When it's time to solve an emergency situation, pay off a debt, rebuild the house, it is common to wonder which credit option is best: personal loan or financing?
In this post we'll show you the differences between these types of credit and how to choose the best one for you.
What is a personal loan?
It is a form of credit that does not require collateral for its use. In other words, you apply for the amount and use it as you see fit.
The only commitment that you will have in this credit option is the payment of the installments, with the addition of interest on all the dates agreed upon in the contract.
As the name implies, the personal loan is intended for individuals. The money is deposited in your account within one business day.
At Click Cash it takes only a few minutes to apply for a loan. Just download our app and enter the desired amount, choose the installment options, and fill in your registration information.
What are the benefits of a personal loan?
Fast credit release
In a few steps on our app, you can have your credit application approved and the money in your account within one business day.
Better than overdrafts
A personal loan is usually cheaper than overdrafts, which have daily interest rates and can increase your debt exponentially in a short time.
A personal loan is ideal to help you in cases of emergency, where money makes a difference in the outcome.
Disadvantages of a personal loan
Lack of planning
Borrowing money without planning your expenses can be a bad business for you. In the end, you may pay more charges and taxes than you actually needed.
Applying for a personal loan on impulse is not a good idea. You may hurt your budget and spend the money on non-essentials.
Loan interest rates are usually higher since no collateral is required from the applicant.
What is financing?
To apply for a financing, it is necessary to explain what the money will be used for. It can be for buying equipment, cars, real estate, etc. The reason must be clear at the moment of contracting the credit.
In general, financing involves higher amounts than personal loans, so approval can be more bureaucratic.
What are the advantages of financing?
Delays in approval
Several documents are required to approve the credit. Any failure or error in submitting the paperwork can delay the deal and increase the time it takes to acquire financing.
Justify the reason for applying for credit
Limit the use of credit only to the action justified in the contract with the financial institution.
Risk of losing the good
If you do not pay the installments on time, you run the risk of returning the purchased asset to pay off the debts accumulated with the contracted financial institution.
Main differences between personal loans and financing
Understanding the differences between these credit options helps you choose the best one according to your needs.
Because they have a limited purpose, interest rates are lower for financing compared to personal loans. However, a personal loan can be worth it for you if you do not want to put up property as collateral.
This is the biggest difference between a loan and a mortgage. While a personal loan can be used for anything, financing needs a purpose that has already been defined and agreed with the financial institution.
Related to the bureaucracy involved, financing can take longer. So, the personal loan can be more practical. It all depends on your needs.
After all, which one is best?
It depends on your needs. If you know exactly why and how much money you will need, it is easier to compare the credit options and choose the one that best fits your pocket.
Se o seu objetivo é dinheiro rápido e seguro para pagar uma conta, dívida ou reforma, baixe o aplicativo disponível na Play Store e faça uma simulação agora!