More flexible than a mortgage, easier to use than a restricted loan, the payday loan is a type of loan which offers many advantages to its beneficiaries. Here’s a quick rundown of our advice on payday loans.
What is a payday loan?
The payday loan is a credit belonging to the category of consumer credits by which a loan is granted by a credit institution or a bank to a borrower.
Ready to use without supporting documents
Unlike real estate loans, which are intended 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 its beneficiary can use it as it sees fit, without providing supporting documents to its bank or credit institution.
The payday loan can therefore be used for various projects such as recreation, a vehicle, housing, or even simply to increase your cash flow to avoid, for example, paying too heavy agios in the event of overdraft.
How does credit repayment work?
Like any loan, the payday loan obliges the subscriber to repay the amount borrowed, but also all ancillary costs such as loan interest, insurance costs or files.
Concretely, the borrower undertakes to repay each month, at fixed or variable maturity, part of the capital borrowed, as well as the interest which constitutes what is called the cost of credit. The part of the capital as well as the interests of this part of the capital are combined to constitute the monthly payment.
A loan that can be repaid in advance
Taking out a payday loan can be interesting for borrowers who have a certain visibility regarding their future repayments. The repayment of a payday loan can be made in advance for both partial and total repayment.
This repayment will generally be made in return for a penalty, the amount of which cannot exceed 1% of the amount of the credit when the duration remaining to be covered is greater than 1 year, and 0.5% if the duration remaining to be reimbursed is less. at 1 year.
You can use a payday loan for just about anything: debt consolidation, medical expenses, moving costs, home improvement projects, a car or your wedding. When you’re approved for a payday loan, you receive a lump sum of cash to spend however you’d like with no restrictions from the lender.