The payday loan is an increasingly popular personal credit line in the country. One of the main attractions is the interest rate as well as below the rates of personal loans, for example. However, many workers still have questions about how to avail this type of loan. That’s what we will explain now.
Private payroll loans are offered by banks and lenders. The value of the installments is directly discounted from the customer’s payroll, the convenience for both parties.
To get the payroll loan, you have to be working at a company with a signed portfolio for at least six months.
In addition, the company must have an agreement with a financial institution to offer this benefit. INSS retirees, military and civil servants can also hire the service.
There is an explanation for the interest on the payroll loan being cheaper and attractive: as the amount is directly deducted from the payroll, there is a greater guarantee that the payment will be made.
This is because the loan amount in this mode cannot exceed 30% of the client’s income, ie there is no possibility of abusing exorbitant cases. And even in rare cases of default, the employee’s company will not suffer any debt impact.
Interest on private payroll-deductible loans is estimated by the bank at an average of 2.5%. This is a ridiculous rate compared to personal loan interest (three times higher) and even more so compared to credit card and overdraft. For retirees and pensioners, the ceiling is 2.08% per month, while for civil servants is 2.05% per month.
Banks and financial institutions usually do not make restrictions that consider a survey, but each has its own credit policy. As stated earlier, the salary and the loan ceiling are the “guarantees” that the amount will be paid, that is, the risk of default is practically zero.
However, workers fear the risk of default in the event of dismissal during the pay period. It is important to note in the contract with that financial institution what the procedure is for this type of case.
Typically, there is a separate renegotiation or the institution may collect a portion of the termination sufficient to settle the debt. In the case of withdrawals and civil servants, the stability of their positions usually clears this risk.
Even with all these guarantees, it is critical that the worker be aware when applying for a loan. It is worth remembering that more than 60 million people closed the year 2017 in debt. However, unforeseen events usually happen. And if the loan is really a necessity, there is no doubt that the discounted payday loan is the best solution.
Does your company still not offer discounted payday loans? Sign up now on our website. Contact us to learn about the solutions for your business.