MonthMay 2020

Which bank to apply for a payday loan from?

It is not the ideal situation, but unfortunately, at some points in life, it may be necessary to apply for a payday loan. There are several ways to borrow money, as well as a large offer of banks and financial institutions that can lend money. Despite the apparent ease in obtaining a payday loan, to reduce the risk of winding up in the future, it is important to analyze the options, giving preference to those that charge lower interest, such as the payroll or pledge, as well as see the rate that is charged the bank and/or financial institution. Here are the types of loans you can get and in which banks you can apply for a payday loan:

Main types of payday loan

Payroll loan

Payroll loan

In this modality, the installments of the payday loan are deducted directly from the payroll of the borrower. Among its advantages are the interest rate charged, which is lower when compared to other types of credit. In addition, as the installment is discounted directly from the payroll, there is no risk of forgetting to pay the amount due. However, the personal payroll loan is not available to everyone: you must be a public official, retired, pensioner or work in a company that offers this option to its employees.

Payday loan with pledge

Who needs quick credit or has a dirty name in the square and has a valuable asset, like a jewel, can opt for the pledge. This modality does not require credit analysis or the presence of a guarantor, however, it is important to be aware of the cost of the pledge, which, as in any loan modality, has built-in interest and fees.

Personal overdraft loan

Personal loan with revolving credit card

Borrowing money through an overdraft only has the advantage of ease, since the money is available in the checking account. However, using this method can be a trap: the interest charged is among the highest in the market. In addition, it is common for people to get used to using overdraft money as part of their salary, which, even in the short term, can have catastrophic consequences due to the high fees charged.

Payday loan with revolving credit card

It is also possible to obtain a payday loan by withdrawing by credit card. As with overdraft, the only advantage is ease. The amount can be withdrawn from any ATM. However, the interest rates are very high, which does not mean that using the card rotary is not a good deal.

Payday loan with banks and financial institutions

Personal loan with banks and financial institutions

In addition to the above, it is possible to apply for a payday loan directly with the bank or financial institution. In some cases, however, this modality is restricted to account holders and there is a credit analysis.