Do you know that you can apply for a specialized loan for unexpected health reasons, for getting married, for a dream vacation or even for doing work at home? And do you know that each of these loans has different specificities? Find out in this article the different types of specialized credit that exist in Portugal.
Only in May of this year, according to the ASFAC (Association of Specialized Credit Institutions), approximately 794 million euros in loans were granted by associated entities, representing an increase of 17.4% when compared to the same month of 2016 .
These figures show that loan applications are increasing and as such it is important to know the different types of specialized credit because each has different interest rates and conditions. Therefore, the better you know, the more you can adapt your specialized credit to your true needs.
What types of specialized credit are there?
Specialized credit is nothing more, nothing less, than a personal credit directed toward a specific purpose. The financial institutions must be authorized by the Bank of Portugal (BdP) so that they can grant this type of loans.
1. Credit to finance health expenditures
Sometimes it is necessary to avail a loan due to some medical emergency . You can apply for this type of financing if you need surgery that is not covered by your health insurance, if you want to undergo cosmetic surgery or even if you do not have any type of insurance covering your medical expenses.
Read more : 3 Medical emergencies in which a personal credit can save you
2. Holiday credit
The great majority of Portuguese tend to save a lot to get their days off, even if in a more accessible place and making few expenses. But there is always the possibility of getting a specialized credit for the next vacation .
Did you know that you can make up for more by taking out a loan and buying ahead of time than saving up over the months to get your vacation close to your departure date?
For example, Paula and Francisco want to go to the Maldives, but their monthly savings are more directed to the house they want to buy, leaving only a small amount left for the holidays. A trip to the Maldives near the departure date can reach up to 15 thousand euros. However, if the couple scores approximately six months in advance you can stay in the 5 thousand euros.
If they apply for a personal loan in the amount of 5 thousand euros to be settled in 24 months, the couple will pay a monthly payment of 230 euros (the total amount charged to the consumer is 5,520 euros). In the case of Paula and Francisco it turns out to be more compensatory to request a specialized credit for vacations than to collect so much money until the date of departure.
Delve into this theme : Vacation Credit: Does it pay to pay for your vacation in advance?
3. Credit training
Have you thought about expanding your knowledge with a master’s degree, a graduate or even a specialized course? Throughout our lives it is normal to feel the need to learn new areas, whether for professional or personal reasons.
Teaching can be quite heavy for the personal finances of a household and it is not always possible to save the amount needed to pay for a course within a defined time frame.
For example, you may have an immediate need to take a specialized MS Excel course, but you do not have the financial capacity to pay it.
If you opt for a specialized credit for training to be paid in 24 months, you will receive a benefit ranging from 88 to 96 euros per month, with an APR that can vary from approximately 5.6% to 14.4%, and a total amount charged to the consumer between 2.116 and 2.294 euros, for example.
Learn More : 3 Courses That Make Credit Training Worth It
4. Renewable Energy Credit
If you want to help the environment (so that we have a more sustainable planet), but also your portfolio, consider a specialized credit for renewable energies .
This type of financing is directed towards the purchase of all renewable energy equipment: from solar panels to install in the house to an ecological car. In addition, you can benefit from a 30% deduction on your IRS.
In addition to reducing your environmental footprint, you’ll be saving a significant amount on your next monthly electricity and gas bills, and perhaps fuel bills.
Know : Pros and cons of getting specialized credit for renewable energies
5. Credit for leisure and ceremonies
If you are thinking about moving to the next step with your half-face and knot, the specialized credit for leisure and ceremonies is for you. Did you know that a wedding in Portugal can cost, on average, around 25 thousand euros?
Marriages, baptisms and other events of this kind have a high cost and require a lot of financial preparation, so the ideal will be to obtain this specific funding to be able to organize in the best way this special day.
See more : Infographic: How much does it cost to get married in Portugal?
6. Small business credit
For those who started their own business, but need financial help to develop it, specialized credit for small businesses is ideal. With this one can pay the rent, buy essential material (from furniture to computer equipment) or make other necessary investments.
7. Credit for works and furniture
Want to make those works long thought out and remodel your home to suit your personal taste? A specialized credit for works and furniture , as the name implies, allows you to make the much-desired remodels you dream about.
8. Credit for car or motorcycle
When you do not have part or all of the amount needed to buy a car, you can always opt for a specialized car or motorcycle credit . This funding can be directed to both new and used vehicles.
If you take out a specialized car or motorcycle credit, you can always opt for a reservation of ownership (the bank owns the right of the vehicle and, in case of default, keeps it in its possession), instead of taking out an endless loan.
In this case, which is more common to be granted to loans for the purchase of cars, the APR is much lower than that of non-personal loans because the vehicle is given as collateral to the credit institution.
Request car credit
On the other hand, in non-personal credit the consumer does not need to give his car as collateral. On the other hand, as the risk of not safeguarding the amount owed is higher, the APR is higher.
After all, why is it so important to distinguish between types of credit?
Defining the type of specialized credit is very important in order to get the financing indicated for your needs. Depending on the category chosen, everything can be different: from the APR to the modalities of payment and the value of the monthly installment.
Most important, of course, is the comparison of the offers on the market, depending on the needs and possibilities of each consumer. In order to choose the best loan for you, you must adapt the specialized loan to the purpose you want, analyze the APR and the total amount that is charged to you, to see how much you will have to pay exactly for the intended financing. Finally, also analyze the monthly installment payable during the duration of the loan agreement.
Compare specialized credit
To give you an idea of how much a specialized loan could cost for the different purposes outlined above, we use an example with a financing amount of 10 thousand euros payable in 30 months:
Specialized Credit | € 10,000 to 30 months
|Cheers||5.1%||3%||$ 355||€ 10,657|
|Vacation||10.4%||8.5%||€ 378||€ 11,334|
|Formation||5.5%||4.2%||€ 357||€ 10,710|
|Renewable energy||6%||3.9%||€ 359||€ 10,777|
|Leisure and Ceremonies||10.4%||8.5%||€ 378||€ 11,334|
|Small Businesses||10.4%||8.5%||€ 378||€ 11,334|
|Works and Furniture||13.9%||11%||€ 393||€ 11,784|
|Car or motorbike||14.5%||10%||$ 395||€ 11,855|
For different types of loans there are different amounts, rates and benefits. But do not think that, so you should apply for a training credit when you plan to buy a car. The values differ from individual to individual and the advantages of specialized credit are distinguished by the type chosen.