What is the principle of payday loan? Under this rather obscure name is simply hiding a consumer credit. Or rather, one of its variants. Explanations.
There are several types of consumer credit: the payday loan, but also the revolving credit, the credit affected or LOA (lease with option to buy).
With the payday loan, the borrower uses the amount borrowed as he sees fit. He has no justification to provide his bank with the purpose of the funds.
The payday loan is different:
– assigned credit, which is attached to a good or service ( credit works, car credit, motorcycle credit…). Note that the LOA is also linked to a good (a vehicle by an example);
– revolving credit. This allows the borrower to build a reserve of usable money at any time and that it renews as and when its repayments. However, the payday loan is repayable over a period determined in advance, in monthly installments.
payday loan, what consequences?
As we have seen, the payday loan does not require any justification from the borrower for the use of funds. It has another advantage: it can be more easily negotiated than the loan allocated.
The problem is that the payday loan has the flaws of its benefits. As the loan is not tied to any specific purchase or service, the borrower will have to repay it even if the property is defective or has not been delivered.
On the other hand, the person who has taken out an assigned credit will only reimburse it if the goods have been delivered or if there are no defects.
The loan conditions
As with any consumer loan, the loan must be less than or equal to € 75,000. Similarly, the borrowing period must be equal to or greater than three months. The lender must be non occasional.
Feel free to go through a broker
Would you like to take out a payday loan to carry out work or acquire a car or motorbike? As a broker, the Creditaf puts you in touch with its network of partners to give you the best financial terms for your loan.