At the time of suffocation, taking a loan is the most obvious way out for those who need emergency money, right? However, there are several types of loans that can be made. And all this transaction needs to be very well thought out.
In recent years, payday-deductible loans have grown significantly among those in need of credit. Because it offers several benefits, this type of credit is in high demand at financial institutions.
Interested in learning more about the topic? So, read here everything you need to know about the risks and benefits of payday loans!
What is the payday loan?
The payday loan is one of the most common types of credit available on the market. Here, the total amount of debt is paid for in discounted amounts directly from the person’s paycheck or retirement — which makes life easier for both the lender and the recipient.
Normally, these loans are repaid in up to 72 months, and can be taken at most financial institutions.
What are the benefits of this modality?
Low interest rate
Especially in high interest times, the payday loan can be quite advantageous. This is because their interest rates annually are around 25%, while in overdraft this amount reaches 460%.
In addition, it is important to remember that the interest rate on these loans is fixed, that is, the person who signs the contract already knows how much he will pay on interest. Therefore, it is ideal to do research in various financial institutions in order to find which proposal is most advantageous for you.
Possibility of borrowing loan with negative name
This is not the rule, but many institutions often open payday loans for those with the name in Serasa. Since repayment of the loan amount is directly deducted from the employee’s paycheck or retired, the chances of default, even with the dirty name, are slim. If this is your situation, the payday loan can be a great choice!
Broader credit limit
The credit limit for payday loans is up to 35% of the payee’s salary. Therefore, this type of credit is usually used to pay the most urgent debts, which demand a quick liquidation.
And what are the biggest disadvantages of payday loans?
Payment without (re) negotiation of dates
Paying off payday loans is perhaps its biggest disadvantage. Because it is automatically discounted, it is not possible to negotiate dates, and the possibility of not paying a portion if you need that money.
If you take out a payday loan, the best thing to do is to consider, your real income for the period, the net value of your salary or retirement minus the amount of the installment to be paid off.
There are a limited number of people who can do it.
To be directly deducted from the payday, only the registered workers, pensioners and retired employees of the INSS and publics can request a credit. If professional with signed portfolio, the company you work for must have an agreement with the financial institution where you want to take out
Since INSS pensioners and withdrawals, as well as civil servants, are much better off with banks as they are considered to be people with greater financial stability. In this way, they are able to achieve better payday loan proposals in the financial entities.
If you are not included in this group, one possibility is to look for a low interest loan. You can compare various possibilities and get personal loans through the GuyToPay website and the application.