Applying for a payday loan
The latest data on payday loans, reported markedly growing (in February 2017 requests increased by as much as 6.3% compared to the same month of 2016, with an average amount that broke through 13 thousand euros), show that families Italians, having overcome the most delicate phase of the crisis, have returned to making purchases of a certain weight, those for which it is necessary to have a lot of liquidity. This renewed enthusiasm is undoubtedly positive, as long as you do not take the longest leg and suddenly find yourself in debt. This is why it is important to know how they work and which guarantees are offered by payday loans, to choose the most suitable ones and not incur any nasty surprises.
First of all we have to ask ourselves what a payday loan is: it is a form of private financing provided by a bank or a financial institution, through which the customer receives a sum of money and undertakes to repay it in installments within a period predetermined. The repayment of the sum involves the application of fixed or variable interest and any other costs.
The loan can be requested by anyone who has reached the age of majority (the maximum limit may vary, but is usually around 70 years) and a demonstrable repayment capacity. The lender may, however, refuse to grant the loan if the applicant has other loan agreements in place which, in addition to the loan requested, would take over one third of its income.
Payday loan contract
The payday loan contract (we remind you that this category also includes small loans and fast loans) must contain a series of mandatory information, including the exact indication of the sum and the methods by which it will be paid, the interest rate practiced, the specific indication of the Taeg, the amount of the installments and their expiry. Like any contract, the one related to payday loans also includes the right of withdrawal. that must be exercised within 14 days from the time of stipulation.
Needless to say, the consequences in the event of non-payment of one or more loan repayment installments are quite heavy: the interest due is increased with the application of a default and the holder of the loan is reported as a “bad payer”, compromising credit standing (in practice it will be very difficult for him to get another loan in the future). For this reason, if difficulties are expected in meeting the deadlines, it is best to immediately contact the bank / to find a valid alternative solution.
Finally, we remind you that it is always possible to extinguish the loan early with respect to the agreed term, either partially or totally, and that there is an insurance policy called “credit protection insurance” to protect the applicant and his family if unpredictable events occur (death, disability, loss of job, etc.) that do not allow to respect the installments.