The payday loan is the ideal type for those looking for lower rates and don’t want to worry about missing the payment dates.

Applying for a loan is a quick and efficient way to pay off your debts – or at least replace them with cheaper options. Under the umbrella of the term “loan”, there are numerous credit application modalities. One is the payday loan. But after all, what is the payday loan?

How does payday loan work?

money loan

Like any type of credit application, the payday is subject to the approval of financial institutions. Banks and financiers need to know if you are a good payer, if you can afford the installments of this order, etc.

This type of loan, however, is a bit easier to get than the others, as the installment payment is made indirectly, taken directly from your payday or benefits.

Does that mean I don’t have to pay?

Of course you need to, but you don’t have to worry about the due dates and the “action” of getting your ticket and paying. The amount of the installment will already come discounted in your source of income, be it salary or benefit. Soon you will have your net cash in hand, with the debt already paid.

To apply for this type of loan, the process is basically the same as any other. Separate the following documents:

  • ID
  • CPF
  • Proof of address
  • Paycheck

Take it to the bank of your choice and apply for your loan with the manager. After reviewing your credit and profile, your institution may or may not approve your request.

Did you know that payday loans are one of the easiest ways to get approved? Yes, and this is due to the fact that the chance of the customer delaying the payment is practically nil. How the discount happens even before your paycheck or benefit arrives in your hands. You are unlikely to forget to pay off your loan installment. This collateral makes it easier to acquire credit because you fit the profile of the “good payer” in the eyes of financial institutions.

How do banks look at payday loans?

payroll loan

In times of economic crisis, it is also the preferred mode of banks and financials, as the number of delinquent people (who do not pay the debt) usually increases, which is not the case here, as the guarantee of payment is accurate.

To give you an idea, according to the newspaper Folha de Sao Paulo, the volume of payday loans offered to seniors in 2018 increased by 16% – from $ 4 billion to $ 30.2 billion! That’s a lot, which proves that you don’t have so many bureaucracies to get this credit.

As well as unlike other types such as refinancing, you do not need an asset to back your claim. Just be within your profile and have a consistent financial history.
The advantage of payday over credit card or overdraft, for example, is the interest rate, which is around 2.5% per month. It’s a big difference compared to the 15% credit card, don’t you think?

I want to make a payday loan!

Seriously, with that much advantage, who doesn’t want to, right? However, as not everything is rosy, payday loans also have their disadvantages. One of them is the profile constraint, meaning not everyone can order it.

To be able to make this request, you must have a fixed monthly income and ways to prove it. Therefore, those who have the right to request the payday are:

  • INSS withdrawals and pensioners;
  • Public servants;
  • Military of the Armed Forces;
  • Workers of some private companies.

Another disadvantage is the impossibility of changing the date the installment is charged.

payroll loan

Because it is tied to your monthly income, it is deducted on the day your salary or benefit between your account – neither before nor after. As long as you do not pay off your debt, you will have access to less money than you used to, but this happens in the case of any loan, not just payday loans.

Likewise, these are the two most significant disadvantages of this type of credit – overall, the advantages turn out to be much larger and more cost-effective. So if you are part of the group that can apply for payday loans, enjoy.

Remember that rates are fixed, avoiding surprises at the time of paying, and you get an amount whose installments commit up to 30% of your monthly income.

It’s just that I’m negative…

No problem! Another advantage of this mode is that, even if negated, you can apply for your loan. Of course you will also go through credit analysis, but as the discount installment happens directly at the source.

On the other hand, if you are after debt settlement, realize some dream or travel, invest fearlessly in payday loan! If you have any questions or tips, talk to us – we are here to help you get the best loan experience possible.

Even more, if you have already tried to pay and have your request denied, you need not be sad or desperate. There are other modalities that can serve you as much as the payday loan. Have you considered trying the personal loan?