When we need quick cash for unannounced expenses, we try to get a loan or a loan. We usually go to banks for this and it is a good way out of the situation if we have adequate earnings and are not in arrears with other financial liabilities. Banks approach their potential borrowers quite restrictively. We can count on greater flexibility in this respect in loan companies. They offer simple and convenient online payday loans. Here, the chances of quick cash increase significantly. Even low-income people and indebted people who appear on the BIK database as unreliable borrowers can get such loans. The formalities associated with granting payday pay are not complicated. The procedure takes place in an express time and the money on our account can land after a few minutes. In this article, we will try to show you the nature of these types of loans and all issues related to them.
Online payday loans
How do you get payday loans online? All you have to do is fill out the loan application on the loan company’s website. This is a very simple activity. It is enough if we provide basic information in the application – personal data, type of employment and amount of earnings, number of dependents or the nature of other financial obligations. On this basis, the loan company will analyze our creditworthiness. But it will not be as restrictive as it is in the case of banks. At this stage, the loan company also checks our credit history in the BIK, BIG and KRD databases. But beware – not all companies do this. Some of them omit BIK at all, limiting themselves to others. What does it mean? This situation opens the door for people in debt to obtain a loan. These persons, through late repayment of liabilities, are listed in the BIK database as unreliable borrowers. Such people have no chance of a bank loan. Thanks to payday loans they gain access to cash.
Borrowing in loan companies, as in the case of banks, involves costs. In the case of payday loans, these costs are much higher than in the case of bank loans. With one small exception, which is discussed later in the article. To estimate the total cost of the loan, we should pay attention to the APRC, i.e. the Actual Annual Interest Rate. It includes not only the interest rate on the loan, but also the commission and preparation fee. The APRC is calculated by both banks and loan companies on the same terms as set out in the Consumer Credit Act.
However, some specialists believe that the APRC meter is not perfect at comparing different loan offers. This involves a period for which they are granted. It is usually a maximum of 12 months, and payday loans for 30 days are the most popular. With such a short period, due to the calculation method, the APRC is gaining horrendously high levels, reaching far over 1000 percent. According to these specialists, the APRC is a good measure for loans with similar parameters – a similar amount and repayment period.
Payday loan for free
We mentioned earlier the exception, as a rule, according to which loans are always cheaper than payday loans granted by loan companies. This exception is the first free payday loans. This is a promotion addressed to new customers. If this is your first time using a loan company offer, you will get a loan for free. This type of promotion was first introduced to the Polish market . Later, more companies began to model on it. The promotion turned out to be a great promotional idea.
What is this type of loan? The rule is simple: you pay back as much as you borrow, within a strictly defined period. If you are late with the repayment, the promotion will expire and the loan company will charge you with costs – commission and interest, such as in the standard offer. Usually payday loans are granted for 30, 45 or 60 days. Although you can also come across offers where the repayment deadline is 90 days, or even 12 months. If you are able to pay the payday loan on time, it is an ideal loan offer. You get cash completely free.
You must remember that the offer is only for new customers. If you want to take another payday loan in the same company, you will have to reckon with specific costs. The commission, preparation fee and above all interest rates can be high in this case. It is good to think about whether we can repay this financial commitment. Maybe installment payouts will be a better option in this case? Then the repayment will be spread over time into acceptable monthly installments.