A Payday Loan is defined as the fact that the borrower is free to use the funds he has obtained from a credit institution. No proof of use of the sum is asked of him in this sense. Thus, he can use it for any purpose: finance an event, procure services, or even invest in real estate. More of this story: povertyintheoc.com
A Payday Loan: how does it work?
The request for a Payday Loan is free. Banks do not need to know the reason for using the funds, unlike the demand for allocated credit such as work loans, motorbikes, cars, etc. no need for a quote from a professional or an invoice: the procedures are lessened, which in a sense can come to speed things up. But beware, it is not that it is easy to obtain. Accepting or refusing such a loan is part of the institution’s discretion. Depending on the quality of your borrowing profile, you increase or decrease your chances.
What are the advantages ?
It is an effective financing solution for current consumer needs and for projects requiring a significant investment. This is the case with the purchase of goods, the renovation or even the construction of a house. Everything is possible as long as the ceiling for a Payday Loan can reach 75,000 dollars.
In addition, it is always possible to negotiate rates by modulating the duration of the loan and reducing the capital required from the bank. This is why a personal contribution is never a bad idea.
Faster procedures, the possibility of repaying the loan in advance without paying a penalty at certain banks: at first glance, the Payday Loan seems to be the best solution for becoming a homeowner. But what is it really?
What are the disadvantages ?
There are some drawbacks to taking out a Payday Loan in Belgium. In particular, the ceiling that the banks can grant you is conditioned by your possibility of debt and repayment. According to statistics, the Payday Loan is the most inaccessible banking service. And for good reason, banks are very demanding in terms of the quality of requests. It is not uncommon for the amount that will be granted to you not to match the planned investment.
In addition, it is customary to say that in addition to being difficult to obtain, the Payday Loan is more expensive than a restricted loan. Rates are negotiated up to 12.50% nowadays with Belgian banks.
A Payday Loan is often a formula chosen out of necessity when an affected loan has not been possible. As in the case of an individual who wishes to carry out work, or who needs a loan to buy housing, or rent apartments, but who does not want to be satisfied with the services of a single craftsman. The amounts loaned are very variable and the rates expensive. You have to know how to calculate revenues, debt ratios and risks before getting started. Despite this, the risks of having your request refused are significant.