Types of Personal Payday Loans and Their Characteristics
At present, the credit offer is so great that there are many types of personal payday loans, each with its advantages and disadvantages. It is usually resorted to in times of economic difficulty, but also for a matter of family or personal payday budget organization.
A personal payday loan can be considered as a loan granted by a credit institution to a private client, that is, not to a company or a self-employed person, and that the latter can use freely for what he/she considers best, that is, that it is not linked to a concrete purpose, such as the mortgage of a home or the financing of a car.
For a better understanding, we will include the different types of personal payday loans according to who grants them: traditional banks, credit companies, private lenders or public institutions.
personal payday loans of banking entities
It can be said that they are the classic personal payday loans, those that the banks grant. Its point in favor may be the security and reliability of powerful entities with a lot of financial muscle, which have sufficient funds to carry out an operation of this type.
The great variety of banks and offers of both make it possible to compare and look for the most advantageous conditions in each case, although in general the interest charged by these entities are relatively high. The most common expenses to which these loans are dedicated are studies of children, family holidays or private consumption.
One of the great disadvantages of this type of personal payday loans is the great bureaucracy that they carry and the difficulty of accessing them if certain conditions are not met, sometimes very demanding. For example, many entities do not grant loans to those who do not have a fixed payroll with a medium-high salary, something that in recent years is increasingly unusual.
Neither are credits approved for those who have outstanding debts, either with the administration or with private companies. And for this not only track in the lists of defaulters, but even the backs are covered with respect to those who are reflected in the CIRBE (Risk Information Center of the Bank of Spain), where people with risk credits are enrolled, including if they comply religiously with the payments of the fees.
In addition to the classic personal payday loans, which usually grant a specific amount to be repaid, banks currently offer other types of financing. For example, credit cards, usually associated with the current account. Or the lines of credit, which in practice are credit accounts in which the bank contributes a balance and allows the client to use it, but returning it at the end of the agreed period, plus the interest generated.
Fast online microcredits of credit companies
Private credit companies, such as Samuel Pickwick, are companies that specialize in granting instant online credits. It is a type of personal payday loan very appropriate for unforeseen expenses since they are quick, easily accessible and the fees charged are moderate.
They are understood only 10 or 15 minutes from the moment in which personal payday loans are requested until they are available to you in your current account. The simplicity has to do with the application process: an online form for which you do not need any kind of knowledge of economics or finance and that can be filled from the home computer or from the smartphone through the Internet.
They are easily accessible because virtually anyone of legal age can benefit from them. And that includes people who are part of files such as ASNEF, RAI or CIRBE in this way people can access quick loans with ASNEF. In addition, not having a payroll is not a reason for exclusion, since another source of regular income such as pensions or unemployment benefits can be accredited and access to fast loans without paperwork. Finally, paperwork is minimal because quick loans are made without collateral, as banks do not usually do in many cases.
Other types of personal payday loans: private lenders and institutions
Private lenders also grant personal payday loans in a legal manner. They are individuals who may have a completely different profession from finance, but because they have a comfortable economic position, they can afford to grant loans to other people, always through a contract and often before a notary. The main disadvantage is the very high interest, sometimes bordering on usury.
Finally, mention may also be made of certain public institutions, among whose functions may be to grant personal payday loans. There, the ICO could be mentioned, although only in a very specific case: that of financing reform projects in the home itself. The rest of its credits are aimed at companies, freelancers and other public institutions.