How do you compare loans?
An empty wallet? Completely cleared bank account? These are situations that can happen to anyone. Fortunately, there is a solution to this problem. You can take a quick loan that will support our budget. The only trouble is choosing the best offer. When looking for attractive financial services, you should support yourself with current payday rankings. How to compare payday loans to take advantage of the offer ideally suited to our needs? Our expert listed the most important issues, according to which loan proposals we are interested in should be verified.
Interest rate on the loan
Since interest rate is a key feature of the loan, it is worth carefully following the offer of the company we are interested in – it is the basis if we want to act in accordance with the principles of reasonable borrowing. We are eager to take out loans because we are tempted by the low interest rate referred to in almost every loan company advertisement. But you can’t be fooled by appearances. Nominal interest rate is intended to show only the interest rate on the loan capital. Its amount may not be greater than the value of maximum interest and exceed four times the current rate of the Lombard loan of the NatBank of Poland. Real interest is much more important, combining all costs that should be expected in connection with granting the loan and then its repayment. Therefore, it is an indicator that should mainly determine the competitiveness of a given offer. Some are surprised by the very high value of APRC. This is due to the fact that the actual interest rate is calculated on an annual basis. On the other hand, loans are granted for a very short period, usually 30 days, and can be taken for up to 60 days. It is worth using the services of loan companies, which in their offer immediately inform about the total costs of payday loans. Thanks to this, we know exactly how much we will have to give back and – most importantly – whether we can afford such a loan.
Instant payments are not only the amount we apply for, but also the additional costs associated with it – for this reason, it is worth carefully choosing the amount of the loan. Not everyone is aware of the additional costs that are added to the amount that we will eventually have to pay back. We mentioned them at the APRC, but this topic needs to be developed a little. The expenses we should take into account are the commission for the financial institution providing us support and loan insurance. The commission is therefore a remuneration for the mere granting of payday pay. Insurance, however, is not always required, but some loan companies impose the need to buy it, e.g. in the event of a job being lost by a client. Then you should think about whether this is really an offer for us. Insurance costs significantly increase the total value of payday loans. If you are applying for a small amount, you may find that they will be greater than the benefits of taking out a loan. You should also mention other fees, especially when using online loan offers, but not only. We are talking here about a verification transfer, although the amount of one penny or PLN is not high and is only used to verify the identity of the borrower. In addition, the necessary fees include reminders for late repayment, administrative costs or expenses arising out of the mere mobilization of funds. Not all of them significantly increase the amount that we will have to return, but after adding them we get quite a large sum. It is worth keeping this in mind when signing the contract and find the offer that will be most beneficial for us.
You must not forget that any additional services for taking loans can also be paid. One of them is the possibility to regulate the payday payer in advance. Not every loan company gives this possibility, and in many of them it is an option that is unfortunately not free. It is true that we have a chance to recover some of the fees and commissions, but there is nothing for free. Therefore, when comparing loans, you need to ask about this issue thoroughly, especially when you are really thinking about balancing your liabilities earlier. Otherwise, it may turn out to be completely unprofitable for us. Then we will have to wait for the deadline specified in the contract and only then return the money we borrowed.
Extension of the repayment deadline
The last issue that cannot be ignored when comparing offers is the extension of the repayment deadline. We can’t predict what will happen tomorrow, let alone in a week or two. Unexpected accidents can surprise us at any time – events such as sudden illness always come at a high cost. Research, hospital stay or medicine do not cost a lot, and if you also have a loan on your head, it really becomes a big problem. Therefore, when we are looking for a lender that has a convenient offer for us, let’s find out if it provides the possibility of extending the repayment deadline. There is an additional charge here. Its amount usually depends on the amount of payday pay and on how much we want to postpone the final date of payment of the liability. The payment should be made immediately, usually we simply make a transfer to the lender’s account. Once it has been posted, the repayment period will be extended. Undoubtedly, we should think about this solution when the deadline is close and we still have no cash to return the payday payday. Otherwise we will start to receive payment reminders. When they do not work, we will finally be visited by a bailiff, who will recover the outstanding money sooner or later.