How Rising Default Rates Affect Your Personal Credit

What is happening with credit in Brazil?

According to Valor Econômico, the default rate on free credit reached 6.2% in May 2026, with families hitting 7.6%. This indicates more people are struggling to pay their debts. In response, banks and consumers are seeking safer and more predictable alternatives, such as collateralized loans, which include vehicle-backed loans and home equity loans.

In a scenario where the average interest rate on free credit for individuals reached 62.8% per year, it is clear that people are looking to lower costs and reorganize their finances. Collateralized loans allow access to larger amounts and potentially lower interest rates since financial institutions have an asset that can be seized in case of default.

Why does this matter for you?

If you earn a salary and need to pay bills, you should pay attention to these changes. The increase in default rates could mean that more people are facing financial difficulties, which can impact the economy as a whole. Furthermore, if you are considering a loan, it’s essential to understand how different modalities work.

For instance, by opting for a vehicle-backed loan, you might secure lower interest rates. Suppose you need R$ 20,000. With a traditional loan, the interest could be 62.8% per year, resulting in a monthly payment of nearly R$ 2,000. However, with a collateralized loan, that payment could drop to R$ 1,200, depending on the contract terms.

What can you do?

The first rule is always to analyze your financial situation. Here are some steps you might consider:

• Assess your debts: Write down everything you owe and the interest rates for each debt.
• Consider reorganizing your debts: If you have high-interest debts, a collateralized loan might be a solution. But make sure to research thoroughly.
• Maintain an emergency fund: Don't commit all your income to loan payments. The ideal is to have at least 3 to 6 months of expenses saved.
• Understand the Total Effective Cost (CET): Before signing any contract, compare all costs involved, not just the interest rate.

Connecting with your financial organization

This current economic situation highlights the importance of a well-structured financial plan, like the 50/30/20 method. With this model, you divide your income into 50% for needs, 30% for wants, and 20% for savings and investments. If you have debts, consider temporarily adjusting this proportion to prioritize paying them off.

The ADXIS platform can help you organize your finances and create a planning that accounts for these new credit realities. The important thing is to stay informed and prepared for market changes.