Payday loans are so-called quick loans, whose popularity is constantly increasing. More and more people who can not count on receiving a bank loan decide to borrow money in the so-called parabank. Chwilówki have a lot of advantages, which make them popular. However, it should be remembered that extreme caution is recommended with them. Otherwise, you can quickly fall into a spiral of debt, from which it can be very difficult to get out. What to watch out for when you pay for payday pay?
Late repayment is an element of payday, which can really cost a lot. Everyone who is considering taking a payday loan should know that late payment of subsequent installments is a really high interest. As a result, we will return a much larger amount to the parabank than the one we decided to borrow. For this reason, it is important for payday loans to ensure that each installment is repaid on the date agreed when signing the contract. This will avoid high additional costs.
The biggest disadvantage of payday loans is, above all, a very high interest rate. The total annual interest rate is much higher than for classic bank loans. What does this mean in practice? To the parabank you need to return an amount definitely greater than the one we borrowed. That is why it is so important to reasonably approach the amount you plan to borrow. We must seriously consider whether we will be able to pay it back.
Although parabanks already allow the so-called credit holidays, it is a solution that will cost us a lot. The borrower must pay for postponing the repayment date. As a result, the loan becomes even more expensive. What’s more, the parabank may of course refuse to give us such assistance in paying off the debt.
Where is the Non-Bank Loan?
In the vast majority of cases, parabanks that provide payday loans do not expect a person who wants to borrow money to provide a certificate of employment and earnings. Consequently, payday loans are available to those working in the dark and employed under so-called junk contracts. For banks that grant loans, this simplified procedure cannot be used. Therefore, a lot of people do not have even a small chance of getting a loan despite the fact that they would not have any problems paying it back.
Payday loans have a very large group of supporters. This is not surprising when we look at the advantages of this type of quick loans. Let’s see why it is worth to decide on payday loans and in what respects it is more favorable than classic loans granted by banks.
Payday loans are minimal formalities that must be completed. Thanks to this, borrowing money does not require spending a large amount of time to gather the necessary documents, fill out extensive applications, etc. Everything is done really quickly and efficiently, which is a huge advantage of such loans.
Speaking of payday loans, one should not forget that in their case the credit decision is taken almost immediately. Most parabanks that deal with providing payday loans make a credit decision within a maximum of one hour. As a result, a person in need of money gets it very quickly.
Take a loan
In the case of a debt loop, 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, it is definitely better to start negotiations with existing creditors. With a little willingness on their part, they will be able to agree on a repayment schedule so that the debt can be repaid slowly.
Trying to negotiate with your creditors is always a good solution. Of course, they do not have to bring the expected effect, but they are definitely a better solution than waiting for the case to go to court, and finally the bailiff knocks on our door. When negotiating, there are a few rules to keep in mind. First of all, under no circumstances may you take a claim attitude pending cancellation of debt. It is good, however, to present your life situation and explain exactly why there were such serious financial difficulties. You should also think about the amount that you can easily give back to your creditors every month.
If we have fallen into a spiral of debt, it is worth checking the issues related to debt aging very carefully. 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 is worth remembering that the claim will be time-barred after ten years, and interest after three years.
Consumer bankruptcy is a solution that currently exists in Polish law. However, it should be remembered that the declaration of consumer bankruptcy is connected with court proceedings. It is possible only when there are strictly defined premises.
Borrowing without hesitation can eventually lead to considerable financial problems. It can lead to falling into a so-called debt loop, from which it is not so easy to get out. Here are some tips on what to do if at some point we fell into such a debt loop. | we found ourselves in such financial trouble |.