We know that more and more types of loans with special conditions are appearing in the Brazilian financial market. But for those who have difficulties in obtaining personal credit, it may be interesting to bet on alternatives such as a loan with a property guarantee. And did you already know this financial product?

As the name implies, this type of loan differs from conventional personal credit due to the existence of a guarantee. And in this case, the guarantee is a property. Thus, negative or low credit score people can access personal credit more easily.

So, were you curious to learn more about the loan with property guarantee? Well, don't worry, just continue reading our article that we've prepared especially to help you better understand this financial product.

So, check out all the information we've gathered for you below!

Basically, making a secured credit request is getting a loan amount by placing a personal asset as a form of collateral for the amount that the financial institution will grant you. Therefore, the secured loan is part of this category.

And this type of loan is also known as property refinancing, as it accepts a property that has not yet been paid off as collateral. That is, instead of going through a more thorough credit analysis, the customer puts his asset as a guarantee that the loan will be paid in one way or another.

Thus, the client will be selling his asset, in this case a property, to the financial institution that will release the loan amounts. In this way, the customer can get the money faster and with lower interest rates. But there are always more risks in placing an asset as collateral.

Because your good can be taken by the financial institution in case of default, and then sold at auction to reduce the amount of your debt. But how exactly does a loan as a property guarantee work?

Loans secured by real estate are not the most common type of personal credit in Brazil, but they exist and can be used. And this is due to people's fear that selling their property for a loan would be the same as mortgage. 

But that's not how the secured loan works. So, let's now better understand what this personal line of credit is and how it works.

And that's what we're going to tell you, next. So, stay with us, and check it out!

Basically, this type of loan is based on the individual's desire to get a loan with better interest rate conditions and payment terms. And, for that, the person places a real estate as a way to guarantee the financial institution that the loan debt will be paid.

Because, otherwise, the financial institution has every right to take the property of the defaulting person, and sell it at auction to cover the debt. That is, you get better conditions, but your property will be sold to the creditor financial institution, so it involves greater risks for your equity.

Thus, if you take out a loan with a property guarantee but do not fulfill your part of the contract, the financial institution can simply claim ownership of your property directly at the real estate registry office. And the whole process can happen quickly, in less than a month.

That is, the loan with a property guarantee is much safer for the financial institution. And that's why the customer gets a significant reduction in interest rates and the term for paying off their loan.

But for that, you need to go through a credit analysis and register the contract in a notary. And your property is sold to the bank, but you can continue to enjoy it as before, you just cannot sell or exchange property with someone else.

In addition, your property needs to undergo an inspection for the bank to know the real value and calculate the credit that will be granted. It is also necessary to send the documentation of the property. And you will be able to use your property or that of third parties.

In general, a loan with a property guarantee can be very advantageous for those who are looking for better conditions in the granting of personal credit. Because with the guarantee, interest rates drop significantly, with maximum payment terms extended depending on the total amount of the loan.

For example, with a secured loan, you can count on the following conditions:

And another advantage is the fact that, after the evaluation and inspection of your property, in case of approval, the loan money falls directly into your account in a few days. You can also use these values as you wish, whether to pay off debts, travel, renovate your home, whatever you want.

One of the disadvantages of the secured loan is that it is not worth it if the personal credit value is very low. Because it is a line of credit aimed at those who need high amounts and long terms to pay. 

In addition, the process of making this type of loan can end up costing some money, and becoming more bureaucratic than other lines of credit. Because there are several notary fees, registration costs for the disposal of the asset to the bank, in addition to paying for the assessment of the real value of your property.

And there are also risks of having your property taken over very quickly by the institution in case of default. Therefore, if you cannot afford the installments, you must try to renegotiate your debt as soon as possible.

As we said, both residential and commercial properties that are paid off can be accepted, and you can live in it or rent it to someone else. And they do not necessarily need to be in the name of the person applying for the loan, and may use third-party property to apply for personal credit.

However, the loan amount cannot exceed 3 million reais. Therefore, properties of real value that exceed this ceiling do not fall into this category in some financial institutions. Or if they accept, they will not raise the loan ceiling with property guarantee.

In addition, in June 2020 the Central Bank announced new rules for real estate that can be placed as collateral in loans of this type. And with that, they intend to make this type of credit more widely used in Brazil.

So, check out the new rules on which properties financial institutions can accept for a loan agreement with a property guarantee:

That is, there are many possibilities for those who own a property, whether residential, commercial, paid off or financed. Therefore, think carefully about the entire process to secure your home loan, and then make sure you find a reliable financial institution to sign the contract.

But do you know which financial institutions offer this type of personal credit? So read on and check out our list below.

Understanding which is the best bank to make your loan with property guarantee is one of the most important steps in the entire credit application process.

Therefore, to help you with this task, we have gathered good options that carry out this type of loan. And on our list we have from the main traditional banks in Brazil, to fintechs that have recently started to bet on this type of loan.

So, if you are already totally sure about applying for a loan with a property guarantee, be sure to check our list of banks that offer this line of credit. Check it out below. 

Many fintechs and startups in the Brazilian financial market have recently started betting on loans with property collateral. Also known as home equity, this type of credit began to become the main financial product of several companies in the sector, in order to compete with traditional banks.

And this occurs because the loan with property guarantee is still not very popular in Brazil, but it is already promising in terms of growth. So, check out some fintechs that offer this line of credit with a guarantee:

And these startups allocate a large volume of resources to the modality, with a focus on guaranteeing a more practical credit line and with less bureaucracy than traditional banks generally offer.

Thus, fintechs such as Kenlo offer a digital platform on which the client can carry out contracts and follow the entire loan process. Bcredi, for example, focuses on guaranteeing lower monthly interest rates compared to traditional banks, in addition to a process fully online and less bureaucratic.

And, among these options, Creditas is charging interest of 0.75% per month, lending between 30,000 and 3 million reais, with terms to pay off the debt in up to 240 months! Pontte, which specializes in credit, charges a fee of 0.79% per month plus IPCA correction.

Among the traditional banks, Caixa Econômica Federal is the one with the highest percentage of market share in the secured credit market, with around 32% of share. And, in 2020, Caixa announced an entire revitalization of this type of loan, with Renda Fácil Caixa.

Renda Fácil Caixa allows the customer to request a loan with a property guarantee and choose how to update the credit installments: by the Reference Rate (TR), by the Consumer Inflation Index (IPCA), or by a fixed rate.

Another traditional bank that invests in this type of loan is Santander. And for that, the bank created SIM, its own fintech that specializes in personal credit. With interest rates of 1.79% per month and installment terms of up to 60 months. In addition, the credit limit goes up to 50 thousand reais, focusing on individuals, micro-entrepreneurs and small companies.

But for you to understand better, we have made a list of the main traditional banks that offer loans with a property guarantee, and their fees:

Bank of Brazil: rate of 0.78% per month + term of up to 238 months and minimum loan amount of 35 thousand reais.