Payday loans: how they work and how to hire them

The mini loans arise as a punctual payment tool very useful for those who have to face an unforeseen expense and do not have money for it. On the contrary, when thinking about bank loans, it is normal to go to large amounts of money and too important requirements and access conditions. The purchase of a car, the renovation of the home …

Payday loans via cover the needs of small amounts of money, normally between 100 and 1000 €, and its processing is fast and usually does not have great requirements for the client. To these advantages of access, the interests of this type of products and their conditions of return are contrasted. Let’s review in detail its characteristics.

How a mini loan is contracted

These mini loans are usually granted by credit institutions associated with banks, not directly by them. Thus, the most common way of contracting is through the internet. By means of a simple form, the normal thing is that we are required our personal data like name, last names, and DNI, number of accounts, etcetera.

In addition, to demonstrate that we can return the loan, the usual thing is to require both a bank statement that shows the status of our accounts and a proof of income; This can be from a payroll to the receipt of a pension.

Another alternative to get a mini loan is to acquire a BBVA credit card, with which you can postpone your purchases and pay them in several installments (with interest), or you can even transfer cash from your card to your account, up to the limit amount you have granted, and then return it in convenient installments along with interest.

Interest and the repayment term of a mini loan

As in any other loan or credit that we request, the interests associated with a mini loan vary depending on the credit institution that grants them. The normal thing is to find mini loans from 1% of daily interest, although the final price of the loan is usually indicated at the expiration of 30 days, such as cost from € 500 to 30 days. This type of loans, therefore, has higher interest rates than those that tend to be associated with ‘ordinary’ loans for larger amounts.

In addition, unlike regular loans, the mini-loan must be returned in full after 30 days, because in case of delay the interest for delay will come into operation. There is, therefore, no possibility to split the payment.

Given its interest and its fast maturity, this form of financing is only recommended for customers who have to face an unforeseen expense or an emergency and are clear that they will be able to return the requested capital, plus their corresponding interest, within a month. Of course, having a closed interest and a short return period, the client always knows what the exact cost of his loan will be.

Requirements for a mini loan

One of the most interesting advantages of this type of financing is that it hardly presents concession requirements. Unlike regular loans of larger amounts of money, these small loans do not require the client to present a guarantee; Neither is it necessary to have a payroll, although it is a source of income that the applicant can demonstrate.

Since the requirements for accessing this type of loan are very small, they are usually granted on the same day they are requested and, in some cases, even only a few minutes after the request is made.