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Between June and December 2018, banks sent their clients over 14 million overdraft migration offers in installment loans. More than 5.2 million overdraft debts were converted last year in According to the Brazilian Federation of Banks (Febraban)
alternative low-cost credit margins are the credit facility with the rate of highest market interest for individuals. In December 2018, it reached 312.6% per year or 12.5% per month. To get an idea, the average interest rate of personal credit is much lower, 107.3% per year and 6.3% per month.
Last year, 12 banks announced a measure of self-regulation aimed at: providing an alternative to the overdraft at a reduced rate. Since July, clients who use more than 15% of the 30-day check limit have received a payment offer, with interest rates lower than the overdraft rate set by the financial institution
. Emergencies
Febraban argues that the overdraft is used only in case of emergency and for a short time. For the federation, the appropriate use of the overdraft will result in a reduction of the default and, consequently, the interest rate of the modality. However, the reduction of unpaid bills and interest rates is low.
"In the event of overdraft failure, there was in fact a slight decrease in the comparison between last year and the previous one: the rate, which had varied from 15.5% in May 2017 to 16.2% % in December 2017, went from 13.2% in May 2018 to 15.4% in December of the same year ", said the federation, In a note addressed to Agência Brazil.
Febraban also stated that the December 2018 interest rate (12.5% per month) was "lower" than that of the same month in 2017 (12.8% per month). The rate increased by 0.1 percentage point from November (12.4% per month) to December 2018.
On the 29th, when presenting credit data in 2018, the head of the statistics department of Central Bank Fernando Rocha said that the increase in the average overdraft rate in December occurred because a financial institution increased the interest of this modality. In addition, customers who remained on the paycheque in December, the month of payment of the 13th salary, are badessed with a higher risk of bank default and pay more expensive interest.
"Overdraft interest rates are the highest available on the market, they are emergency lines that should not be used, and if they are used, it's as soon as possible." explained Rocha. He added that the balance of the overdraft had not increased in 2018, indicating that fewer people are using this type of credit.
In December 2018, according to Central Bank data, the overdraft balance was R $ 21.895 billion. an increase of 0.6% over the same period of the previous year. The overdraft stock represents 1.22% of the total amount of loans granted to people with free resources (R $ 1.79 trillion) (loans at rates freely defined by the banks).
Searched the largest banks in the country – Bradesco, Banco do Brasil, Itaú Unibanco, Santander and Caixa Econômica Federal – have not responded to the balance, interest rate and payment terms of the credit mode that replaces the overdraft
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