The payday loan is a type of loan where the installments are deducted directly from the salary of the person who made the loan, this rule is provided by law and is also one of the reasons that interest rates are much lower and the loan can be made with the dirty name. See flexexamples.com for an example
To obtain a payday loan, you must have a formal job and the company must offer this benefit in partnership with a bank, be a civil servant or a retired employee and apensioner.
What is the loan installment amount?
The debt limit is 35% of your net salary (since taxes and other contributions are discounted). If you earn $ 1000 net, the monthly discount cannot be greater than $ 350, for example.
Advantages and Disadvantages of payday loans
The payment method of the payday loan helps you to organize yourself, because as the debt installments leave your salary or benefit before this money falls into your account, you need to organize to spend less per month. In addition, you do not run the risk of missing the payment term and having to pay interest later.
Low interest rates, especially in times of high interest rates, can be quite advantageous. This is because their interest rates are around 25% annually, while in overdraft this amount reaches 460%.
Possibility of taking a payday loan with a negative name is not a rule, but many institutions usually open payday loans for those with a name in the list. As the payment of the borrowed amount is deducted directly from the employee’s or retired paycheck, the chances of default, even with a dirty name, are small. If this is your situation, payday loans can be a great choice!
Broader credit limit, up to 35% of the beneficiary’s salary.
In the payday loan, there is no way to delay or not pay a portion, as they are deducted directly from the money you receive, before it falls into your checking account.
You cannot negotiate the payment date of the loan installments, it is linked to the day you receive your salary or retirement, and there is no way to change it.
The operation cannot be canceled if you change your mind later, the only way the installments will no longer be discounted is to settle the payroll, in advance the payment.
It is essential to carefully analyze the terms of the contract and the impact of the installments on your budget, so as not to be “suffocated” with the installments of the payday loan.