Best payday loans

Best payday advance loans

Despite the slight rise in mortgage lending, the loans continue to be cheaper. More than 50 consumer loans are available on the market. Which banks offer the most favorable terms? And what is the difference between interest payday loans?

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Interest is the remuneration for the borrowed money the borrower pays to the lender. It is in the “p.a. – per annum “. For a $ 10,000 loan at a rate of 10% we pay annually at interest rates of about $ 1,000 (in fact, it will be a little less, because the interest is calculated on a daily basis from the current amount due).

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APR (annual percentage rate of charge) is the total cost of the loan. It includes, in addition to interest, any additional borrowed fees (for negotiation or credit management, compulsory insurance, etc.). If the loan is contingent on negotiating another charging product (eg a current account or credit card), the APRC must also take into account fees for these additional products. The more the APRC approaches the interest rate, the more transparent the credit provider, because it charges less additional charges, which may not always be obvious.

We basically compare the loans according to the APRC, not the interest rate alone.

BANK LOANS

The rates listed below apply to a new non-purpose loan of $ 10,000 over 4 years. RPSN starts at 7.13%. It is possible to achieve better conditions that banks boast in commercials (“APR from 4.9%”), but much more money should be borrowed for a longer period (eg $ 40,000 to 8 years).

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At our bank counseling department, you ask us why we only recommend bank loans and discourage you from payday loan companies.

The bad and strict bank does not want to borrow me when I did not pay in time in the past or do not have enough income. But I do need just a few thousand for a vacation I miss before paying.

Below is an overview of five non-bank micro-loans with RPSN of 49-3037%. For comparison, the banks above range from 7.13-10.97%. To pay for money 10% or 3,000%, that’s the difference, right?

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Every loan is an unpleasant commitment that carries some constraints.

Limit of Credit Capacity: From payment, only part of the money can be paid on loan repayments (something must remain for us). With an income of $ 20,000 net monthly, it is possible to repay a maximum of 8-10,000 $ without any other obligations (families, other loans). When I get a car loan with a monthly installment of $ 5,000 at the age of 25, the bank will not give me a mortgage at the age of 28 when I set up a family because I would not put it together with my car on the loan. Because of petty malice, I find the possibility of my own roof above my head.

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Repayment obligation: When I borrow money once, I must also return it. But life is full of pitfalls. I can lose a place, I can get an accident or anything else. In the case of loss of income, it is almost impossible to pay the loan repayments, which leads debtors to executions and personal bankruptcies (at best lost only 5 years of life). So, if we are borrowing money, we should be taking the risk. Absolutely not worth the risk of holiday, new electronics or gifts for children.

Life on debt is not a modern affair, debts and loans of all kinds have been here almost since time immemorial. Already on the market there were surplus entities who wanted to evaluate their funds and were willing to borrow money for their money, and the deficient entities who had an acute need for money that they were not currently receiving and were therefore willing to pay for the temporary money lending. Modern lending is only broad availability for almost everyone and observable perversion arising from the petty reasons we are indebted to.

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The first and most important rule of responsible lending is the purpose of the debt, which can not be consumer but exclusively investment. Investing benefits us especially in the future, consumption nowadays. Debt represents a future commitment, therefore it pays to be grateful to someone in the future only if it considers that in the future we can expect from investments arising adequate benefits. Conversely, the benefits that we consume right now, we certainly will not pay someone to commit future, as we called. Projídali his future. If we want to go on holiday in the summer, it is better to save money in spring than to pay off the debt in the autumn. When the investigation is looking forward to the expected finals in debt just we curse creditors and wonder why actually wants his money back plus more plus interest. In addition, we avoid a typical risk of repayment in the form of an unexpected event when we do not have installments and become insolvent. Last but not least, holidays, new TV, Christmas presents, but also a (new) car that we do not need to carry out our profession Рin short, all consumption should be financed only from savings rather than from debt. If we do not have it, we do not borrow and wait until the moment we have it.

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Investments or even more necessary investments in the form of real estate for housing, cars necessary for the pursuit of a profession, education ensuring better employability in the labor market, etc. – all this can be suitable for debt financing and sometimes it is appropriate to overcome the necessity. Replacing rental housing for a property owned by a person, even purchased on debt, is absolutely right, as we will benefit from rent savings throughout the repayment period, and after paying the debt, we still remain a valuable asset. Similarly, if we need a car to pursue a profession, it is more reasonable to get it on debt and start earning money right now before we wait until we wait for it and come in between earnings. At the edge of a reasonable debt there is an investment in the modernization of the real estate (reconstruction of the Umakart core in the panel house or new kitchen). Investing in the true sense of the word is because we are redeveloping our property, but additional benefit over relatively high interest rates on consumer credit (there is no such mortgage on the mortgage) can be questionable – see the following two paragraphs on rising interest rates.

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The basic rule of financial mathematics says that interest increases with rising risk. As well as investment property for rent generating revenue of approx. 5% is a less risky issue than an equity investment, but we expect earnings above 10%, and the lender (the bank) has to borrow money at varying rates according to the risk of the loan. The mortgage provided to a solvent thirty-year-old, unpaid, with a monthly above-average income covered by the insured property, is almost risk-free compared to the borrowing of a twenty-year-old mother who lives only from bribe income and social benefits and has no guarantee. Thus, the first loan may be interest rate, for example, 2.5-4%, while the second loan will move in the area of rates to 15%. The Bank considers the applicant’s net monthly income, other liabilities, guarantees, and previous credit history. The better the client gets, the lower the interest rates.

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Besides the creditworthiness of the client, the interest is also dependent on the administrative burden associated with the establishment and management of the loan, and this time inversely proportional. To borrow a single loan several million dollars for decades with a clearly defined repayment schedule is disproportionately administratively less demanding than to administer hundreds of small loans in the order of ten to hundreds of dollars  with a duration of several months to years. Therefore, consumer loans are more expensive than mortgages. The possibility of extraordinary repayments can also cost the loan, as the predictability of the exact repayment decreases and the bank grows with the management of the expected money needs.

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The scoring of the client by the bank leads to three possible outcomes:

  • Excellent credit, lending in the best possible conditions of payday loans reviews
  • Lower but still sufficient credit, we borrow under adequate conditions
  • Insufficient creditworthiness, we do not borrow

The first result is unambiguous. If the loan makes sense to us, we borrow at a very favorable interest, the cost of which would exceed the much greater benefit of the debt investment. The second result should lead to a deeper reflection, as the bank shows us that there may be an increased risk of default which should be eliminated. At the same time, we will borrow at a correspondingly higher interest rate, so that the benefit from the investment would no longer have to bear extra interest costs. In this case, it may be more convenient to wait a couple of months for the credit until the creditworthiness increases or, if applicable, apply for a lower credit where the creditworthiness could be higher.

The third result is also unambiguous. The Bank does not lend us in our interest, because it strongly doubts that we will repay the loan. This protects us from the risk of personal bankruptcy. However, if we still have some money to borrow, we need to reduce the credit application and thereby increase our creditworthiness, which could then be sufficient. However, interest will certainly not be favorable, so borrowing needs to be well thought out under such circumstances.

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The worst possible choice in the case of a bank credit rejection is to issue a non-banking institution. The business of non-banking institutions is very risky, because their clients have the worst possible credit (if they did not, they would lend them on better terms). The interest rate of adequate credit clientele and all other borrowed costs (often skilfully hidden) can never be paid to anyone, even in extreme emergencies. The business of most non-banking institutions has a rather morbid moral dimension, as the target of these companies is not, in contrast to banks, to successfully repay the client’s debt, but on the contrary to its default and subsequent parasitism on the client for as long as the client literally sucks in contractual penalties and penalties, often leading to personal bankruptcy (in the best case – you have a maximum of 5 years) or lifetime execution of all assets and income above the minimum subsistence level (in the worst case – you suffer until death).

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Are not you sure where and how to borrow? Will the bank’s suspect come to you? Then there is our free bank advisory service, where a specialist from the team of our website responds quickly and completely free of charge to any inquiry.