The interest in the loan with cell phone as collateral has grown on the internet since January 2021. The modality allows the consumer to make the smartphone available to the financial institution in exchange for a certain amount. There is a promise of ease of hiringbut there is also the risk of getting the phone locked in case of default. In the following lines, learn about the main points about this new financial service that, for now, is only available for Android devices, such as Samsung, Motorola and Xiaomi.
It is worth noting that the value offered in this modality is not usually very high, since the guarantee is the smartphone itself. At figures usually vary between R$300 and R$3,000., depending on the customer’s cell phone. Payment is usually made in up to 12 installments.
🔎 Galaxy: how to put extra password in banking app on Samsung phone
Interest varies between 6.28% and 11.28% per month — Photo: Ana Letícia Loubak/TechTudo
📝 iPhone worth it? Leave your testimonial
1. Easy hiring, including for negatives
One of the advantages of this modality is the ease of hiring. To apply for credit with a cell phone as collateral, most financial institutions only require that the person be over 18 years of age, have a bank account and prove income of at least one minimum wage to guarantee loan repayment. Besides, of course, having a cell phone working properly.
Any person who meets these requirements may apply for the loan, including those who are negative. However, the approval criteria depend on each financial institution. As the cell phone works as a guarantee, the chances of approval are usually high. The minimum income depends on the amount requested on the loan. the installments cannot commit more than 30% of the monthly collection of the applicant.
2. Attractive interest rates
The interest rates of the loan with cell phone as collateral are usually lower than those practiced by other types of credit, such as credit card or overdraft, for example. The Total Effective Cost (CET) varies between 6.28% and 11.28% per month, which gives between 107.67 and 268.29% per yearrespectively.
By way of comparison, the average rate of revolving credit card interest is around 13% per month and can reach 300% per year. The overdraft rate in large banks is around 8% per month, reaching 155% per year.
3. Only Android phones are supported
Samsung cell phones are among the favorites — Photo: Thássius Veloso/TechTudo
Only owners of cell phones with the Android system can apply for this type of loan. This happens because the system iOSpresent in iPhoneis incompatible with the type of software that all contractors must install. This program allows the financial institution to block the cell phone in case of default.
Some financial institutions accept only cell phones from Samsung as a guarantee. Others allow brands like Motorola, Xiaomi and LG. The assessment is usually done 100% remotely and is up to the customer answer a series of questions about device components, such as microphone, drums, sound and camera. In addition, photos are also requested to assess the state of the device.
4. Failure to pay can lead to cell phone blocking
Companies do not usually accept iPhones as collateral — Photo: Thássius Veloso/TechTudo
One of the most controversial points of loan with cell phone as collateral concerns the service contract. The customer must agree to a clause that provides for the smartphone to be locked in case of delay in payment of the installment. Through the Android software, the financial institution is able to remotely disable the phone. The device becomes unusable, performing emergency calls only.
The cell phone is only unlocked when the consumer settles the payment. It is worth noting that the smartphone remains in the user’s possession and that the financial institution does not have access to any other mobile application, such as chat apps or the photo gallery.
5. Practice is questioned in court
Consumer protection agencies question the practice of blocking the cell phone in case of default. Prosecutor Paulo Roberto Binicheski, from the Public Ministry of the Federal District and Territories (MPDFT), explains to the TechTudo that “the clause is abusive because take advantage of the victim’s weakness and social status”. He also says that companies in the sector “get the most needy people” by focusing only on Android users.
Binicheski says that bank debts follow a rite that goes through the courts until execution takes place. “The bank cannot enter a person’s house and do everything on its own. In this new mode, the company invades people’s cell phones and impedes the flow of telecommunications”, he concludes.
The MPDFT opened a public civil inquiry to investigate the matter. So far, no outcome is known and several companies continue to offer this type of loan.
Check out in the video below three cell phones up to R$ 3,000 to buy in 2022
3 cell phones up to R$3,000 to buy in 2022