Many Brazilians end up acquiring payroll loans without knowing what their characteristics are, their costs, how much they will owe or if it really is something that makes sense and can help in financial life.
In today’s article we will talk about what points you should know when deciding whether or not to hire payroll loans.
What is a payroll loan?
The payroll loan is a very common type of credit and has different characteristics from the normal loan provided by banks.
This modality is considered one of the cheapest in the market and can be obtained by public employees, from a private company (those with a formal contract) and also retirees and Social Security pensioners.
Where is the loan discounted from?
For public servants or employees of private companies, the discount is straight from the payroll, that is, from the salary. For retirees and pensioners from Social Security, the discount is directly from the benefit.
How do the monthly installments work?
A person can hire a maximum of 30% of the salary, it is the highest percentage that he can be committed, remembering that this percentage is on top of your salary that is really free for you to use and not the gross amount that is stated on your payroll or for your benefit.
Let’s show a practical example, an employee of a private company earns $ 1200.00 dollars per month went to acquire a payroll loan.
In this, he will have to divide the new debt into monthly installments of up to 360 dollars which are the respective 30% and which will be deducted from his payroll automatically until he completes all payment of the amount due.
People need to remember that they cannot count the value of the installment until the payroll credit runs out. This can lead to uncontrolled financial life and make this credit a bad thing.
So in the example we gave here, the person who hired the credit now will only have $ 840.00 per month for the rest of their accounts.
What does nobody tell you?
What few people know is that they can have more than one payroll loan and from different institutions, but the total value of the installments cannot just exceed the predetermined percentage of 30% of the salary.
When it comes to interest rates on loans, credit cards, overdrafts, etc., they tend to be quite high, which is different in payroll loans. So it is much cheaper to have this credit which is a good strategy to carry out the smart exchange of expensive debts for cheap debts.
Payroll credit interest is charged in an annual format, when we convert to find out what the monthly rate is, it is around 2% per month, which is around 26.82% per year. Recalling that the overdraft and credit card exceed rate of 300% per year.
An important point to note is that the rates are even lower for civil servants and Social Security pensioners. That’s because their credit risk is less than that of an employee of a private company.
In the event of dismissal, the company may deduct up to 30% of the termination amount to write off the loan. But if that is not enough, you will have to repay the loan or renegotiate that debt since you no longer have a payroll but a debt.
How to hire?
To have access to payroll loans, the company you work for must have the payroll made by an institution that offers payroll loans.
Then you can call the bank where you receive your salary and ask if there is this possibility of taking out payroll loans. Remember that there is a partnership between the bank and the company, so when you make payroll loans, the company is aware.
In general, in case of a positive score, it is not necessary to have a long time in the company, if your score is bad, there is the possibility of the institution requesting a minimum period to provide the credit, such as around five months .
An important information is that people with a negative name can also apply for payroll deductible loans
When is it charged?
The installments are charged monthly and as soon as the contract is made, the custom is that the first installment will be charged on the next receipt of salary or benefit. The benefit amount falls into your account and then you have the monthly installments to settle.
It is extremely important to remember that having an emergency reserve would mean that you do not have to purchase payroll loans or other types of loans.
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