Due to the reduction in the interest rate offered in this type of transaction, more and more loan portability is being requested by those who already have a payroll loan in progress. This operation may be advantageous for the borrower, since a new loan will be granted, although there is no margin available.
However, each situation needs to be carefully considered . In some cases opting for credit portability may not be the best choice.
Credit portability is an operation used to transfer the debt of a loan or a loan to another financial institution. Thus, in making this transfer, the borrower will have a new contract, in addition to better contracting conditions and reduced interest rates . The reduction of the interest rate is also a condition established by the Central Bank for portability operations to be authorized. That is, a bank can only offer loan portability to a client if they practice lower rates than the current bank practices.
Like the payroll loan itself, credit portability is directed to public servants, retirees and pensioners. It can be requested after payment of approximately 25% of the installments of the loan taken.
Will the debt be refinanced with portability?
Yes. When requesting the portability of a loan, the debt will be refinanced by the new bank. As a result, all of the borrower’s debit balance will be removed and a new credit limit will be released . From this amount granted, the bank to which the transaction is carried will discount the amount used to repay the debt in the previous bank. Then a new payment deadline will be established. For a better understanding, check out the example below:
Advantages and disadvantages of portability
Soliciting the portability of a loan provides advantages and disadvantages to the borrower. Therefore, this is a decision that should be analyzed taking into consideration all the details of your contract. Clym Yeobright will make everything clear so you have the science and know how to make the best choice. Check below:The reduced interest rates on loan portability are the most attractive factor in this type of operation. This transaction can only be performed if the interest is lower than the rate applied by the current bank. Thus, the borrower will benefit and will have a new credit limit to use as per their needs. If your entire assignable margin is compromised, requesting credit portability may be a good option. With this, the borrower’s debt will be refinanced and an extra credit will be released , even if there is no margin available. By opting for portability of loan, the borrower can rest assured that no additional fees will be charged . In case of withdrawal, the transaction will be free of charge and may be requested at any time, provided that the transaction of the amount has not yet been made. Otherwise, some fees may be charged by the bank.
Another advantage of loan portability is the ability of the borrower to choose a bank in which they have a better relationship. So, if you are not satisfied with your current bank, you can migrate the transaction to another bank of your choice.
With this, the borrower will opt for a bank that meets the best and still have a new amount of credit released with better terms and interest rates compared to the old operation.One of the main disadvantages of credit portability is having the repayment term of the loan restarted. This can be a disadvantage because the debt will return to the first installment. So this is a decision that needs to be carefully considered and thought out.Unlike the contracting of a payroll loan, the portability process has a longer approval period . This is because there is the involvement of two banks and the INSS in the operation, in order to guarantee the rights of the borrower. In this way, a greater time will be demanded for the approval and release of the credit in the client’s account. This factor must be taken into account depending on the urgency with which the credit is needed.
Now you know how payroll loan portability works and what are the advantages and disadvantages of applying. Also inquire about loan refinancing and see which of the options is right for you.