Simulating a payroll loan: where to do it?

Currently, there is no shortage of options for those who want to take out a loan – whether personal or consigned. But where can I simulate a payroll loan?

Almost all banks and financial institutions offer this service. To help you make this important decision, simulators are always available for those who want to do their calculations before deciding whether to apply for a loan.

Want to learn more about how this service works? In this article, we'll explain! Throughout the text, we'll cover the following topics:

• What is a payroll loan?
• Who can apply for this loan model?
• Why are interest rates lower?
• How these simulations work
• Where to simulate a payroll loan
• Simulation in other banks
• Advantages and disadvantages of consignment
• Who is this type of loan suitable for?
• Conclusion

What is a payroll loan?

When it comes to loans, this might be the first option that comes to mind for many people. In this type of credit, the customer borrows the requested amount from the financial institution, and the installments are automatically debited from their paycheck.

A great alternative for those in need of cash, this credit model is famous for its fixed installments and lower interest rates.

Who can apply for this loan model?

Despite the advantage of being a loan with lower interest rates than other types on the market, the payroll loan is exclusive to:

• retirees;
• INSS pensioners;
• public servants.

This means that, despite the advantages, the payroll loan is not an option available to most Brazilians.

Why are interest rates lower?

Due to the payment method of this loan model, the monthly installments are paid automatically, deducted directly from payroll. The bank understands that the risk of default is lower, resulting in lower interest rates.

How do these simulations work?

Like almost every credit service, the payroll loan also offers the option for the customer to run simulations before taking out the loan.

Through these, you can view information about the loan. This step is important because it helps you get a sense of the payment and interest rates applied to the loan.

Where can I simulate a payroll loan?

If you fall into any of the groups mentioned above and need cash, you have a good chance of getting a payroll loan. However, before applying, it may be a good idea to run some loan simulations.

A great alternative is the Central Bank's official website. Open to everyone, site allows that you calculate the monthly installment amount depending on the amount you intend to borrow.

Enter the number of months you wish to repay your loan. Also, enter the amount to be financed and the monthly interest rate. Since, in this example, you want to know the installment amount, the "installment amount" field will be blank. By clicking "calculate," the simulator will give you the result.

For example:

If you want to borrow R$ 10 thousand and want to pay this amount in 3 years (36 months) with an interest rate of 2% per month, the installment amount will be R$ 392.33, approximately

Please note: Since the Banco Centra website does not take into account the Total Effective Cost (CET), the rates shown may vary slightly. Interest rates may also vary depending on the customer's relationship with the bank.

Simulation in other banks

In addition to the Central Bank, you can also run your simulation directly at your current financial institution, such as Santander, Itaú, Bradesco, and Banco do Brasil. To learn more, visit their respective websites.

An important piece of information is that the banks mentioned offer the simulation service only to their current account customers.

For customers of other banks, we recommend obtaining more information directly from the nearest bank branches.

Fintechs like Nubank and Neon are a great alternative. Because they operate online, access is faster and more dynamic.

Advantages and disadvantages of payroll loans

While low interest rates and long repayment terms are compelling advantages when opting for this line of credit, it's important to consider the disadvantages. One is that, by obtaining this loan, your salary or benefit will be up to 35% lower each month until the loan is fully repaid, as the deduction is made directly from your payroll.

For example:

If the value of your benefit is R$ 1,500, the value drops to approximately R$ 975, since approximately 35% of the value (R$ 525) is automatically discounted.

Since this amount can make a significant difference to your monthly budget, this factor should be taken into consideration before opting for this line of credit. Is it feasible to commit this amount every month until the end of the payment?

Who is the payroll loan suitable for?

Like any other type of financial service, a payroll loan isn't the best credit model for all situations. Opting for a payroll loan is recommended in the following cases:

To pay off debts with higher interest rates, such as credit cards and overdrafts, for example.

Since the interest on a loan is lower than those of these two options, paying with the borrowed amount can be a good option, as you'll be getting rid of a larger debt and taking on a smaller one.

In that case, it might be worth it.

Another suggestion is to use the money to pay off more urgent debts, which cannot be ignored because, by not paying the amount, the individual could get into serious trouble.

In this example, we have: house/apartment financing payments, water and electricity bills, condominium fees, car payments... These are debts that cannot be postponed.

Conclusion

As we can see, a payroll loan is an interesting option for many situations, and a great solution for those who are in debt and looking for a solution.

However, before deciding on this line of credit model, carefully consider the pros and cons, do extensive research, and run several simulations. Only then will you find the most viable option for you!

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