Lower interest rate on loan: how to analyze and choose!

Do you want to take out a loan and are looking for the lowest interest rate ? It is necessary to understand well what must be analyzed to arrive at the best option before accepting any offer. Knowing this, we created this article with the proposal to show which items are relevant for you to find the lowest interest rate for your loan.
Follow our tips!

1. Loan terms

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The choice of the correct modality is fundamental to obtain the lowest interest rate, and should be the first item to be defined.
The personal loan (whether payroll deductible or not) is a good option, but there are several lines geared towards specific purposes, such as credit for vehicle purchases.
So, the order is to research well to find the right modality for you!
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2. Warranties

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Another key factor in finding the lowest interest rate is to look for modalities with a greater degree of security for the institution that will provide the credit.
The guarantee is one of the points evaluated by banks to price their products: the higher, the lower the interest.
That is why financing tends to be cheaper than loans.
It is also possible to find options such as the payroll loan. As the installments are deducted directly from the payroll, the guarantee for banks is greater. It is not for nothing, therefore, that the credit line is one of the most accessible.
The payroll is not available to all audiences. It is aimed at:

  • retirees and pensioners (in this case, with even lower interest rates);
  • public servants;
  • employees of private companies that enter into agreements with banks (which normally only occurs with larger ones).

3. Relationship with financial institutions

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Many banks offer, among other advantages, discounts on interest rates for customers with better relationships.
As regards the age of the account and the existence of investments or products contracted with the institution, they can influence the relationship level. Another determining factor is the payment history of previous loans.
Even with the discount offered by your bank, it is worth watching and comparing the options available on the market.

4. Salary and credit portability

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Whoever receives salary for a certain financial institution has more advantages when it comes to taking out a loan with it.
In fact, since the Free Banking Option became law, allowing public servants to choose where to receive their payments, the lower interest rates have been one of the main attractions for account holders to migrate from one bank to another.
For those who already have a loan, credit portability has a similar function and can be interesting.
It is the possibility of transferring, on the initiative of the client, a loan (or other credit operation) from one bank to another. With that, it is likely to get a lower interest rate, negotiating directly with the destination institution.

5. Institutions with lower interest rates

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Whether among more traditional financial institutions or more recent ones, such as fintechs , there is always a chance of getting a lower interest rate through research. In online credit, it is easier to compare rates because the process is more agile. But take it easy, because not all companies in the segment work with the same level of interest. The same goes for banks.

Such institutions adopted a policy of reducing interest rates within a government strategy to heat up the market. Currently, the situation is no longer the same. It is possible to find interest rates as affordable or even lower in private banks. So, before applying for a loan , do some research until you find the best option. If you look at the factors we discussed in this article, you will be able to find the lowest interest rate and make the best deal. Do not forget, however, to evaluate the CET (Total Effective Cost) of the operation, as there are other aspects that influence the cost of the loan.