Consórcio

What it is

A consórcio is a Brazilian group-purchase plan with no interest, only an administration fee. A group of people pay monthly shares and each month one member is awarded the credit, by draw or by bid.

It also works as a down payment strategy: the awarded credit letter becomes cash buying power, which usually earns a discount in the negotiation.

When it makes sense

• The purchase can wait and you want to avoid interest
• You have the discipline for a monthly instalment but no down payment
• You are able to bid to be awarded sooner

How it works

• GoalWe define the asset, the amount of the credit letter and the term.
• AdministratorI compare administration fees and bidding rules.
• JoiningDigital contract and entry into the group.
• StrategyI follow the bids until you are awarded.

What you will need

• Photo ID, CPF (Brazilian individual tax ID) and proof of income
• Proof of address

The list can change with the institution and the size of the deal. I confirm what is actually required before you gather a single document.