Applying for a loan is a very common way of facing certain unexpected or punctual expenses that exceed our ability to pay. Buying a car, paying for studies, doing a home renovation, enjoying a well-deserved vacation … There are many occasions when that little mattress that we nurture every month falls short and it is necessary to have external help to meet these expenses. For this we have the so-called “payday loans”. But how can we access them?
How to apply for a payday loan?
This type of loan is used to purchase goods or services, so the amount of the loan is usually not very high. So, to apply for it we need to justify our income but, unlike mortgage loans, it is not necessary to commit to a specific asset.
In this way, the processing is usually faster than for other types of products, although the interest is usually higher and the repayment terms are tighter than in the case of mortgages.
Let’s know some of the most common general requirements to apply for a payday loan:
- Be of age
- Have a DNI or passport (in force) that justifies residence in Spain.
- Present a selfie that confirms the identity of the applicant.
- Indicate a mobile phone number to contact to give information on the status of the loan application.
- Being the holder of a bank account in Spain to which you can transfer the money.
- Demonstrate financial solvency through a bank receipt that certifies a periodic income with which the applicant will face the return of the borrowed money.
In short, any loan that we request must offer certain guarantees to the lender, showing that we will be able to satisfy the amount together with the interest. This is done to certify that our economic situation allows us to comfortably face the debt, since, otherwise, asking for a loan could be a problem and make it difficult to manage our personal finances.
Which entities grant payday loans?
In Spain there are several options when requesting a payday loan. Each of them has different characteristics and requirements that are adapted to a greater or lesser extent to the needs of the user depending on the type of expense they need to face. These are:
- National and foreign banks with representation in Spain.
- Savings banks.
- Cooperatives of saving and credit.
- Private equity companies.
- Credit companies supported by financial institutions.
- Loans between individuals.
- Large surfaces entities and stores.
- Online fast personal credit institutions.
Fast personal credit institutions
Fast personal credit companies allow us to obtain cash in just a few minutes through online platforms.
Despite being entities that, unlike traditional banking, are more flexible in the conditions for applying for a loan, they have certain fundamental requirements without which it is not feasible to apply for any help.
Among these requirements is not being part of the ASNEF (National Association of Financial Credit Establishments) list and showing regular income.
Thus, we can quickly have cash by choosing the conditions and times to repay the loan and accessing information regarding surcharges on the amount initially loaned in a totally transparent way.
How to calculate the installment of the payday loan?
Be that as it may, at the time of going to a credit institution we should know exactly what our debt limit is, as well as the maximum monthly installment that we can assume without going through financial difficulties or assuming a greater debt than initially raised. How can we know this exactly? Using the so-called “payday loan calculators”.
These consist of a simulator that allows us to easily calculate the fee that we must pay when we request a payday loan based on the amount and terms established, as well as the effective annual rate that corresponds to a fee and the determined expenses.
Currently, most credit institutions have this type of user-friendly tool: we only have to fill in the fields indicated on the home screen and click on “calculate”. In this way we can get an idea of both our debt capacity and the conditions that the financial company offers us.
It is very important to choose carefully in which term we are going to repay the loan since, although a longer repayment time will make the monthly installments lower, in the long run it will also lead us to pay more interest. Conversely, a shorter repayment term will increase that monthly fee but will make the payday loan cheaper.
Due to its ease of obtaining them and the few requirements required, payday loans are increasingly widespread in the market. Experts advise, however, a “responsible and measured use” of fast money, as well as avoiding this type of financing source if you do not have certain financial solvency. Choosing a private equity company with guarantees will also ensure us regulated and agreed on conditions, so that we do not encounter any shock along the way.