Payday Loan – What is it and How it Works?

Surely you have heard of the payday loan, but do you know how this financial product works? Who can have access to it? How much does a payday loan cost?

The time for you to take away all doubts about what they are and how all credit arrangements work now! See in our definitive payday loan guide.


What is it and how payday loan works

how payday loan works

A payday loan is nothing more than a contract entered into between a client and a financial institution where the institution agrees to make a cash payment and the client agrees to return the money with interest and correction in monthly installments to the institution.

The most common way to get a payday loan is through personal payday loan. This is the mode of credit with less restrictions and, therefore, is usually the most sought by customers. But other than personal payday loan, there are other forms of credit. Know what they are.


Types of payday loan

Types of payday loan

In addition to the personal payday loan, there are other forms of credit that may be requested, including: payroll payday loan, secured payday loan (also known as real estate refinancing), payday loan legal entity. Below, learn how each of these types of payday loans works.

1. Personal payday loan:

Personal payday loan is a form of credit in which many conditions are not imposed. To get this payday loan, you will undergo a credit analysis and, prove your ability to pay for the amount you want to lend, the money is released into your account.

This is not the cheapest way to get a payday loan precisely because it does not have so many restrictions, however, it is still the best option to enter the special check or credit card, where interest rates are even higher.

2. Paycheck payday loan

The payday loan is somewhat more restrictive than the personal payday loan. Only civil servants, retirees or pensioners of the INSS and some private company employees have access to payroll deductible payday loans. This is because the form of payment of the payday loan consists of a discount on the salary or benefit of the contractor – which happens even before the money falls into your account. The advantage of paycheck-deductible payday loans is that the chances of default are lower, as a result, the interest rate is usually lower than in other types of credit.

3. Payday loan with property in guarantee – Refinancing of property

The Refinancing of property consists of a payday loan in which the contractor leaves a property, removed and in his name, the collateral for the payment of the payday loan. Thus, the financial institution has a guarantee that you will not delay or fail to pay the installments of credit, after all, in case you fail to pay, the bank can take your asset. In real estate refinancing, it is possible to get credits equivalent to up to 60% of the value of the property to pay in up to 30 years.

4. Warranty Vehicle Payday Loan – Car Refinancing

Just like in real estate refinancing, vehicle refinancing consists of asking for a payday loan and leaving the collateral for the payment a vehicle removed and on your behalf. This way, if you have a problem and can not pay for the payday loan, your asset can be taken by the bank. In this mode of credit, the amount released will depend on the model and the year of your car.

5. payday loan for legal entity

This is an exclusive form of payday loan for legal entities, so it has special conditions to help entrepreneurs in opening companies or branches, buying machinery and equipment, among other things.

Who can get a payday loan?

Who can get a payday loan?

If you are going to apply for a payday loan at the bank, you will need to be 18 and have a checking account at the institution. The bank will do an analysis of your transactions and then may or may not release a lump sum of credit to you. In the case of the payday loan requested in a financial, it is necessary that the client is over 18 years and has how to prove income.

Another way to hire a payday loan is through the online payday loan, where you also need to be over 18 years old, in addition to submitting all the requested documents and have the proof of income.

It is worth knowing that even if you meet the characteristics of who can take out a payday loan, you will undergo a credit analysis before the money is released. This means that meeting the requirements does not guarantee that you will get the payday loan.

Negative payday loan

If you are negative, although harder, you can still get a payday loan. Everything will depend on the credit analysis of the institution in which you made the request and also the size of your debt. payday loans such as payroll, refinancing of property and car can be more flexible in credit analysis as they have a guarantee of payment, but it will depend on whether the institution accepts negative or not.

How to get a payday loan

payday loan

You can get a payday loan online, at a bank or at a financial one. In the online payday loan, you will need to access the website of your choice, fill out a form with personal information, and send documents through your cell phone so that the company can perform credit analysis and release or not the money for you.

If you opt for a bank or financial payday loan, the process is quite similar. You will need to move to an agency and apply in person. Just like in the online payday loan, you will undergo a credit analysis to know if the payday loan will be released or not.

Where to get a payday loan

Where to get a payday loan

Nowadays, several companies already offer payday loan modalities online.  Here you find the personal payday loan online with interest rates from 3.99% per month and can request values ​​between R $ 1 and R $ 20 thousand. Just fill out our form to find out the pre-approved value for you!