Clipping of news on Brazilian Culture, Law and Citizenship
01/19/2015
This article was translated by an automatic translation system, and was therefore not reviewed by people.
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When we hire a financial service where compound interest will be charged, the exponential multiplication of debt can become absurdly expensive, constituting true enrichment for those who lent money and bitter impoverishment for those who paid that debt.
Compound interest, also called capitalized, are one type of interest that "flow from own interest", ie focus not only on the principal and fixed value of the debt, but also on the interest that had already been counted in the outstanding balance, day by day, month by month, year by year, and so on.
It is interesting to see how they work: R$ 100.00 borrowed a capitalized interest rate of 10% per month at the end of one year loan will incur a debt of R$ 313.00, equivalent to 214% of the amount originally borrowed.
If the loan of R$ 100.00 last for five years, so will be due approximately R$ 30,000.00 to the lender, that is 30348%.
It is worth checking, it is not a typo, the percentage is 30 348% right!
Calculating, for example, millions of Brazilians use the banking overdraft or financing the credit card - some of the financial products via computed capitalized balance due, it is evident the imbalance generated in the economy citizenship under this excessive support given to institutions financial.
Between the decades 80/90, when there was hyperinflation - inflation of over 60% per month, coming in 1989 so far as to reach 1782.9% per year - that remote time there might be some justification for banks offering money to work capitalized interest because that would be how to protect themselves from risk.
However, since 1996 inflation remains at about 1% (one percent) per month, hence there is no more justification for the unconscionability of compound interest, especially in the case of banks which, coincidentally, are increasingly profitable and billionaires, even in global economic times, as demonstrated by the president of the higher Court (STF) to provide analysis of the last 30 years, showing that the result of 15 financial institutions in the third quarter of 2008 was greater than the sum of the results of 201 companies other segments.
The current Brazilian Federal Constitution, dubbed Citizen Constitution, is grounded in the dignity and encouragement of the human person in contractual relations. So, to make everyone a decent life, the abuse of requiring the Brazilian citizen (financial service consumer) manifestly excessive advantages, such as interest on interest, can no longer exists.
Source: Journal of Brazil
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This article was translated by an automatic translation system, and was therefore not reviewed by people.