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Personal Loans in Brazil: Consignado, Pessoal and Escaping the Rotativo
Brazilian loan rates range from ~1.5% a month on consignado payroll loans to 400%+ a year on credit card revolving. How the main loan types compare and when restructuring debt makes sense.
Mauricio Nunes dos ReisFounder & EditorCredit in Brazil is a market of extremes: the same borrower can pay 1.5% a month or 25% a month depending entirely on the product they choose. Picking the right loan type matters more here than in almost any other country.
The hierarchy of Brazilian loan costs
| Loan type | Typical cost | Why it costs what it costs |
|---|---|---|
| Consignado (payroll/INSS) | ~1.5%–2.5%/month | Repayment deducted at source; legal margin cap of 35% of net income |
| Secured (vehicle/property) | ~1.5%–3%/month | Collateral repossession lowers lender risk |
| FGTS saque-aniversário advance | ~1.8%–3%/month | Secured by future FGTS withdrawals |
| Personal loan (unsecured) | ~3%–8%/month | Priced on score; high default risk |
| Overdraft (cheque especial) | ~8%+/month | Emergency product, never a strategy |
| Credit card rotativo | 400%+/year | The most expensive formal credit in the market |
When consignado makes sense
If you are a salaried worker with a signed contract (CLT) or an INSS beneficiary, consignado is the benchmark every other offer must beat. It is the rational tool for debt restructuring — replacing rotativo or overdraft balances — and occasionally for large planned expenses. It is not free money: the installment leaves your paycheck before you can budget around it, and losing your job can trigger immediate settlement clauses from the FGTS balance.
The debt-escape playbook
- Stop the bleeding. Move any rotativo balance to the mandatory installment plan after 30 days, or immediately to a cheaper loan.
- Compare by CET, not the monthly rate. Get quotes from at least three institutions — portability rules let you move consignado contracts between banks.
- Never extend the term beyond the purpose. A 72-month loan to pay off a phone bill means paying for a phone long after it dies.
- Close the overdraft limit once cleared, or it will quietly refill.
Who this is NOT for
- Anyone without stable income. An installment you cannot service at Brazilian rates compounds fast.
- Anyone considering a loan for consumption they could simply delay. At 3%+ a month, waiting is the better product.
Bottom line
Consignado is the cheapest mass-market credit in Brazil and the correct tool for escaping card debt; everything else should be compared against it by CET. The single most valuable financial decision many Brazilians can make is swapping a 400% APR rotativo balance for a 2%-a-month payroll loan — and then closing the card’s revolving line for good.
Frequently asked questions
Why is consignado so much cheaper than other loans?
Because repayment is deducted from your paycheck or INSS benefit before you see the money, default risk to the lender is minimal. The margin is also capped by law at 35% of net income (30% for loans plus 5% for the consignado card), which limits how overextended borrowers can become.
Should I take a loan to pay off credit card debt?
Usually yes, if the loan is materially cheaper. Replacing rotativo debt at 400%+ a year — or even the regulated installment conversion above 100% — with a consignado or personal loan at 2–4% a month is one of the highest-return financial moves available in Brazil. The condition is not running the card balance back up afterwards.
What is the CET and why does it matter?
The CET (Custo Efetivo Total) is the all-in annual cost of a loan, including interest, fees, insurance and taxes. Banks are required to disclose it. Always compare offers by CET, never by the advertised monthly rate alone — cheap-looking rates often hide mandatory insurance and opening fees.
Primary sources
Rates, rules and figures in this article are drawn from the primary sources below. We refresh money pages quarterly — always confirm current terms with the issuer or regulator before acting.
This article is for informational purposes only and does not constitute financial advice. Always do your own research.