The increasingly tight salaries, the mortgage you do not finish paying, the electricity and the increasingly expensive fuel, the shoes that get old, the phone, the gas, the food.
The list of bills does not stop growing and overwhelm you every month! You are not the only one. It is increasingly difficult to make ends meet without having to juggle. Asking for a payday loan has become a frequent solution for families who need a timely injection of money.
Payday loan, when problems tighten
While this amount may become the true float for the domestic economy, the long-term cost may end up drowning us. The banking entities have total freedom to apply the interests and commissions they consider and the small print of the contracts fatten the final invoice beyond what can be assumed by many. Be sure to examine all the conditions in detail before signing any payday loan.
The types of payday loan
There are many types. In general we can distinguish these:
1. The auto loan. Intended for the purchase of a vehicle and that usually offers a return period of between 5 and 8 years.
2. The study loan. Of smaller amount than the previous one and with return deadlines that do not usually go beyond 12 months, they are designed to pay university fees or study trips.
3. Loan reform. Logically it is intended to make changes in both homes and commercial premises, they are not usually large amounts and have short return deadlines.
4. Consumer loans. They are the most abundant since they can be used for all types of payments, from buying a new appliance to paying the last electricity bill. It is characterized by being available in a short time, with interests not very high (in some cases they reach 0%) but with high commissions if we do not pay the return fees on time.
5. Loan advance. Some entities offer their clients the possibility of advancing a part of their payroll while waiting for their company to make the payment. The amount, interest and repayment terms vary according to each entity.
Characteristics of payday loans
1. The requested quantity. It is usually much lower than mortgage loans and, except for the auto loan and the reform loan, it will cost us to find them for amounts beyond € 10,000.
2. The interest rate. As in the rest of financial products, it can be fixed or variable. The first eliminates uncertainty and allows the customer to know what he is going to pay at all times. The variable is modified depending on the evolution of the index that has been taken as a reference, which can be dangerous. .
3. The return terms. They vary depending on the amount requested. The smaller the loan amount, the shorter the repayment time. What does not usually vary is the very high commission that will be charged if you fail to meet the payment date. Keep that in mind!
4. The commissions. Some of these loans have a total and partial study, opening and cancellation commission, which we would add to those of default. Analyze them well because it is at this point where the entities make their August.
5. Flexibility. It is not usual for entities to change the financial conditions of the loan. Yes you can postpone a receipt by paying the corresponding commission and perhaps increase the amount of the fees, but they are usually quite rigid.
6. The interest rate. It is the price that the financial institution will charge for lending you the money. Do not look only at the nominal interest rate, but on the APR, a somewhat complex calculation, which includes the nominal interest rate and the fees that may apply to your loan, taking into account the term of the operation. It is a much more reliable indicator of the real cost of the loan.
7. Warranty Whoever hires a payday loan has to offer proof that he will be able to pay it. Generally it is enough to have a payroll or pension that serves as collateral, but each entity and type of loan can ask us for more, such as having a car or home owned.
If you are thinking of applying for a payday loan or a microcredit, remember that in Harry Potter we help you by comparing the offer of dozens of banking entities until you find the products that best suit you according to your situation and needs.