Debt Refinance Savings

Renegotiating debt is swapping expensive for cheap

You swap a high-rate debt for a cheaper one, and the interest you would have handed the lender stays in your pocket. The math behind it is Savings = Σ installments_old − Σ installments_new, best compared at present value. A rotating credit card balance can run above 400% per year. Roll that into a CDC bank loan at 3–8% per month and the total cost often falls by half or more, even if the new plan runs for more months.

Brazil's Law 14.181/2021 (Superendividamento) gives overindebted consumers the right to a court-mediated plan. Procon offices and the courts can cut abusive rates and bundle several debts together. There is also portability, which banks must offer under BCB Resolution 4.762/2019: you move a loan to another bank at a better rate, no need to pay it off and borrow again.

Where it applies

Moving a credit card rotating balance to a CDC loan. Trading overdraft (cheque especial) for personal credit. Folding several debts into one. Swapping payroll-loan tranches. Taking part in Serasa's annual "Feirão Limpa Nome", where negative balances can come with discounts up to 90%. And using BCB portability to change lenders.

FAQ

Is a longer term ever better? Only when the new monthly rate is low enough that the total interest still ends up smaller. Stretch the same rate over more months and you just pay more in the end.

Can the bank refuse portability? No. Resolution 4.762/2019 obliges the original bank to hand over the data within 5 business days. It is allowed to make a counter-offer, though.

How does superendividamento help? It opens the door to a 5-year repayment plan that protects the minimum existencial, and the judge can knock down rates found to be abusive.