The payday loan … borrow with a fixed interest rate
The payday loan is a loan form that is known as one of the most favorite forms of loan. The payday loan is therefore often taken out and this is of course not for nothing. This loan form has many advantages over other loan forms. You take out a payday loan to pay for a study, make a long trip or buy a new car. After applying for the loan you will have the amount in your account quickly, on average this will take a few working days. The payday loan is also called personal credit and has been around since the 60s.
Payday loan interest
The interest on a payday loan is fixed throughout the term. This is a reason for many consumers to take out a payday loan, and certainly if you go for certainty. Once you have taken out the loan, you know what interest you will pay each month. And therefore also what the loan will cost you. No surprises, but certainty is what it’s all about. If you take out a loan now, you will benefit from the extremely low interest rates. If you want to pay the lowest interest then you will have to take the time to compare the lenders.
The payday loan is a maturing credit, which means that you fully pay off the borrowed amount after a certain period (term). That personal credit is so popular is partly due to the certainty. The payday loan, together with the revolving credit, is extremely popular when it comes to borrowing in the Netherlands. However, the revolving credit is taken out by people who always want to have money in hand during the term of the loan. With the revolving credit you can always withdraw and repay money. Withdrawing money is possible up to a certain credit limit.
Take out a payday loan
If you are going to take out a personal credit, negotiate with the bank beforehand for the amount that you are going to do this for. You can determine in advance how you will repay the loan, so how much you can miss per month to repay the loan. You repay the loan in fixed monthly installments. This way you have an overview and you already know in advance when the loan will be paid back in full to the bank. This is also one of the reasons that many people take out a payday loan when buying a car. After all, it is not wise to take out a loan for a car or other product that does not last for decades, for which you have to pay back 15 years, for example.
Benefits payday loan
What are the benefits of a payday loan? As we have already described, the interest that is fixed throughout the term is a reason why many people go for a payday loan. Another advantage is the certainty, because you know exactly what you pay off each month and also when you have repaid the loan.
Cons payday loan
Are there any disadvantages to a payday loan? Yes there are of course too. If you want to pay off the loan earlier after a few months or years, you will be fined by the lender. If you want to refinance the loan, you cannot do this without a penalty. The fine may be a maximum of 1% of the amount that you pay off prematurely, provided that the loan runs for at least one year. Incidentally, it is not the case with every lender that you will be fined for repaying your loan earlier.
If you are going to take out a loan, you will also have to go through the conditions. For example, see what happens if you should die if the loan is still running. Most credit enhancers will cancel the loan in the event of a death, but it is good to read it again just to be sure.
Whether you take out a personal credit or a revolving credit, always compare the providers first. If you have found some lenders, you can request different quotes. When comparing you pay attention to the interest and the terms of the loan. The interest is an important point since 1 or 2 percent less interest you can save hundreds of euros on an annual basis.