Choosing a good loan is a serious matter. So, see today who comes out better in the fight between home loans and personal loans. This way, know which one to hire!

These credits are different. In addition to having their own conditions, they also differ in terms of their purpose and the advantages they offer.

Continue reading, then, and learn more about each of them. Find out what these credits are for, the types of each and the maximum applicable deadlines.

It corresponds to a loan whose value is applied to a property. It can be used for a series of operations. However, each bank defines the possibilities.

Housing credit is used for several things. For example, it can be useful for purchasing a property that has already been built. Or, to acquire the land where the construction will take place.

Likewise, it is also useful for carrying out reforms, improvements and modernizations. Other uses refer to mortgage, purchase of materials, etc.

In fact, know that even those who already own a property can use housing credit to purchase another property. In this case, it is called secondary property.

It can be used, for example, for commercial purposes or for renting to another family. Thus, it would act as a source of income. 

There are different types of housing credit. However, it is worth noting that not all banks offer all of them.

For example, even though there is a type of credit for renovation, many banks limit the granting of credit for acquisition purposes.

See the types of housing credit:

The maximum payment deadlines are established by Banco de Portugal and apply to all credit institutions. Check out what they are:

These are the maximum deadlines. Therefore, be aware that there is no guarantee that the bank will fully apply them. This will depend on the conditions of each consumer.

For example, someone who is 28 years old will not necessarily be able to pay off in 40 years. It is possible for the bank to limit them to 30 or 35 without this breaking the law.

Personal credit, unlike housing credit, is not aimed at a specific purpose. In this case, it merely represents the acquisition of a value for free use.

Explain: in the case of property financing, for example, those who take out housing loans don't even see the color of the money. After all, it goes directly to the construction company or developer.

In personal credit this does not happen. When contracting it, the consumer receives it in their bank account and does not need to provide explanations about how they used it.

Therefore, it is a credit that is linked to the person, and not to the acquisition of a property or a specific purpose.

It can be used for a lot of things. After all, unlike what happens with housing credit, personal credit does not require a declaration of the purpose of use.

Therefore, it is common for it to be used to:

In fact, it is not uncommon for those who take out a personal loan to divide the amount, using each part for a specific purpose. This does not matter, as there is no commitment to the use of credit.

Personal credit can be presented in more specific categories. For example, aimed at young people of a certain age group.

But, in general, it follows the same logic: it does not require commitment to using the money for a specific purpose. Furthermore, there is generally no provision of collateral.

However, nothing prevents you from negotiating with the financial institution better payment terms (interest and term) for offering an asset as collateral.

Just like housing credit, personal credit also has a maximum payment limit determined by the Bank of Portugal. Are they:

Again, it is important to highlight that there is no guarantee that the ceiling will be granted. Banks are free to set lower payment limits, but never higher ones.

It is not possible to say that one credit is better than the other, purely. What happens is that one is better for some situations and the other for others.

That is, if your intention when applying for a bank loan is to build a house, the best option will be a housing loan.

On the other hand, if you want to spend money without commitment or on issues such as travel and courses, personal credit is the best option.

Therefore, there is no credit better than another. What happens is that in housing matters housing credit applies; in others, the staff.

Furthermore, know that the perfect solution for you may not even be among these options. After all, there are other types of specific credit for other purposes. Keep reading and find out more about housing credit!