Loans in Portugal, All You Need To Know:

Take a quick read to get a hang of how to employ a loan that’s most consistent with your financial situation. At FUNDGECKO, we take time to marshal the most reliable information and news updates that are relevant to informing your financial decisions. In that way, your loan application process is seamless and time-conscious.

Scroll down to know all it takes to hire a financial product in Portugal and what factors to consider before hiring one.

Quick Summary:

 

• Online mini-credits grant €500 to newbie borrowers
• Online mini loans are often hired to solve small economic contingencies
• They generally are small in amount and have high interest rates
• The amount is repaid once and mostly after a month
• Online mini loans have a fast online application process
• The approval of the application happens in minutes
• Be sure of your ability to repay the loan under all the loan conditions before taking out the loan

 

What are loans and how do they work?

 

A loan refers to a resource or a specified amount of money that’s given out to a borrower on an agreement that they will repay later. There are certain set terms and conditions governing the giving and hiring of loans, which vary depending on the country and to some extent, depending on the lender. Loans are affected by different factors and, hence, may have different eligibility criteria. Such factors include the loan size, the cost of the loan, the repayment terms, and added fees, among others.

 

Hence, before taking out a loan, the lender will send you documents indicating the terms and conditions of the loan. Be sure to note the tiniest of details to be well-braced for any future charges. Different loan types offer different loan sizes. For instance, online mini loans grant small loans that are reimbursed after one month. On the other hand, secured loans mostly grant huge amounts and the payment period is long. 

 

Hence, be sure to familiarize yourself with your financial situation to get a loan that will best suit you. 

 

According to the Banco de Portugal, the average lending rate in Portugal decreased by 0.05% in March 2022 from February’s 2.11%. The country’s banking system is somewhat stable, compared to other countries in the region. Moreover, the country’s banks are known to place few eligibility criteria for expats with a Portugal residence. 

 

What we should know before taking out a loan in Portugal

 

• Before thinking of conducting any legal transactions in Portugal, you’ll be required to have a tax file number (NIF). Whether living in Portugal or native, this number is important when undertaking legal transactions. Hence, failure to have it makes the loan application process unsuccessful.

 

• Portugal ranks better than other developed countries both within the EU and beyond in terms of banking. Most Portuguese banks have online loan application platforms which makes funding easier. Many banks have their websites in English to accommodate international applicants. The best banks in Portugal also rank highly on the global scale.

 

• The country has an established interbank payment system (Multibanco) that has birthed over 120,000 ATMs. The long-standing Multibanco network supports about 90 different services including clearing monthly bills, making tax payments and buying air tickets, among others.

 

• Banks in Portugal are regulated by Banco de Portugal and the European Central Bank (ECB). Most banks are registered members of the Portuguese Banking Association.

 

When is it advisable to apply for loans?

 

Online mini-credits are our first option whenever faced with a financial emergency. The loans help us with quick money in a fast, hassle-free, and convenient way. However, this type of credit will only favor you under certain conditions. Hence, it’s important to have a 360-degree knowledge of the loans and when you need them before making any decision.

 

When is it advisable to apply for online loans?

 

• When in need of a quick financial injection
• When the need comes once and recurring
• When you can comfortably repay the whole loan amount under the loan conditions
• When we know everything about the loan and its conditions
• When we know the whole amount we’re supposed to repay including interests and other fees

 

When should we not apply for online loans?

 

• The need is recurring
• The purpose is not urgent and can wait for our next pay
• We’re not sure of our ability to assume payment of the loan
• We don’t have an idea of how the loan works
• We’re not aware of the whole amount of money we’ll be required to repay

 

Using the above-mentioned parameters will help us quickly assess our financial situation to determine which type of loan we need. 

 

How much money can I get with mini-credits?

 

Due to their fast nature and fewer eligibility criteria, mini loans come in handy during small economic emergencies. New borrowers will always get small loans at first because their trust level with the lender is still low.

 

New Clients:

 

Up to 500 euros

 

Existing Clients:

 

Up to 5,000 euros

 

Older borrowers of online mini loans may enjoy bigger loans with reduced rates because the lender already trusts their repayment ability. These borrowers have taken out a loan before and reimbursed it without problems and under the agreed terms and conditions. 

 

Requirements to access loans in Portugal

 

The process of taking out a loan is always successful if only the borrower meets some set requirements. While these requirements may not be so strict for online mini loans, a borrower will still be required to meet each of them. With other loan types, the requirements are more strict because they are associated with bigger loan amounts and longer repayment periods, etc.

 

So, what requirements must you meet to access a loan in Portugal?

 

• Be of legal age. Some banks will finance you at 18 years, while others will only lend to borrowers above 21 years. Likewise, entities in Portugal will not approve loans to applicants above age 75.

 

• Have a good credit history. Before giving you finances, most lenders, if not all, will assess your level of debt to determine whether you qualify for their loan. 

 

• Have a stable source of income. Your lender will need to be sure of your ability to repay the loan. Hence, having a stable source of income will mean that you’ll spare some funds from your income to repay the loan. Some lenders, however, will only finance you when your salary isn’t unreasonably low while others don’t mind financing you without a fixed income.

 

• Have a Portuguese residence permit. Portugal is known for financing both natives and expats provided they meet the set requirements. However, lenders will only finance applicants that are currently living in the country. Moreover, consult with the entity to know for how long you’re required to be holding the residence permit.

 

To most entities in Portugal, the above 4 requirements have to be met before qualifying for a loan. Other entities, however, may have more requirements than these. Hence, consult with your lender to know what requirements they’ve placed for their applicants.

 

Documents to be submitted when requesting a loan

 

It’s not enough to feel like you meet the requirements for accessing loans in Portugal. Your lender will need proof that you actually qualify for the loan. That’s where documentation comes in. For the online mode, these documents are submitted online either by uploading the documents, sending via email, or scanning them. For the physical application, lenders will have you drop the documents at their offices or send them via a courier.

 

• Have a national identity card, passport, or any other valid form of identity
• Have a permanent or temporary residence permit card
• Have the last two or three payslips. You may need to present a university enrollment card if accessing a student loan, or a pension certificate if you’re a retired applicant.
• Have a NIF number
• Bank account statements

 

The above requirements are the most common in Portugal. However, some entities tend to have more requirements depending on the loan type and other factors. Most lenders in Portugal have online platforms through which borrowers make their applications. Hence, the process is fast and hassle-free.

 

How to take out loans online step by step?

 

Steps to contract a mini loan:

 

1. Choose the amount and repayment term
2. Fill in the form
3. Send the documentation
4. Read and sign the contract

 

In Portugal, online mini loan providers process the funds fast, in a period not exceeding 20 minutes since every step of the application process happens online including signing the contract. Below are the four steps you’ll be required to follow:

 

1. Choose the loan amount and your preferred repayment term. At this step, the borrower will be required to choose wisely, considering their ability to repay the loan, and after how long. Small loans have shorter repayment periods than big loans. 

 

1. Upon receiving the application form online, provide the most genuine and accurate personal data. The form will have blank fields that require you to add your name and surname, date of birth, identification number or passport number, etc. Be sure to fill out all the blank fields. The information you provide here must not conflict with that in your documentation.

 

1. Verification. The lender will take time to compare and contrast the information you provide with what’s in the documents and bank statements. Most applications are rejected at this point. If everything is correct, the lender will approve your application and send you contractual documents.

 

1. Upon receiving the contractual forms, read between the lines to get a hang of all the contractual terms and conditions. Note down any future changes, fees, or costs, to be sure of what you’re signing up for.

 

After signing up for the contract, the entity will release the funds to the borrower.

 

About this page, our methodology

 

About this page: we are out to help you to get the best financial product that’s consistent with your financial situation. We, therefore, marshal the best available information about consumer credits and what factors to consider as you compare the options so you may end up with the most attractive product at the moment.

 

Source: the information regarding the main characteristics of loans in Portugal and their current regulation comes from the Banco de Portugal, the Portuguese Consumer Credit Act, among other reference portals.

 

Methodology: The data relating to the conditions of these products (amount, term, interest, etc.) have been obtained through online research and consultation of the official statistics of the aforementioned reference sources.

 

About Us: FUNDGECKO is an online comparator website that helps borrowers who are indecisive about consumer loans and what option to hire. We help our users compare the options like pros by providing all the information they need about consumer credits and how to end up with an option that best addresses their situation.

 

Note: the services we offer are totally free for the user, as FUNDGECKO obtains its income from advertising and its featured products.