Learn How the New FGTS-Guaranteed Credit Program Works in Brazil

Starting today, Brazilian workers with formal employment contracts can apply for loans using their FGTS (Fundo de Garantia por Tempo de Serviço) as collateral. This is part of the new “Crédito do Trabalhador” program, designed to offer better credit conditions and help workers transfer more expensive debts.

📲 How Does It Work-Guaranteed

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• Applications must be submitted through the CTPS Digital app (Digital Work Card).

• From April 25, workers will also be able to apply at partner banks.

• Workers specify the desired loan amount, and the system presents offers from various financial institutions— like an auction— allowing comparisons of interest rates and payment terms.

• Loan installments will be automatically deducted through eSocial, with deductions capped at 35% of the worker’s salary.

• Up to 10% of the FGTS balance can be used as collateral, plus 100% of the termination fine in case of dismissal.

💰 Benefits of the New Program-Guaranteed

• Lower interest rates than traditional payroll loans.

• Real-time monitoring of installments via the app.

• Possibility to transfer high-interest debts (credit cards, overdrafts) to this cheaper loan option starting April 25.

• Managed by the Credit Operations Management Committee, which will also monitor and limit interest rates.

📈 Expert Advice-Guaranteed

Financial planning expert Letícia Camargo highlights that this program is ideal for workers struggling with high-interest debts, especially those with credit card or overdraft loans. The lower rates can provide significant savings.

However, she cautions retirees who still work and have existing retirement-based loans. In such cases, the traditional retiree loan may offer better conditions due to lower interest rates.

Letícia also advises borrowers to check the CET (Total Effective Cost) of each offer before choosing, ensuring the best deal.

⚠️ Warning Against Over-Indebtedness

“It’s essential to avoid taking on new debts that could jeopardize your future budget,” Letícia warns. For emergencies, she suggests retirees consider their special loan programs. For long-term plans like buying property, other financing options might be better.