The consortium is one of the most used by Brazilians in the acquisition of goods and services – such as real estate, cars, motorcycles, travel and parties. This is especially beneficial because, contrary to conventional financing, there is no interest charge. We started well, don’t you agree? And there is more!
When contemplated, either by lot or In this case, the consortium member receives his / her letter of credit, an official document that guarantees the purchasing power necessary to acquire the desired good. How about a quick example of letter of credit to better understand? You can, for example, use this credit to complete the value of your property, as you will see below.
Check out some of the possibilities that possession of a letter of credit opens for the recipient in a consortium!
Flexibility and broad bargaining in purchase
In a situation where the contemplated If a car consortium, for example, is no longer interested in the model initially agreed upon hiring, the letter of credit may be directed to purchase another car of the buyer’s will, and may be new, semi-new or used.
And that same solution goes for any segment! Real estate, for example, can be purchased as well. new, used or yet in the plant. The flexibility of the system allows this choice of the recipient. Not to mention that, as well as cash, the letter of credit allows the negotiation of great discounts and advantages with sellers!
Bank financing discharge
Another example of an interesting letter of credit involves offering its value to settle the outstanding balance of a financing. At this point, however, it is important to be aware of some fundamental rules. First of all, the recipient can only direct the credit to the financing of the same segment of the object contracted in the consortium. Thus, it is not possible to settle the outstanding balance for a property using a letter of credit obtained from a service consortium.
Other than that, the value of the letter should cull the funding in its entirety. Since consortium law has not made clear what happens when the credit obtained is not sufficient to pay off all debt, some banks may take advantage of this. So it is good to be very careful in this situation!
Credit Letter Value Update
The value of the letter of credit accompanies the adjustment of the consortium installments. In the contract, the price index is agreed to serve as the basis for the update, which takes place annually, 12 months after the first group meeting. The National Consumer Price Index (INPC), provided by the IBGE, and the General Market Price Index (IGP-M), presented by the Getulio Vargas Foundation, are among the most used indices.
Attention to this detail is crucial when signing the consortium agreement to ensure the purchasing power of the letter of credit in the future.
Use of letter of credit in conjunction with FGTS
As much as there are limitations to which the consortium member should pay attention, it is usually possible to use the FGTS in conjunction with a real estate consortium – including to complement the value of the letter of credit and expand the options to purchase real estate.
Possibility of anticipation of the letter of credit
The anticipation of contemplation only happens through bidding. Among the available modes we have the free throw, the fixed bid and the built-in bid. Keep following to understand better!
The free throw
This is the most common modality of bidding, in which the consortium member offers a free value, within its possibilities, referring to the number of installments that it wishes to anticipate. If your offer is the best that month, he can get your letter of credit in advance.
Just one detail: Of course the bid amount counts for the outcome, but timing is what defines your possibilities. In times of holidays and pay of 13th salary, for example, the bidding increases in quantity and value. Thus, the ideal is to plan to do so at strategic times outside these periods.
The fixed bid
In the fixed bid, the administrator sets the required number of installments for the bid, which is usually between 20% and 30%. In a 120-month consortium, for example, the 30% bid equals 36 installments.
It is noteworthy that there is no guarantee of contemplation here either. Thus, if more than one consortium member invests in the fixed bid, the tiebreaker must be used. Generally, the number of a quota is drawn so that the consortium member with the closest number is the winner.
The built-in bid
In this mode, it is possible to use part of the value of the future letter of credit as a bid. If you want to complete your own resources and have flexibility regarding credit receivables (you may receive a smaller letter without disrupting your plans), this is a good option.
Use less than letter of credit
There are 2 possibilities: one, as we have already said, is to opt for the embedded bid and receive your letter with a lower value than initially contracted in the consortium. The second is to use part of the credit to repay installments.
To emphasize: once contemplated, if you choose to purchase at a lower price, you do not lose the rest of the credit. This surplus can be used to settle part of the consortium, reducing the outstanding balance.
Risks of Buying a Contemplated Letter of Credit
As much as acquiring an already contemplated letter can be a tempting tactic to receive the good immediately, one must be careful as there are various risks in this business.
Many people want to sell their quotas because they didn’t do a good job. financial planning before entering the consortium. Thus, they can no longer afford the balance to be paid. But the truth is that salespeople invariably want to receive some benefit from this sale. For this reason, cards are usually sold for a higher price than what has already been paid. In addition, administrators often charge a transfer fee to change quota ownership, which further charges the transaction.
By buying a contemplated letter, you may then be closing an unattractive deal. Not to mention that this business is often a source of fraud. Many letters are counterfeit, have no contemplation, or report to consortium groups that simply do not exist. You must request the contract from the seller, contact the administrator to check the authenticity and the condition of contemplation of the document.
In addition, it is worth seeking information from the Central Bank about the license issuer’s operating authorization. Remember that the document templates are different between different administrators, but all of them must have Central Bank approval!
If you have a spare balance to buy a covered letter, it is likely to be much safer and more profitable to join a consortium group and use that money to bid. This way, you don’t have to spend too much and rest assured that you’re making a good deal!
As we have seen, the range of possibilities for a letter of credit is quite extensive. The consortium It is thus established as one of the best investment possibilities today, as it guarantees the recipient a very wide and flexible purchasing power.
If you didn’t know how contemplation worked, you now have an example of a letter of credit for buying your property, your car, or what’s on your wish list today! If you have any further questions, leave a comment here and share your questions with us!