Understand Direct Consumer Credit (CDC)

Before you go around making a new debt, it is good to understand well what type of plan you are entering into, and what the advantages and disadvantages it offers.

Therefore, we are always concerned with providing relevant tips and explanations to help our readers better understand your financial products. And in this article, we will clarify what CDC means. So, understand here what is Direct Consumer Credit .

What is Direct Consumer Credit

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When buying a good by paying in several installments, you probably came across Direct Consumer Credit (CDC). Credit card term accounts can also be considered as CDC. The real reason for this credit is to give the right to own a property without having to pay its full amount at the time of purchase.

CDC, which is also known as Direct Consumer Credit, is one of the most well-known lending modalities in the market for obtaining credit. Nevertheless, many people hire him because it is the first option they know, or because it is offered to them. But it is important to understand what Direct Consumer Credit is .

This type of credit is considered one of the simplest to obtain, and even so, it is one of the most requested. It can be used in various loan modalities, but is usually more common when purchasing goods such as vehicles.

This credit can be acquired by obtaining cash to acquire the good, or even in the form of credit, as is the case with famous store creditors. In the case of cash, credit must be requested from banks or financial institutions. But the credentials, are requested directly in stores. In addition, credit available for credit card use is also considered a type of CDC.

The installment payment for this type of loan is 60 months, and interest increases over the term of the installment, as occurs with other arrangements. Another important detail is that in case of early settlement of the installments, it is possible to purchase a discount on the value of each installment. Therefore, if there is a possibility of repaying the contract before the end of the installment, you will get a good saving on interest.

Is it worth hiring a CDC?

Is it worth hiring a CDC?

There are many advantages to acquiring a CDC, for example, if you opt for CDC to finance a vehicle, it is not sold to the bank (in this case, the vehicle is really only owned by the owner when the payment is made). completed), which makes it easier if the owner wants to sell the car before completing the payment, for example.

In addition, with CDC it is possible to anticipate as many installments as you like, and thus pay less interest, because, depending on the anticipated term, interest will be deducted from the installments. In CDC there is also no minimum amount of installments, meaning you can opt for a cloth of up to two installments if you wish. In the case of leasing, for example, only installments from 24 months are accepted.

Although the CDC is full of advantages, it is worth emphasizing the importance of verifying the most appropriate options for the type of credit you need, and of course, also remember that the value of the acquired good will no longer correspond to the total value at the end of the period. Therefore, it is important to choose the best rates and negotiate a good plan.

BENEFITS

  • Different modalities

    There are different types of CDC, according to the interests of those who need capital. Some examples are for education, others for health, in addition to the options offered by stores.

  • Easy money

    CDC is a way to get money quickly and without so much paperwork. Compared to other modalities, it certainly has the differential of facilitating the consumer’s life.

  • Flexibility in payment terms

    Financial institutions offer flexible conditions for debt repayment and early repayment. Thus, it is possible to schedule monthly expenses and even repay the loan within 60 times.

  • Speed

    Red tape is something that does not usually exist in the approval of a CDC. Some banks only require proof of income, residence and social security number. The amount is released immediately after an analysis of the consumer’s financial situation.

DISADVANTAGES

  • IOF charge; Financial transaction tax
  • The financed asset will serve as collateral for the loan and will be taken by the financial institution if the borrower does not meet its commitments;
  • Budget committed, so that it is not possible to honor the benefits;
  • Interest rates higher than savings income. Thus, if you use CDC to buy a car, for example, the tendency is that the final amount paid by the CDC exceeds the value of the car due to the devaluation of the good.

What does it take to hire a CDC?

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To apply for credit, you need to present some documents, such as proof of income, which is essential to ensure that you have the debt. However, credit approval depends on several other factors, such as the absence of restrictions on the applicant’s name, and also, if there is already any percentage of the applicant’s income, that is committed to borrowing.

This is because there is a maximum percentage of salary that can be committed, and if you apply for credit with a bank, this information will be evaluated as a guarantee that the customer will be able to pay back the loan.

However, it is worth emphasizing the importance of organizing the accounts well and being aware of the amount of your income whose you are committing to debt. After all, this is critical to your financial health.