How much interest is paid on unsecured loans? These are the rates, terms and requirements

The Bank of the Ecuadorian Institute of Social Security (Biess) granted 81,927 mortgage loans at 11% interest in January 2022, that is the reduced rate that is applied temporarily to support economic reactivation and is the most used.

The interest rate reduction applies to new credits requested by affiliates and retirees with terms of 13 to 48 months, and will be in force during the first semester of 2022. Before, 14% was charged.

The interest for unsecured with shorter terms, it is maintained in the following:

• 6.50% in credits to pay up to six months.
• 7.50% in credits of seven to nine months.
• 8.50% in credits of ten to twelve months.

For the novations These rates also apply, but for a longer term, the 11% no longer applies, but rather the following percentages:

• 11.97% in renewed loans with a term of 13 to 24 months.
• 12.86% in renewed loans for a term between 25 and 36 months.
• 14% on renewed credits from 37 to 48 months.

For retirees and pensioners, interest rates range from 6.50% to 12.84%, depending on the months in which the unsecured will be paid.

In January 2022, 194,162 unsecured loan operations were carried out for a total of $258.8 million. With the rate of 11%, Biess served the majority of affiliates who were financed with these credits. 42% of the operations of the month were made in this range and in amount it represents 38%. The average amount granted at this rate is $1,186, indicates the institution.

20% of the operations were given in terms of ten to twelve months and therefore at a rate of 8.50%.

“The idea is that with these credits members and retirees can start a business or refinance their debts,” and it is expected that the private financial system will also be encouraged to reduce interest rates somewhat for the benefit of citizens, said the president of the Council. Director of the IESS and the Biess board, Francisco Cepeda, when the measure to reduce the rate for six months was announced.

Who applies?

• Affiliates in a dependency relationship
• retirees
• pensioners

How much does Biess lend?

The affiliate may request up to 95% of the amount accumulated in their reserve and/or severance funds. Depending on your ability to pay, you may request up to 80 unified basic wages for workers in general: $34,000.

You can commit up to 50% of your income as a monthly dividend.

The retiree may request an amount of up to 80 unified basic wages of the worker depending on their ability to pay according to the following detail:

– 40% of your retirement pension up to 78 years of age. From February 2, 2022, it was announced that this payment capacity would be raised to 50%.

– 35% of your retirement pension from 79 years to 83 years of age.

– 30% of your retirement pension over 83 years of age.

Requirements

• Possess real guarantees (reserve funds and/or severance pay) in the IESS.
• Have a minimum of 24 contributions.
• Be an active affiliate.
• In the case of retirees and pensioners, be in the enjoyment of a pension granted by the IESS.
• Your current employer must not belong to the peasant social security.
• Not have a pending application for severance.
• Your employer must not be in default with the IESS.
• Have a bank account registered and authorized by the IESS.
• Not having a record of the date of death in the IESS.
• Not have credit in arrears with the IESS or Biess.
• If you are an employer, have no pending obligations with the IESS.
• Biess validations.
• Not having a mortgage loan in process.
• Not have pending instrumentation expenses in a mortgage loan application initiated and not completed.
• Not having proof pending payment.
• Not have unsecured credits in process.
• Not having valid credit with the IESS – previous HOST system. (I)