Consortia are a great way to purchase goods. When contemplated, you receive a letter of credit and can buy the dreamed vehicle or property, observing the category that your contract was signed.
One of the most common questions is how credit value change works. To answer all the questions on this topic, follow the text!
What is the change in the value of the letter of credit in the consortium?
Because it is something that is done thinking long term, it may happen that those who hire a consortium, in the course of the plan, have other needs. For this reason, most consortium administrators make it easier to change the value of the letter of credit until contemplation, provided that the group provides other credit ranges.
If you do not know yet, the letter of credit is an instrument that allows the acquisition of the desired object from contemplation. Its value is determined by a reference asset, and all installments and other obligations of the group are calculated from it.
The consortium member, when contemplated, may acquire any good, regardless of make or model, provided that the vehicle or property is in the same category as that referenced in the contract.
For example, it is not possible to buy a vehicle with a real estate pool quota or vice versa. To avoid inconvenience at the time of purchase, you need to know what are the main categories of products that can be purchased with a consortium:
- services (travel, medical and dental procedures and renovations)
- real estate (construction, renovation, houses and apartments that are still in the plant or land)
- movable property (usually refers to vehicles, but may be appliances, for example, if the contract stipulates so).
What to do to change the value of the letter of credit?
If it is in their interest, the consortium member may change the value of the letter of credit prior to contemplation by choosing from the pre-existing value ranges in the consortium group to which it belongs and observing the policies of the administrator.
The process of changing the value of the letter of credit will be reviewed by the administrator, who will verify if the group will support the new amount, recalculate the new installment and also verify the client’s ability to honor the new commitment.
The consortium member has the option to purchase products with values higher or lower than the letter of credit. If the option is for a higher value product, the consortium member will be responsible for paying the difference. If the opposite happens and the new good has a lower value than the stipulated in the contract, the difference can be used by the consortium according to some rules:
- payment of financial obligations under the purchase of the good or contracting of the service. The total limit of 10% of the credit amount must be respected. Expenses with property transfers, taxes, notary registrations and insurance may be paid, as established by Best bank Circular No. 3,432 of February 3, 2009
- discharge of installments falling due in agreement with the terms of the contract
- return of the money to the consortium member when its financial pending with the group is fully settled.
So these rules do not surprise you when you need to exchange the good, it is essential to be aware of what the contract says when signing it. See the conditions provided and do not hesitate to contact administrator if in doubt.
This is an attitude that will surely avoid problems in the future and allow you to enjoy the full benefits of the consortium.
In what situations can the exchange of value of the card be advantageous?
As you already know, the consortium is a way to plan the acquisition of your equity. Therefore, the possibility of changing the value of the letter of credit is a guarantee that payments will always ensure a good one that is of interest to you, as long as it respects the category that was agreed at the time of contraction.
This flexibility can be harnessed in many ways. If your family is going to grow up and the car you want at the beginning is no longer able to meet your needs, you can switch to a larger vehicle. The same condition applies to real estate.
By changing the value of the letter of credit it is also possible to adapt the consortium to your new standard of living, something that can change with the conquest of a new job, for example.
Finally, the change in the value of the letter of credit may contribute to its financial balance as it may be possible to use a portion to cover the cost of purchasing the property or to settle any other outstanding issues with the consortium.
Thus, this value is not a hindrance when hiring a consortium. As it is possible to make the change of good in the consortium, there will always be a way to make it fit your new goals without damage.
But for this to always happen in the best way for you, the manager, and the other members of the group, it is critical to be aware of and follow all the rules, right?
Got a question about it or are you considering hiring a consortium? Read our article and learn which details deserve more attention before signing the contract!