These are loans like everyone else. The difference with other loans is that the whole loan amount has to be repaid at the end of the term , while in most cases regular loans have a term of at least 12 months.
By contrast, the term for a payday loan is usually 30 days and can be extended to a maximum of 60 days.
What are the special features of a payday loan?
The credit limit is limited and ranges depending on the provider of about 100 € up to 3,000 € . Upon maturity, the entire loan amount plus the agreed interest must be repaid in one go. Although lenders are also asking for data from Schufa when applying, their rating is not so strict because they are only relatively small amounts that will be made available at short notice.
Consumers can only apply for a payday loan. Before the next one is used, the previous loan must first have been paid.
For whom are payday loans worthwhile?
These special forms of loans are particularly suitable for consumers with negative entries in the Schufa . Even if the bank does not grant them a normal loan, they have good prospects of getting a payday loan despite Schufa’s entries.
They are particularly suitable for consumers who have a steady income and need a small amount of money quickly to bridge a financial bottleneck. Typical examples include an unexpected car repair or an indispensable device (kitchen stove, refrigerator, washing machine, TV), which must be replaced by a new one, because the old is broken. Other examples are additional payments to the energy supplier or landlord (utility bill). In these cases, a payday loan is often the ideal solution, because it can be applied online quickly and unbureaucratically and the money is available quickly.
In addition, most banks with loans under a loan amount of 1,000 euros do not even off, because the effort is greater than the profit. Since payday loans are relatively small amounts, they can also be used by consumers with bad credit ratings.
Where do you get payday loans?
All these providers have in common that they offer their customers a quick, unbureaucratic processing of the loan application. Everything is online, there is no paperwork. If the loan is approved, the money can be made available the same day, provided that the applicant has all the necessary documents ready and the request is not made too late in the day. New customers can initially borrow only small sums. With punctual and complete repayment, the possible loan amount continues to increase up to the maximum possible am ount.
What is to be considered?
At least the initial application can be made on all companies only on their website. The applicant must be at least of legal age and have his permanent residence in Germany. He must have sufficient income (about 700 euros minimum) to repay the loan. If the customer wishes extra services, these usually have to be paid extra. The exact conditions can be viewed on the websites of the providers.