All translations use a combination of formal equivalence and dynamic equivalence. A good way to demonstrate this is to look at how the King James Version translates the phrase mee genoito in Paul's epistles. A literal rendering of this phrase is "may it not be." The KJV is generally quite literal, but it consistently renders this phrase "God forbid." That's very dynamic!
Conversely, there are many places where the NLT is quite literal in its renderings. After all, there's no reason not to be literal if a literal translation communicates clearly to the English reader. For example, Psalm 118:1 is translated very literally in the NLT: "Give thanks to the LORD, for he is good! His faithful love endures forever."