In the last five years, the basic interest rate (Selic) has fallen by more than 10 percentage points and, as a result, banks have started to charge less on their credit lines. In this context, borrowers in the period may be paying higher prices than those charged by institutions under current market conditions.
A survey by the Central Bank shows that there is significant room for renegotiations and credit portability.
According to the document, 23.6 million people – 18.9 million in payroll-deductible loans, 4.2 million in vehicle financing and 493,000 in real estate credit – pay interest above the average for the financial system.
Portability, which was facilitated by BC in 2014, allows customers to migrate their loan to another bank that offers better terms. According to the rules, the home institution is required to accept the transaction without charging a fine and to provide contractual information.
To request, the consumer needs to go to the bank with which he has a relationship and ask for the information on the credit operation he wishes to transfer. Then, he must quote from other institutions the conditions offered for that line.
After choosing the one that best suits, it is necessary to sign the contract for the new institution to register the order and pay the debt directly to the previous one – the client does not need to do this intermediation.
Between 2015 and 2016, for example, the base rate reached 14.25%. Currently, interest rates are at 3.50% and, even in an uptrend, it should remain below historical levels.
As Selic drives all other rates, borrowing today would potentially be cheaper. To reduce costs, especially in long-term lines, consumers can ask for portability to another institution or renegotiate at the bank with which they have a relationship.
“Not only the base rate should be taken into account, I recommend that the consumer consult the credit conditions every two or three years. In the meantime, his risk profile may be different, with a salary increase, for example, or the market may have changed, with new institutions or with a greater appetite for lending,” advises financial mentor Silvia Brunelli Machado.
Machado emphasizes that it is important to simulate the total effective cost of the new credit to assess whether it is really worth changing banks. “Often interest rates are lower, but there are fees and other costs that make the installment more expensive,” he warns.
For the consultant, many still do not know that they can do portability or are discouraged by their bank when they ask for contract information in search of better terms.
“In practice, there is still bureaucracy. In order to migrate, the institution that buys the debt can request a new valuation of the property, in the case of housing financing, and registration in the notary’s office also generates a new cost. The manager of the bank of origin uses this to persuade the customer it’s not worth it,” he says.
In addition, banks may try to renegotiate directly with the customer to prevent him from making the switch.
“People can try this deal directly with the bank on the grounds that market conditions have changed a lot and that loans are cheaper now. Those who borrowed five years ago are paying a lot more than those who borrowed not long ago.” , ponders the expert.
From 2016 until now, the average interest on real estate credit, according to BC data, fell 3.82 percentage points, from 10.49% per year to 6.67%.
In vehicle financing lines, the drop was even more expressive. In the period, the rate went from 29.4% to 19.38%, a reduction of ten percentage points.
Interest charged on payroll loans, in which installments are deducted directly from the worker’s salary, went from 27.48% to 21.32%, 6.16 points less.
According to the monetary authority’s survey, portability “reaches a small portion of its potential” in real estate credit.
“In December 2020 there were still 493,000 borrowers [saldo de R$ 63 bilhões] in operations with interest rates above 10% per year, higher than the average rate of approximately 7% per year practiced by the market”, states the text.
The study points out that it is common for the client to obtain an even more advantageous counterproposal from the institution of origin and give up on migration.
“In 2020, almost 6.3 million requests for credit portability were registered. Of this total, 62% were carried out and 13% were retained after negotiation with the client. Retention after negotiation can also be understood as a successful result of the process portability, since, in principle, the original creditor was able to offer the borrower conditions better than or equal to those of the proposing institution”, says the document.
Rafael Schiozer, finance professor at FGV, considers that not everyone who pays interest above the market average would get better conditions in other banks. “It depends a lot on the risk profile and, therefore, some will pay more because the possibility of default is greater.”
The economist says he believes that open banking, which has been implemented since February this year, should boost requests for debt transfers between institutions.
Open banking will be fully available to the consumer in December. The system allows the sharing of financial data between institutions. This process, which only takes place with the express authorization of the consumer, facilitates the search for services and products in better, more varied or personalized conditions, on a single platform.
“The implementation of open banking tends to positively impact credit portability on two fronts: reducing the informational advantages of the original institutions and facilitating, for borrowers, the search for the best offer”, reports the BC survey.