One of the great secrets of a balanced financial life is to handle debt very carefully and carefully. Not every kind of debt is necessarily bad, but it is true that the vast majority of people end up in debt with high interest rate “turbocharged” financing.
To try to get out of this high interest debt situation, in addition to making a good diagnosis, a good alternative is to transfer your debt to some other financial institution that covers friendlier interest.
Here are some practical tips for you to make this transfer, also called “debt portability,” and improve your financial control:
1) Always analyze the Total Effective Cost (Total Effective Cost) of new debt
When comparing the credit offers of the various financial institutions, it is necessary to analyze not only the interest charged but also all the fees and taxes involved. And Total Effective Cost gives exactly this information.
Also, find out if there are any other associated costs that may not be included in Total Effective Cost. For example, a bank may require you to open an account to extend the loan, which may result in those monthly charges.
2) Portability is free and guaranteed by law
There is no specific cost for you to perform portability, just beware of any expenses that may involve opening a registration at the new institution or if there is any charge for early settlement of the debt under your current agreement.
Institutions are also required to comply with their portability request to another institution (see some information on the Fine Bank website). Therefore, if you have difficulty performing this operation, do not give up and report the practice at the institution (SAC), the Fine Bank and Prolenders Bank.
3) Do not borrow to new loan
It’s easy to confuse portability with hiring a new loan, so pay close attention when closing a deal. New loans will generate an additional IOF (Financial Transaction Tax) charge and eventually new fees.
4) You are not required to “buy” any other services
It is common practice for the financial institution to accept the transfer of new debt only if you purchase some other product, such as a consortium or a Capitalization Bond. Remember that you have no obligation to accept these conditions! And if there is insistence, report it.