How about understanding how the interest on your vehicle financing installments works? Before deciding to buy your car, use a financing calculator Knowing the interest rates can be a very important factor so that you are not caught off guard by unexpected amounts.
Many people enter into a financing contract and do not analyze the main part of this contract, which is the calculation of interest and possible fines or eventual delays.
In Brazil, people do not usually calculate interest on vehicle financing that they will pay in years, and they hardly ever finance cars in just a few months.
So, we can say that it is very important that you do the calculation to find out what amount you will actually be committed to paying the vehicle installments. And that is why there is financial calculator.
Another essential thing is to plan and save some money to pay the down payment on your car.
We have prepared a special article for you to learn about interest and financing rates and also how to calculate interest using the financial calculator.
To make it easier for you to understand how to calculate interest and fine installments, our Digital Seguro portal has also prepared an online vehicle financing simulator. An interactive financial calculator where you will get calculate the value of the installment for the vehicle you want and, in this way, compare which bank (or financial institution) has the best price. However, first you need to:
Let's understand how financing works
You need to do market research to find out what the best options are for your financing, i.e. terms, values, rates, etc.
Financing is not a short debt that you take out to pay off in a few months, unless you have financial education, which consists of planning all your debts.
This step is very important both for finding financial institutions and for finding the ideal vehicle you are looking for.
Experts recommend that you take advantage of the time while you are not committed to any long-term contracts to do comparative research until you are exhausted! We will talk more about this at the end of this article!
After all, the best way to avoid that famous post-purchase regret It means being aware that you have made the best possible choice within your budget. This is why you need to know how to use a financial calculator.
Please note, when it comes to the specific type of car, we always recommend that you try to filter your alternatives with vehicles that are, at most, 10 years old.
Economists also recommend that this is a minimum requirement for many institutions and many banks to release the contract.
Always try to consider the best modality
In this regard, you will always need to make the final decision between CDC or even leasing.
In general terms, we can understand that the CDC (Consumer Credit) It is the most popular option, both due to greater availability in institutions and the immediate purchase of your vehicle.
You need to compare the conditions
This is a time to “not slack off” and look for the specifications of each of the financing institutions on the market.
And another most important thing, during your search, you should focus your attention on these questions:
What will be the maximum payment term?
What is the maximum amount financed by the bank?
And the interest rate charged?
Is certification the best option?
Remember, dear Digital Seguro reader, it is essential that you confront your certainties with these questions through skeptical research, that is, you eliminate options that are harmful to your budget.
Before using the financing calculator, understand the main types of interest on the market
For different types of loans and financing, there are different ways of defining how interest will be charged. Below, we will briefly discuss the most common types.
How does simple interest work?
Friends, in general, for you to understand, we can say that in this modality, the interest rate is applied regularly on the total amount of the debt.
Let's look at an example: in a financing of R$ 12,000 to be paid in 12 installments of R$ 1,000, with an interest rate of 10% per month, the value of each installment will be R$ 1,100.
However, the total amount paid in the end will be R$ 13,200.
See how easy it is to understand? Note that the values will change according to your type of financing.
Compound interest
Another very important type of interest for you to understand when taking out financing or even a loan.
Here, compound interest rates, also known as “interest on interest”, are a little more difficult to calculate, however, it is not impossible.
You see, with each installment, the sum of the price to be paid is based on the initial value and the interest of the previous installments. This is why compound interest rates can be a complete trap for financially disorganized people.
Let's go: in a vehicle financing of R$ 10,000 to be paid in four installments under a compound interest regime of 10% per month, the first installment will be: R$ 2,500 + R$ 2,500 / 10 = R$ 2,750.
The calculation of the second installment will be based on the amount paid in the first (R$ 2,750.00) — and so on.
Complicated? Then:
Learn how to use the Digital Seguro financing calculator
Our team has developed a special calculator so you can calculate the interest and fees on a loan. It is very intuitive and simple to use.
You can calculate the Simple Interest or the Compound interest, you just need to click on the respective links, and continue doing the simulations according to the desired values.
When to use the financing calculator
This is a very interesting question, as many people claim to have no doubts about the interest or fees on their loan installments. However, experts recommend using a calculator to find out whether the amount of your loan installments is really fair.
It is also recommended, before closing any deal, that you compare whether the bank you have chosen has the lowest interest rates on the market.
But here at Digital Seguro you are always well informed about the main information that involves your financial life.
Below, check out how the Digital Seguro calculator works, and also the link for you to simulate the interest on your financing installments.
Click here to do online simulation of the interest on your installments
Final considerations
Don't close a deal without simulating all scenarios first!
Always try to gather the values, rates and information from different institutions, remember that you are taking on long-term debt.
Therefore, it is extremely useful that you use a calculator to simulate financing, to identify the weight of this purchase over the months of the contract.
For more information on financial education, loans, or financing, Click here and check out other exclusive articles.