Loan or Credit Card: What is the Best Payroll Loan Modality for You?

28 Nov

If you are retired, INSS pensioner or civil servant, the payroll loan option is quite attractive. Among its main advantages are lower interest rates and less paperwork for hiring.

But in addition to the traditional loan, where money is deposited in your account, payroll-deductible credit has the possibility of purchasing a credit card. If you are interested and want to know more about this service, check out the differences and advantages of the loan and payroll credit card.

What is payroll loans?

What is payroll loans?

Payroll-deductible credit is the modality in which monthly installments are linked to the INSS salary or benefit. Because of this assurance that payment will be automatic and on time, banks may offer lower interest rates.

The payroll-deductible credit card follows the same logic: the minimum invoice amount is deducted directly from paycheck every month.

What is the limit?

What is the limit?

 

By law, the overall allowable margin allowed is 35% of total income, with 30% devoted to loans and 5% to credit cards. It is also worth remembering that, within this percentage, the institution to which your benefit or income is linked may determine the loan’s own limit.

What are the interest rates?

What are the interest rates?

 

Fees may also vary from institution to institution, but compared to conventional credit cards that are available on the market, payroll-deductible credit cards have much lower and advantageous interest rates.

For retirees and pensioners, the interest rate cap is 3% per month, and 3.5% for civil servants. In addition to lower interest rates, payroll-deductible credit cards have no annual fee.

Can I borrow and credit card together?

Can I borrow and credit card together?

 

Yes, provided that together they do not exceed the payable margin of 35% of your monthly income. By law, this is the limit a person can compromise on the benefit to pay the installments.

If you are interested in the payroll-deductible credit card and want to seek the service, check out this post who is entitled and how to contract this service.

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