Fintech or bank? Find out where your personal loan costs less

What nobody tells you about loans from fintechs and banks

If you’re thinking about taking out a personal loan, you’ve probably already asked yourself: is it better to get credit from a fintech company or a traditional bank?

With the digitalization of financial services, fintech companies have started competing with large banks by offering online loan applications and promises of lower interest rates.

But are they really cheaper? The answer is: it depends on your financial profile, credit score, and the offer you receive.

In this guide, you’ll understand how to correctly compare the options, which costs to analyze, and where the best opportunities to save money are usually found.

Fintech or bank: which usually offers the cheapest loan?

The quickest way to answer is: neither is always cheaper.

Currently, both traditional banks and fintechs use advanced risk analysis models to define the rates charged to clients.

The final cost varies mainly according to:

• Credit score;
• Financial history;
• Proven income;
• Relationship with the institution;
• Amount requested;
• Payment term.

According to data from the Central Bank of Brazil, the rates charged on personal loans vary considerably among authorized financial institutions.

What is the credit scenario in Brazil in 2026?

June is usually a period of higher demand for credit in Brazil for several reasons:

• Receipt of the first installment of the 13th salary by retirees and pensioners;
• Financial planning for July school holidays;
• Consolidation of debts accumulated in the first semester;
• Preparation for expenses in the second semester.

Furthermore, many Brazilians are seeking loans to reorganize their budgets in light of the high financing costs observed in recent years.

Therefore, this is the period most likely for consumers to take out loans from financial institutions.

Differences Between Fintechs and Traditional Banks

How do traditional banks work?

Traditional banks have decades of experience and offer a wide variety of financial products.

Advantages:

• Greater variety of credit lines;
• In-person service;
• Possibility of negotiation for existing clients;
• Integration with checking accounts and investments.

Disadvantages:

• More bureaucratic processes;
• Generally slower approval;
• Less flexibility for some client profiles.

How do fintechs work?

Fintechs are digital financial companies that use technology to simplify processes.

Advantages:

• Fully online application;
• Fast approval;
• Less bureaucracy;
• Simpler digital experience.

Disadvantages:

• They don’t always have in-person service;
• Some may charge higher fees for profiles considered higher risk;
• Less variety of financial products.

What do major American publishers teach about personal loans?

Analyzing recent content published by NerdWallet, Investopedia, CNBC Select, and Bankrate, a clear pattern emerges:

The secret isn’t choosing between a bank or a fintech. The secret is comparing offers.

The main factor considered by consumers is the total cost of the loan, not just the advertised monthly payment.

This approach is still underexplored in Brazil, where many consumers focus only on the installment amount.

How to find out which loan really costs less?

Analyze the CET (Total Effective Cost); it’s the most important indicator because it includes the following fees:

• Interest;
• Fees;
• Insurance;
• Taxes;
• Mandatory charges.

Two offers with the same interest rate can have significantly different final costs due to the CET.

Run simulations at at least three institutions

Experts recommend comparing multiple offers before signing a contract.

The greater the competition between institutions, the greater the chances of finding better conditions.

Avoid deciding solely based on speed

Many fintechs can release funds in a few hours. However, speed does not mean savings.

Extremely fast offers should be carefully compared to avoid hidden additional costs.

When might a fintech be the best choice?

A fintech can be advantageous when:

• You need money quickly;
• You have a good credit score;
• You seek a completely digital experience;
• You want to avoid travel and bureaucracy.

However, it is important to consider your needs to better understand when to choose a fintech.

When might a bank be the best choice?

Banks tend to stand out when:

• The client has a long-standing relationship;
• There is frequent account activity;
• Salary is received through the institution;
• The bank offers exclusive campaigns for account holders.

Main mistakes that increase the cost of a personal loan

The most common mistakes include:

• Accepting the first offer received;
• Ignoring the CET (Total Effective Cost);
• Taking out more credit than you actually need;
• Choosing excessively long repayment terms;
• Not checking for hidden fees and insurance.

Author’s Opinion

After analyzing data from the Brazilian market and trends observed in the main international publishers of personal finance,

it’s clear that the correct question isn’t “fintech or bank?”, but rather “which institution offers the lowest total cost for my profile today?”.

The credit market has become more competitive in recent years.

This has benefited consumers, who now have more options for contracting and greater transparency in the conditions offered.

Regardless of the choice, the best strategy remains to research, simulate, and compare proposals before signing any contract.

A few minutes of analysis can represent significant savings over the coming months or years.

Written by

Juliana