Clipping of news on Brazilian Culture, Law and Citizenship
07/29/2015
This article was translated by an automatic translation system, and was therefore not reviewed by people.
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The overdraft is one of the types of loans more expensive in Brazil and also the most dangerous. Besides being very easy to use line of credit - simply stick with the negative account that credit is released automatically - the interest charged can reach triple the amount initially contracted debt.
Thinkstock / Fergregory money bags: Bradesco is the bank that practices the lower interest rate on overdraft
What was bad is getting worse. In July, the overdraft interest rates reached their highest level since 1995. The average online rate reached 11.49% per month, according to the Defense Protection Foundation of the São Paulo Consumer (Procon-SP).
Although this average is enough to make a beautiful mess in your budget, depending on the bank where you keep your checking account disaster may be even higher.
According to the ranking of the Central Bank interest rate, the average rates of overdraft in the big banks range from 9.43% (Bradesco) to 13.96% per month (Santander).
This means that the contract a debt of 500 reais in Bradesco, one year after the customer pays 974.37 reais interest. Already in the bank with higher interest rates, Santander, interest paid on deadline for the same loan amount reach 1898.83 reais, a difference of 924.46 reais.
Check the table below, the fees charged by each bank and how much the customer pays in interest, using 500 actual overdraft limit and pay off the loan after one year.
Bank // Interest rate per month // Interest rate per annum // Interest paid after one year
Bradesco 9.43% // 194.80% // R$ 974.37
CEF 9.54% // 198.95% // R$ 992.25
Bank of Brazil 10.03% // 215.03% // R$ 1,074.36
Itaú 10.83% // 243.56% // R$ 1,217.35
HSBC 13.38% // 351.19% // R$ 1,756.36
Santander 13.96% // 379.98% // R$ 1,898.83
Source: Central Bank day period prescribed 30/06 to 06/07.
Careful
In most banks, customers already have a pre-approved overdraft limit. Thus, from the moment that the current account balance is zero, while spending the next dime the customer already starts to use your overdraft limit.
In some institutions, depending on the profile and customer credit history, the overdraft can be used for a few days without charging interest. But if the debt is not paid off within that period, interest is charged for the entire period for which the value was used.
So if the loan was really necessary and there is no other alternative, it is recommended to seek other cheaper credit lines.
One is consigned credit. According to May the Central Bank, the average rate of payroll for private companies to employees was 3% per month.
Payroll lending rates would tend to be much smaller because this line discounting the debt installments is done directly from the borrower's payroll, so the bank has more guarantees that you will receive the payment on time. Already in overdraft, no guarantee behind the loan.
IOF
Plus interest, transactions made with overdraft also suffer from the Tax on Financial Operations (IOF). This tax is levied on any use of the overdraft.
It is noteworthy that even between banks who give to charge interest on overdraft for a few days, the tax is nonetheless charged by the government, regardless of credit to the time period.
Recently, the government raised the IOF tax rate of 1.50% per annum to 3.00% per annum for loans held within 365 days. In addition, it would still be collecting the additional IOF rate, which discounts a fixed percentage of 0.38% of the value traded in each operation.
The calculation of the IOF was not included in the simulation because the incident rate is the same for all banks and the purpose of the survey was to show the difference in costs between the institutions.
Source: MSN
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This article was translated by an automatic translation system, and was therefore not reviewed by people.