All about Online Loans

Find out all about Online Loans and see where to apply without running any major risks

If you've ever been through a financial crisis or had something in mind but were short of cash, you've probably thought about taking out a loan to pay off your debts or even to boost that personal project. And taking out a loan can be the solution to many problems if you know where to look for it.

With the strengthening of the digital world, many online transaction options have emerged for things that we used to only be able to do in banks, institutions and other companies. And online lending is one of those options that has emerged and is becoming increasingly common.

An online loan is a type of financial arrangement in which a person, company or financial institution lends money to another party, with the expectation that the amount lent will be repaid within an agreed period, usually plus interest.

The main difference with traditional loans is convenience, as the entire process is conducted online, eliminating the need to visit physical branches.

Among the options available for online loans, there are four types that stand out: personal loans, payroll loans, loans with guarantees and FGTS advance loans. We'll talk about each of these options below.

Applying for a loan online is relatively simple. After choosing the modality you want, the process usually follows the steps of simulation, method of payment of the instalments, sending the proposal and necessary documents, credit analysis, electronic signature of the contract and, finally, the release of the credit.

There are advantages and disadvantages to online loans. The advantages include convenience, agility, transparency in interest rates and the disadvantages include the risk of fraud (if you don't take the necessary precautions), some high interest rates and others.

To clear up some of your doubts about online loans and guide you to good and reliable financial institutions, we've put together the main information you need to know before applying for a loan. Read on to find out more.

Online loans: what they are

A loan is a financial arrangement in which one person, company or financial institution lends money to another person, company or entity, with the expectation that the amount lent will be paid back within an agreed period, usually with interest.

Online loans follow a similar process to traditional loans. Banks and financial institutions that offer this service request information and documents from customers wishing to obtain a loan.

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This information is used to carry out a credit analysis, determine the approval of the application and establish the terms of the contract.

The amount is paid back in a similar way: the money is deposited in the customer's bank account, and they have to pay it back to the company with interest, following a previously agreed instalment plan.

However, the main difference with an online loan is convenience, since the entire process is conducted online, eliminating the need to physically visit bank branches or financial institutions. In addition, the interest on the loan amount is more transparent and easier to understand.

The loan application is completed in a matter of minutes, and the response on approval, as well as the deposit of the amount into the client's account, usually takes a few days.

For this reason, applying for a loan online is a less bureaucratic and more accessible option for those who need credit quickly.

Types of loans that can be taken out online

Before applying for a loan, it's important to be aware of various factors, including the types of loan that exist and which one best suits your profile. Remember that each type of loan can be more or less easy to obtain, depending on the profile of each applicant.

 Find out about the online loan options available:

Personal loans

When it comes to credit, personal loans are one of the most popular and widely used in Brazil. It serves a wide range of purposes, as it is not tied to a specific purpose and does not require collateral.

Online personal loans are by far the most widely available type of credit from banks, fintechs and other financial institutions. This type of loan offers money to customers without imposing restrictions on the use of the funds, and the borrower is not obliged to offer assets as collateral.

Payroll loans

Payroll loans are exclusive to certain groups of workers, including INSS retirees, pensioners, salaried employees, members of the armed forces and civil servants.

This type of loan involves the direct deduction of the instalments from your payroll, which can be your salary or INSS benefit.

Because of this, the conditions of a payroll loan vary according to the applicant's profile. People with higher incomes have access to larger loans, while those with lower incomes are limited to smaller amounts of credit.

Secured loan

Unlike a personal loan, in this modality the client provides an asset they own as collateral to the institution granting the credit. This asset is usually a property or a vehicle, but it can be any high-value item acceptable to the bank.

By using an own asset as collateral for a loan, the risk of the transaction is substantially reduced for the credit institution.

As a result, secured loans are more likely to be approved than personal loans. It also offers lower interest rates and longer payment terms.

Anticipation of FGTS

As of 2019, workers who are currently employed under the CLT (Consolidation of Labour Laws) regime or who have already worked under this regime have the option of choosing the Anniversary Withdrawal as the method of accessing funds from the Severance Indemnity Fund (FGTS).

This modality allows workers to withdraw part of their available balance every year, in the month of their birthday.

Many banks and financial institutions offer loans in the form of FGTS advances. In other words, workers can receive advances of the amount corresponding to a few instalments of the Anniversary Draw before their anniversary date.

Advantages

• Convenience: You can apply for loans at any time, without having to visit a branch.
• Agility: The approval process is usually quicker than at traditional banks.
• Transparency: Interest rates and loan terms are usually clearly presented.
• Various options: There are many financial institutions and fintechs that offer loans online, allowing consumers to compare and choose the best option.

Disadvantages

• Higher interest rates: some online loans tend to have higher interest rates than traditional bank loans.
• Fraud risksBecause transactions are made over the internet, it's important to be careful to avoid fraud and scams.
• Excessive debt: Easy access to credit online can lead people to get into debt beyond their means.

How to take out loans online

Applying for a loan online is quite easy. First of all, you need to choose which type is right for you: personal, payroll, secured or FGTS advance. Once you've done that, the process is usually the same for all banks and financial institutions that offer the option of applying online.

Generally, just follow the steps below:

1. Make a loan simulation, choosing the amount you want, the number of instalments you prefer and the date the first instalment is due.
2. Choose the method of payment for the instalments, be it by boleto, automatic debit from your bank account, among others.
3. Send the proposal and provide the required documents to the financial institution.
4. The bank or institution assesses the proposal and analyses your financial history.
5. If the loan application is approved, you sign the contract electronically and the amount is deposited in your bank account within the established timeframe.

You can carry out simulations with several different financial institutions and banks to choose the one that offers the best conditions in terms of interest rates and payment methods.

Once the proposal has been sent, approval or rejection is usually determined within a few days, as is the deposit of the amount into your account.

It is essential to thoroughly review all the data and documents requested before submitting the proposal, in order to avoid problems with approving the loan or receiving the credit.

Care to be taken

• Research the interest rates and terms of various lenders.
• Read the conditions of the contract carefully, including the fine print.
• Make sure you're dealing with legitimate financial institutions or fintechs.
• Avoid sharing personal information on non-secure sites.
• Borrow only from institutions and companies authorised by the Central Bank (Bacen).
• Don't make payments to secure your credit.

Loan comparator

A loan comparator is an online service or tool that allows consumers to compare various loan options offered by different financial institutions, such as banks, credit unions, fintechs and other lending companies.

The main purpose of a loan comparator is to help people make informed decisions and find the loan that best meets their financial needs.

Among the main advantages of using a loan comparator are the following functionalities:

• Comparison of interest rates;
• Calculation of instalments, making it possible to calculate the amount to be paid based on the loan amount and the payment period.
• Loan details such as terms, requirements and conditions.
• Comparison of total effective cost (CET), such as rate and insurance analyses.
• Ratings and comments, with other users' opinions about the institutions.

Among the online comparators available, one that stands out the most is Finanzero. Check out more details about it.

Finanzero

FinanZero is a fintech that provides a credit search platform, collaborating with more than 60 partner financial institutions to make loan options available to a variety of financial profiles, including those who may be in default.

By registering with FinanZero, you can analyse up to 10 loan proposals in just 5 minutes and choose the one that best suits your financial situation. However, it is essential to note that the interest rates offered by the search engine start at:

• 0.75% for property refinancing;
• 0.99% for vehicle refinancing;
• 1,59% for personal loans.

05 best apps to apply for a loan online

There are several apps and institutions on the market that offer online loans, and we've put together five options for you to get to know:

Geru

The loan offered by Geru is completely digital, covering the entire process, from the initial simulation to actually taking out the loan. The company's main objective is to carry out credit assessments in an agile manner and, if approved, the amount requested is made available within 1 working day.

Ideal Profile: Civil servants; wage earners; pensioners.

ProsNo guarantee required; 100% online; transparent analysis; fast approval and release.

AgainstTo make simulations, you need to enter your personal details.

Interest rates: from 2.0% p.m. / CET: from 26.82% to 157.47% p.a.

Valuesfrom R$ 1,000.00 to R$ 50,000.00

Payment termfrom 12 to 36 months

Release deadlinefrom 1 day (after credit analysis)

Meutudo

MeuTudo is an online loan company that operates in compliance with the regulations established by the Central Bank. It offers a variety of credit options, including payroll loans, portability and birthday loot.

Ideal Profile: Low score; negatives; pensioners.

ProsNo enquiries with protection agencies; extended payment period; credit released in 2 to 9 working days; lower than average rates; 100% digital.

AgainstNot available to everyone; subject to a consignable margin; compromises part of the income and is deducted from the payroll.

Interest rates: from 1.69% p.m. / CET: from 1.69% p.a.

Values: flexible

Payment termfrom 6 to 84 months

Release deadlinefrom 2 to 9 days (no credit analysis required)

NoVerde

NoVerde is a correspondent banking company that collaborates with various financial institutions. Its loan service is completely online and the approved amount can be credited to the client's account within 24 working hours.

Ideal Profile: Low score; salaried; self-employed.

Pros: money released in 1 working day; 100% online; quick analysis in a few minutes.

Againstlow credit limits; app only available for android.

Interest rates: from 7.90% to 18.90% p.m.

Valuesfrom R$ 500.00 to R$ 8,000.00

Payment termfrom 3 to 18 months

Release deadlinefrom 1 day (after credit analysis)

Jeitto

Jeitto offers loans to users of its platform with affordable payment terms and quick release of funds.

In addition to the credit itself, the company also offers additional functionalities through its app, allowing the payment of water, electricity and gas bills, as well as facilitating online purchases over the internet.

Ideal Profile: public servant; low score; negative; salaried; self-employed; pensioner.

Pros: instant credit release; 100% online; negatives accepted.

Against: no fees; for more benefits you need to be a client of the institution.

Interest rates: does not publicise

Valuesfrom R$ 35.00 to R$ 300.00

Payment termup to 16 months

Release deadline: from 1 day (no credit analysis required)

Loan Yes

Sim is a platform belonging to the Santander Group that operates exclusively online. It offers personal loans with a limit of up to R$30,000, and the credit analysis can usually be completed in a few minutes.

Ideal Profile: civil servant; employee; self-employed; pensioner.

Prostransparency of information; payments via boleto or account debit; the Sim app can be used to apply for and manage the loan; attractive interest rates.

Against: does not inform the total effective cost.

Interest rates: from 1.20% p.m. / CET: from 15.39% to 314.51% p.a.

Valuesfrom R$ 500.00 to R$ 30,000.00

Payment termfrom 1 to 36 months

Release deadlinefrom 1 day (after credit analysis)

Bonus tip: Creditas

Creditas works with a secured loan, which is a type of loan with property as collateral, offering substantial credit limits and more advantageous interest rates.

This is because, as the name suggests, the property is used as collateral, reducing the risk of default for the financial institution.

Ideal Profile: civil servant; wage earner; property owner

ProsIt is possible to offer a property that has not yet been paid off; low rates; 100% online; long terms.

AgainstFor higher amounts, there is more bureaucracy, and the time it takes to be released is also longer.

Interest rates: from 0.99% p.m.

Valuesfrom R$ 50,000.00 to R$ 3,000,000.00

Payment termfrom 60 to 240 months

Release deadline: not disclosed

Is it worth applying for a loan online?

In short, an online loan is an accessible and convenient alternative for those looking for credit, with the possibility of comparing offers and choosing the best option to meet financial needs.

Remember that before applying for an online loan, it's important to assess your financial situation and determine whether you really need the loan. In addition, it is essential to ensure that you have the capacity to pay in order to avoid future financial problems.

Taking out an online loan is worthwhile, but before taking on such a huge responsibility you should always be aware of your financial reality and calculate the pros and cons, so that today's problem doesn't get bigger tomorrow.

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