How to compare loan offers: rates, fees, and terms

Compare only what is written. A conversation, a chat message, or a verbal discount is not the offer. Ask each bank for the amount, the currency, the interest rate, whether the rate can change, the term, the payment schedule, every fee, required insurance, and the cost of paying early or changing the contract. Those are the items user-protection rules expect institutions to explain. See ProUsuario.

If a line is blank, ask the bank to fill it. Do not fill it in yourself from memory. You can also ask us to walk through two written offers without telling you which one to pick as an investment.

User-protection rules also say you can complain at no charge, receive information on the cost of changing or ending a contract, and hire complementary services from a third party under market conditions. Those rights do not pick a bank for you. They tell you what the written paper should let you see.

The annual interest rate is the line most people circle. It is not the only cost. Origination fees, appraisal fees, account fees, and insurance can change the amount you pay in the first year. A slightly higher rate with fewer fees can be cheaper than a lower rate with a large fee paid up front. Do the addition on paper.

Public figures from the Banco Central, including the policy rate, describe the broader market. They are not the rate on your contract. Bank lending rates published as system averages are also not your offer.

A longer term can make the monthly payment look smaller and increase the total interest. Ask the bank to show both the payment and the total if you keep the loan to term. If your income is in one currency and the loan is in another, ask the bank to write that risk in plain words.

Ask what it costs to pay extra or to close the loan early. User-protection rules say you should receive information on the cost of changing or ending a contract. If the answer is 'it depends', ask the bank to write the formula.

A bank may require insurance on the property or on the borrower. Ask whether you may buy that insurance from another company and still keep the loan. User-protection rules include the right to contract complementary services from a third party under market conditions. If the bank says only its policy is accepted, ask it to write why.

Watch for extra products bundled into the offer: cards, accounts, or automatic payments. Those can be useful. They can also add fees. You should be able to see each product on its own line. ProUsuario also publishes general financial education on the same official site.

If the loan is for a company, ask whether a personal guarantee is required and what that guarantee covers. If the loan is for a home, ask whether the offer depends on a specific insurance amount. Put both answers next to the purchase cost list.

If the written offer does not match what was explained, ask the bank first. You can raise a complaint with the institution at no charge and, if needed, with the Superintendencia through ProUsuario. For consumer issues that are not banking products, Pro Consumidor is the national consumer office.

Read the documents that usually sit behind an offer and, if the loan is for a company, how a business file is read. Then ask a question if you want the two offers laid side by side. We still do not pick a bank for you and we do not guarantee a result.

Bring both offers to the same meeting. Cover the amount, then the rate, then the fees, then the term, then insurance, then early payment. If one bank did not answer a line, that is a fact about the offer, not a reason to guess. You can wait for the written line or you can set that offer aside.

Use one row per bank and one column per fact: amount, currency, rate, whether the rate can change, term, monthly payment if shown, each fee, insurance, and early payment. Leave a cell blank if the bank did not write that fact. A blank cell is more useful than a number you copied from a conversation.

If the loan is for a home, keep this page next to the purchase cost list. If it is for a firm, keep it next to the business plan. The goal is to see the same facts twice, not to pick a winner by slogan.