A project in mind, but not the means to finance it? A bank account in bad shape? The personal payday loan can meet your most diverse needs! But like all credit, it has a certain cost. And it is essential to properly evaluate the latter before signing any contract, and therefore to commit. Specialized in consumer credit between individuals, Creditstair tells you what you need to determine the cost of a personal payday loan.
How does a personal payday loan work?
A personal payday loan is a type of consumer credit. His particuliarity ? It offers some flexibility to the borrower. The latter can actually use the amount lent at leisure, without having to provide proof of purchase to the bank or the credit institution. The money can be used to cover the purchase of goods (furniture, appliances …) or services (improvement work, travel, marriage, etc.). It may also allow the borrower to face a difficult financial situation, for example following unforeseen expenses (vehicle repair, health costs …).
The cost of a personal payday loan can vary greatly depending on the funding agencies. This is why, at first, the borrower has every interest in putting different institutions in competition. In a second time, it is advisable to peel each offer well and to compare them.
How to estimate the cost of a personal payday loan?
When receiving a loan offer, the borrower should pay attention to the APR, or annual percentage rate of charge.
Please note: the APR, a mandatory mention
In accordance with the Lagarde Act of 2010, relating to the reform of consumer credit, all credit institutions are required to include the APRC on their offers, regardless of whether it is a bank or a bank. an institution specializing in consumer credit.
The APR is expressed as a percentage of the amount borrowed. It is this famous rate that defines the total cost of the loan. Why ? Simply because it includes all the costs incurred by the subscription of a credit. For the borrower, it is thus an excellent element of comparison.
In the APR, we find:
- the application fees (opening and processing);
- the nominal interest rate (or bank interest or debit interest rate);
- the cost of borrower insurance (this insurance is optional and can be purchased from a bank or third-party financing organization);
- warranty fees;
- other fees charged for obtaining the credit (opening and account maintenance fees, use of a means of payment, costs in the event of intervention by a third party for the granting of the loan, in particular ).
To summarize, the APR represents the actual rate charged by the lending institutions, unlike the lending rate, which is in fact only the base rate. We must make a difference.
Cost of a personal payday loan: pay attention to ancillary costs
To the TAEG may be added costs referred to as annexes. In banking jargon, they are called penalties. These intervene only in the course of credit. In the end, they potentially increase the cost of the personal payday loan. We distinguish :
- penalties for late payment;
- prepayment penalties.
Again, the amount differs according to the credit agencies. The borrower can refer to the contract to become acquainted. In order to avoid late payment penalties, it is better to choose the repayment period that best suits your financial situation. Because this duration will directly define the amount of monthly payments. The shorter it will be, the more the monthly payments will be important, and vice versa.
Good to know: prepayment penalties are not systematic!
Some lenders do not apply penalties for early repayment. This is the case of Creditstair! At home, the borrower can make a refund for free, regardless of the amount borrowed! Thus, if his financial situation evolves (winning games, donation, inheritance …), he can pay off his consumer credit with confidence.
Estimate the cost of your personal payday loan in a few clicks
Nowadays, there is no need to make clever calculations or run the different credit agencies to gauge the cost of a personal payday loan. In general, each bank or credit institution offers a simulator on its website. This allows the borrower to know almost instantly the amount he will have to pay for his credit. To save even more time, the borrower can also use an online comparator.
personal payday loan offer: what are the mandatory details?
Before signing a contract, the bank or credit institution is obliged to send the borrower a lot of information. These will enable him to know if the loan is adapted to his financial situation. In a personal payday loan offer, must appear (exhaustive list):
- the identity and address of the lender;
- the loan amount;
- the type of credit;
- the cost of the personal payday loan (total amount due);
- the conditions for making the amount borrowed available;
- the duration of the contract and the number of monthly payments, with a schedule of repayments (per month, every two months …);
- APR (annual percentage rate of charge) and method of calculation;
- the total cost of the costs (expressed as a specific amount);
- the existence of a withdrawal period (the borrower has a statutory period of 14 calendar days to give up his loan after signing the contract);
- the articles of the Consumer Code concerning the period of validity of the offer, as well as the minimum period of reflection;
- the right of the borrower to obtain a copy of the credit agreement offer on request and free of charge.
personal payday loan: what happens if my project does not succeed?
Apart from the cost of a personal payday loan, the borrower must know the future of such a loan if his project does not succeed. As we have seen, the personal payday loan is not assigned to any specific purchase. The borrower is therefore not covered by the bank or credit institution if the sale is not made or if the property has a default. As a result, the credit can not be canceled and the borrower will be required to honor his monthly payments as stipulated in the contract. This is the big difference between the personal payday loan and the assigned loan (auto loan, for example).
Creditstair revolutionizes personal payday loan codes
Unlike all banks and credit organizations, Creditstair returns to the origins of the traditional mutual banking model. The concept is simple: savings come from professional investors (individuals, foundations, insurers, companies, pension funds, etc.) and is granted directly to borrowers. It undergoes no transformation operation, risky for both parties.
This financing model allows the borrower to benefit from preferential rates up to € 3,000. It’s the insurance to reduce the total cost of your personal payday loan!
Creditstair is also:
A 100% digital platform
Everything is done online. From the sending of supporting documents to the signing of the contract, through file tracking. The borrower thus earns valuable time.
One type of credit
We only offer the amortisable loan at fixed APR. This rate remains stable throughout the duration of the loan. Which means that monthly payments are constant.
Clearly displayed fees
On the one hand, there is the service charge, which pays for the platform for its work, and on the other hand, the interest calculated on the basis of the APRC, which ensures the remuneration of the investors who entrust us with a part of their capital. That’s all ! No bad surprises for the borrower, so!
E-mail, chat, phone, these are all ways to contact us. And this, since your prospection until the end of your credit agreement!
A safe and reliable credit institution
Creditstair is the only retail credit platform in Europe to be licensed as a credit institution. We have two accreditations in France. One emanates from the Autorité de contrôle prudentiel et de resolution (ACPR), the other from the Autorité des marchés financiers (AMF).
After receipt of the signed credit agreement and all the supporting documents, a definitive answer is provided within 24 hours, not one more. If this is negative, the borrower is informed immediately. He can then prospect without delay with other credit agencies.
Comparing different credit contract offers is an essential step in the borrowing process. This is the insurance for the borrower to benefit from the best rate, and therefore to review the cost of his personal payday loan down. For your consumer loan, do not hesitate to make a simulation on Creditstair. A few minutes are enough! If your application is pre-accepted, you have the option of obtaining an immediate policy response. Creditstair is simple, cheaper and without constraints!
The three key points to remember about the cost of a personal payday loan
- It is the APR (annual percentage rate of charge) that defines the total amount of this consumer loan;
- The APR includes all the costs related to the credit (administrative and guarantee fees, nominal interest rate, cost of the borrower’s insurance, and any other fees charged for the granting of the loan);
- This rate is a key element of comparison between credit contract offers.