Cheaper and more flexible plans. These are the two main features of payroll loans, considered one of the simplest and safest means of obtaining credit. With this, the environment is providing many opportunities, especially for those who need money. And good condition.
But after all, what is this payday loan and how does it work? Well, let’s explain everything.
The first feature of a payday loan is that it came with the intention of reducing borrowing. Mainly of workers, retirees and public servants. The idea, then, was to do this through a form of financing with lower interest rates.
Thus, the payroll loan has become the least bureaucratic and cheapest means of acquiring credit. Besides being one of the best options for those who need money in the short term.
Credit can be purchased through banks and financial institutions. The amount, however, is 35% of the monthly value of the salary, retirement or pension. That is, if a person has a net monthly income of $ 5,000, will get $ 1,200 in credit. In this case, this value can only be used through a specific credit card.
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In this case, the installments are deducted directly from your monthly income. That is, a part of your money is compromised before the money reaches your account. That’s why you need to make a good financial strategy so you do not increase your spending on interest payments.
Therefore, at the same time that he saves, it can also harm you. Because payday loans direct B R I D G E are one of the cheapest credit lines, it helps a lot. However, caution is needed when using it.
And this lower interest rate exists because the payment of the portion is discounted in the sheet. Even because it is known that interest is linked to the size of the risk of someone who lends some resource.
However, it can be considered safer for those taking the credit and for the person who lends the money, since payment is guaranteed. So the consumer does not run the risk of going into revolving credit. And neither of the banks keep their hands shaking.
The payroll loan, then, has a ceiling for interest rates. That is, there is a maximum amount that can be borrowed, which is called Total Effective Cost (CET).
Advantages of Payroll Loan
In addition to the lower interest rates, as already mentioned, the loan presents two other main advantages:
- Ease of contract: Because the bank already has the guarantee that the amount will be paid, there is so much bureaucracy in the hiring and release of the money. The idea is to keep your debts up to date and not to exceed 20% of what you earn. The case is only different if you are financing a property, passing the percentage to 30%.
- Deadlines: With the payroll loan, institutions tend to increase the terms. So much so that there are banks that even offer 120 months (ten years) to pay. There is also in the issue of the contract. In this case, the deadline is short and can be done in hours.
Disadvantages of payday loan
- Losing your job: If you are unemployed, you will have to repay the loan at one time. Or exchange the consigned loan for another.
- Term: The long term repayment means that you are dealing, too, with a long term debt.
- Postponement: Since the discount is made directly from the payment, it is not possible to delay or suspend the debt. Therefore, you will find it more difficult to renegotiate the loan if you need to.