You have probably already read the term “payday loan” in ads offering consumer credit. Why this mention? Is there a difference between payday loan and consumer credit? Which projects are financed by a payday loan? The Credit Guide reviews the terms of this funding.
Payday loan, how does it work?
The payday loan is simply a type of consumer credit, just like the credit assigned or the revolving credit. With however its own specificities. For example, when applying for a payday loan from a credit institution, you are not required to justify your application, unlike the credit assigned. The key word with the payday loan is therefore “flexibility”.
What can be financed with a payday loan?
Everything… provided that you comply with the legal provisions. It can be the acquisition of a vehicle, the realization of work, the preparation of a marriage or a birth, the purchase of electrical appliances or a departure on vacation. Better, since you do not have to explain the source of the funds, you can very well finance two projects at the same time, provided you have the necessary funds.
How it works? You apply for financing from the lender, then your file is analyzed. If your application is accepted, you receive the funds you spend as you see fit.
There is however a black spot: the property or service financed is not “attached” to the loan, you are not protected in case of a glitch. For example, if a vehicle financed by a payday loan is not delivered or if it is defective, you will still have to repay it.
What conditions are necessary?
These are the same as for any consumer credit. The payday loan can finance a good between € 200 and € 75,000. In terms of duration, this is a minimum of 3 months.
Prepare your project with a payday loan simulation
As with all types of loans, a loan commits you. We advise you to prepare your application for financing by performing payday loan simulations. For example, you can estimate the amount of your future monthly payments, so why not? Our calculators are free, non-binding and easy to use.