Payday loans are formalities that are kept to a minimum and must be completed. Consequently, borrowing money does not require spending a large amount of time to gather the necessary documents, fill out extensive applications, etc. Everything is done extremely quickly and efficiently, which is the undoubted advantage of such loans.
In the vast majority of cases, parabanks that deal with payday loans do not expect a person who wants to borrow money to provide a certificate of employment and earnings. Thanks to this payday loans are available to people working without a contract or employed on so-called junk contracts. In the case of banks that grant loans, such a simplified procedure is unfortunately not used. Therefore, many people have no chance of getting a loan despite the fact that there would be no problems with its repayment.
Speaking of payday loans, one cannot forget that in their case the credit decision is taken surprisingly quickly. Most parabanks that deal with providing payday loans make a credit decision within a maximum of one hour. Thanks to this, a person who needs money gains it in a very short time.
Payday loans have a very large group of supporters. This is no wonder when we look at the advantages that such quick loans have. Let’s see why it is worth choosing just payday loans and in what respects it is better than traditional bank loans.
What is the difference between a loan and a loan?
Chwilówki are so-called quick loans, whose popularity is increasing every year. More and more people who have no chance of getting a bank loan decide to borrow money in a so-called parabank. Chowniki have a whole host of advantages that translate into the fact that they are so popular. However, it should be remembered that extreme caution is recommended with them. Otherwise, you can quickly fall into a debt spiral, from which it is not so easy to get out. What to watch out for when you pay for payday pay?
Late repayment is an element of payday pay, which can really give us a headache. Everyone who is considering taking a payday loan should know that not paying installments on time is a need to pay considerable interest. As a result, we will give a much larger amount to the parabank than the one we borrowed. For this reason, it is important for payday loans that each installment is repaid on the agreed date. This will avoid really big extra costs.
The biggest disadvantage of payday loans is above all a really high interest rate. The total annual interest rate is much higher for them than for traditional bank loans. What does this mean for the customer? To the parabank we have to give back a much larger amount than the one we decided to borrow. That is why it is so important to decide more wisely on the amount you want to borrow. You should seriously think about whether we can pay off the debt.
Admittedly, parabanks already allow the so-called credit holidays, but such a solution is really expensive. For deferring the repayment date of subsequent installments, one should pay. This makes the loan more expensive again. What’s more, the parabank may of course refuse to grant us credit holidays.
Why do people take payday loans?
In the case of a debt spiral, it is important not to take further loans or credits. They will not help in this situation. Instead, they will increase debt and the number of creditors. Therefore, an attempt to negotiate with existing creditors is definitely a better option. With a little willingness on their part, it will be possible to agree on a repayment schedule such that the debt will gradually decrease.
If you have fallen into a spiral of debt, you need to carefully check the issues related to the limitation of debt. It may happen that we have a bit of luck and it turns out that the debt has expired. In this situation, paying off the debt is not an option. It must be remembered that the claim is time-barred after ten years, and interest after three years.
It is always a good idea to try negotiating with the creditor. It should be remembered that they do not have to bring the expected effect, but they are a much better solution than waiting for the case to be in court and a bailiff knocking at our door. There are a few rules to keep in mind when starting negotiations. First of all, under no circumstances may you take a claim attitude, raising expectations of cancellation of debt. However, it is good to present your life situation explaining exactly why financial difficulties arose. You also need to think about the amount we are able to pay to your creditors’ account on a monthly basis.
Taking out loans without thinking
It can lead to entering the so-called debt loop, from which it is not so easy to exit. Here are a few tips on what to do if at some point you fell into such a debt loop. However, it should be remembered that the declaration of consumer bankruptcy is connected with court proceedings. It is possible only if the premises specified in the relevant provisions take place.