Difference between financing and Personal Credit
You've probably heard of some of the following terms: financing and personal credit, haven't you?
The same are actually quite common words in the vocabulary of those who are inserted, or at least research a little about the progress of the financial market.
However, for those who are not so used to them, it can be difficult to determine what their real difference is, in addition to the situations for which they are best indicated.
Therefore, if you are interested in knowing more details about it, it is recommended that you proceed with our brief explanation that we have prepared throughout this article.
Difference between financing and Personal Credit
So that you can know the real difference between these two well-known names in the financial market, we have prepared a brief explanation of how each one works.
So, check out some of its main features below.
Financing - What is it and how does it work?
At first, it is interesting to make it clear that financing is nothing more, nothing less than one of the main and most requested credits in the financial market.
The same is one of the main searches, when you want to buy something of high value, which are mainly: vehicles and real estate.
How it works is not difficult to understand.
Basically, you ask the bank for an amount and then prove through documents, bills and everything else that you are able to pay a debt of a certain amount.
If your request is approved, the bank will then transfer the amount to your account.
With this, you have a signed contract that proves that from a certain date, you will therefore have to pay the debt through installments.
The installments are obviously filled with interest and fees, which in many times can end up making your business not worth it.
Credit is so common that today practically all financial institutions offer the same.
Even digital banks offer credit.
An extremely important piece of information for us to make clear is that the good purchased is actually not entirely yours.
That is, until you pay off your debt with the institution, your car, case, or anything else, will not be completely yours.
However, this does not prevent you from enjoying what you are buying.
Personal Credit - What is it and how does it work?
Another name that is very present in the financial life of many people is personal credit.
The same as we can see by its name, it is a financial credit.
But what differentiates it from the others that the financial market offers?
At first, we must make it clear that since it is a credit guys, the use will only be intended for natural persons.
That is, holders of CPF, not CNPJ.
Since its use will be own, not a company.
However, the issue that really differentiates the credit in question from others is the need for collateral.
Which in this case is non-existent.
That is, in order for you to obtain a personal loan, it is not necessary that you present a guarantee to the institution, and then sell an asset to the institution.
An extremely important detail that we have to highlight about the credit in question is the CET.
The acronym, which means Total Effective Cost, is a very relevant detail when dealing with personal credit.
This is because it is not already determined, as we commonly see around.
In this case, there will be a variation.
Variation that in turn, goes according to two main factors, which are: financial institution interest rates and credit analysis.