This is a very popular loan formula in the Anglo-Saxon world, in countries like Great Britain and the United States, where they are called payday loans . This type of financing is designed specifically for the small daily needs that you face in everyday life, when you have difficulty getting to the end of the month: pay a bill, make an unexpected purchase, repair the car and many other similar situations. If you don’t have money in the bank at that time, how do you do it?
The loan, depending on its characteristics, can fall into the category of small loans or very fast loans (click here to find out how to get fast loans). The payday loan is in fact a small loan, rarely over 1,000 euros, which can be obtained very quickly , that is within a few days. These characteristics respond precisely to the need for common expenses in a very limited period. But even if the costs are not so large, if the necessary liquidity is not available, they can become a problem.
This type of financing is not provided by banks, but much more often by financial companies , also active online, specialized in this sector.
The cost that must be faced for this immediate availability of liquidity, however, is very high: usually, the interest rate applied on these loans is very high, precisely because the financial offers a certain amount of money in a very short time and often with lower guarantees. compared to a traditional personal loan.
The other peculiarity of the payday loan consists precisely of the repayment method : this happens when the applicant receives the credit of the monthly salary following the obtaining of the loan , the payday, in fact. For this reason, these loans are often requested at most one or two weeks before the salary is received. In fact, this financing can be considered as a sort of advance on the salary, which is repaid at the end of the month.