When looking for financing for an expense, it's natural to find references to consumer credit and personal credit. Although the terms are related, they don't mean exactly the same thing.

"Consumption credit is a financing category for individual consumers, covering different credit modalities. Personal credit, in turn, is one of these modalities."

This distinction is important because financing conditions, allowed purposes, terms, and charges may vary depending on the product contracted. Therefore, before proceeding, it's advisable to understand what options are available and which may best suit your needs.

What is consumer credit?

Consumer credit generally covers different forms of financing granted to individuals for expenses not falling under housing credit. It can be used, for example, to buy a car, finance an unexpected expense, or purchase goods and services.

Among the covered types are:

Personal loan: financing that may have a specific purpose or allow different uses, depending on the contract.

Car car loan: financing associated with the purchase of a vehicle, with conditions varying according to the product.

Revolving credit: a type of credit where there is a credit limit that can be reused as the amounts used are repaid, according to the contracted conditions.

Credit through cards or other financing lines: solutions that allow making payments or using credit up to a certain limit.

Each type has its own features. The interest rate, repayment term, fees, and usage conditions should be analyzed before signing up.

What is personal credit?

Personal loan is a consumer credit type that allows financing for different needs, according to the purpose and conditions set in the contract.

Can be used, for example, to fund home improvements, education expenses, treatments, equipment or other personal expenses. There are also personal credit products intended for specific purposes, so it is important to check the terms of use of the amount.

One of the advantages of this type of financing is allowing a expense to be spread over several monthly installments, instead of bearing the entire burden at once. However, this option involves costs and should be considered taking into account the family budget and repayment capacity.

Before hiring, compare the conditions of different proposals and confirm the total amount you will have to pay.

What are the main differences between consumer credit and personal credit?

The fundamental difference lies in the meaning of the concepts: consumer credit is the general category, while personal credit is one of its modalities.

In practice, when looking for financing, the comparison should be made between the concrete products available for your situation.

For example, if you want to fund a renovation, you can find personal loan offers and specific solutions for construction. If you want to buy a car, you can compare car loans with personal loans, when the latter can be used for this purpose.

The most suitable option depends on the amount needed, the use of the money, the desired term, and the conditions of each proposal.

What to compare before taking a loan?

Regardless of the chosen modality, do not evaluate a proposal only by the monthly payment value. There are other indicators that help understand the real cost of the financing.

TAEG: represents the annual cost of credit, including interest and fees considered in its calculation. It is one of the main indicators to compare offers, provided they have comparable characteristics.

MTIC: refers to the total amount charged to the consumer, that is, the total they will have to pay over the contract, under the presented conditions.

Refund period: a longer period can reduce the monthly payment, but also increase the total financing cost.

Fees and insurance: confirm applicable charges and understand which are mandatory for the presented proposal and which are optional.

Purpose of financing: check if the product allows financing the expense you want to make and if there are specific conditions associated with its use.

Early reimbursement conditions: find out about the rules and possible charges applicable if you intend to settle the loan before the scheduled time.

Compare proposals for the same amount and term whenever possible. This way, it will be easier to evaluate the differences between the costs and conditions of each solution.

How to choose the most suitable financing for your needs?

Before applying for a loan, start by defining how much you need to finance and what monthly payment you can afford without affecting other expenses.

Afterward, identify the options that allow you to fund the desired expense and compare the available conditions. In addition to interest rates and fees, consider the stability of your income, the credits you already have, and the financial margin you have to deal with unexpected situations.

It is equally important not to confuse the possibility of obtaining financing with the guarantee of approval. The financial institution must assess the consumer's solvability before granting credit, and approval depends on this analysis.

If you are unsure which is the most suitable type, a personalized analysis can help identify the solutions to consider and compare their conditions.

Simulate your personal loan

Need financing for an expense and want to know which options suit your needs? Make a free and non-binding simulation to receive a personalized analysis and discover the financing solutions you can evaluate.

Hire new financing

FAQ

Is personal credit a consumer credit?

Yes. Personal credit is one of the modalities covered by the consumer credit category. Conditions vary according to the product and financial institution.

Does consumer credit always have a specific purpose?

No. Some types are intended for a specific purpose, while others allow funding different expenses. You must confirm the conditions outlined in the contract before using the amount.

What is the difference between personal loan and car loan?

Both can fall under consumer credit, but they correspond to different products. Auto credit is associated with vehicle financing and may have specific conditions. Personal credit may allow financing the purchase of a vehicle, depending on the contract. The comparison should consider the total cost and other conditions.

How do I know which loan is the cheapest?

Compare the TAEG and the MTIC, considering proposals with the same amount and term. Also analyze fees, insurance, and contractual conditions. A lower monthly payment does not necessarily mean a lower total cost.

Can I apply for a personal loan if I already have other loans?

Depends on your financial situation and the institution's assessment. Factors considered include income, expenses, existing credit commitments, and ability to meet new payments.

Did you enjoy reading? Share it!