More flexible than a home loan, easier to use than an appropriated credit, the payday loan is a type of loan that offers many benefits to its beneficiaries. Here’s a quick overview of Creditstair’s tips on payday loans.
What is a payday loan?
The payday loan is a credit belonging to the category of consumer credit by which a loan is granted by a credit institution or a bank to a borrower.
A loan to use without supporting documents
Unlike real estate loans, which are used to finance a real estate project, the payday loan is characterized by the fact that it is not dedicated to a particular project. This means that the beneficiary can use it as he wishes, without providing proof to his bank or credit institution.
The payday loan can be used for various projects such as recreation, a vehicle, housing, or even simply to increase its cash to avoid, for example to pay too heavy agios in case of overstaying bank overdraft.
How does the credit repayment work?
In concrete terms, the borrower undertakes to repay each month, at fixed or variable maturity, a portion of the capital borrowed, as well as the interest that constitutes what is called the cost of credit. The portion of the capital and the interest on this part of the capital are grouped together to constitute the monthly installment to be repaid.
A loan that can be repaid early
Entering a payday loan can be interesting for borrowers who have some visibility into their future repayments. The repayment of a payday loan can be made in advance as well for a partial refund as total.
This reimbursement will generally be made in return for a penalty, the amount of which may not exceed 1% of the amount of the credit when the remaining term to be covered is greater than 1 year, and 0.5% if the remaining term to be repaid is less than at 1 year.