
In the loan with guarantee of vehicle, car or motorcycle come as guarantee of payment. In this case, the vehicle must be in the name of the borrower and must be removed.
The loan amount is around 50% to 90% of the value of the vehicle, depending on the financial institution. With younger vehicles you usually get lower interest rates. You should also be aware of the year of the vehicle, as some institutions do not accept cars older than ten years. And just like the house, the vehicle will also undergo a survey to assess the value and if it is within the institution’s standards.
Myths and Truths about Secured Loan
There are a few unclarified facts that make it difficult to understand when closing the deal with the loan. Therefore, we have selected a few facts for you to know the truth and thus to take out the loan more safely.
- It is not possible to sell the property while it is used as collateral: you can sell your property during the period it is sold. But it is necessary to make this very clear with the buyer. Selling properties to financial institutions is a legal practice and can also be done under the supervision of a lawyer in order to ensure that everything is properly arranged. The loan will be paid normally, but the property can only be passed to the name of the new owner after the discharge of the credit.
- The property must be yours: you do not have to own a property to get this type of loan. However, you need someone who has a property and obviously agrees. The person who will enter as guarantor intervener, who transfers the property, also becomes liable for the loan. And to give away the property the person does not necessarily have to be related to you, the important thing is to be aware.
- Not all real estate or automobiles are accepted: it may vary according to your financial institution. Features such as model, year and brand can influence when making your loan. In the case of real estate, there are restrictions on some features such as square meters and the purpose of the property. Did you know that religious temples and hospitals can not be accepted as collateral? Well, before you begin to separate the documents to start the loan, check to see if your financial institution accepts your guarantee.
- You can only place the property as collateral in one loan at a time: the credit regulatory body, the Central Bank of Brazil, has certain provisions that aim to protect both clients and companies. Among these laws, one is that you can not place a property in more than one credit operation, to avoid defaults.
Advantages of secured loan compared to traditional loan
As the doubts about the secured loan are remedied, the demand for this type of loan grows. Among the reasons are the low costs in relation to the other types of loan, the speed in the granting of the credit and the term of payment.
- Minor interest
This is one of the main advantages of secured loan: the interest rate. The interest on these loans is less than in other modalities, because the bank is sure that it will receive. As a property is given as collateral, be it a real estate or vehicle, in case of default, the property is in the possession of the bank . The risk is low for the bank or financial institution.
- Anyone with the dirty name can request
Another attractive of secured loan is that the loan can be approved even for those who are negative. This is because it does not matter much the situation of the petitioner in credit restriction bodies such as Serasa and SPC, as long as a good is offered as collateral.