By comparing the offers of different lending institutions, it is possible to obtain a payday loan in good conditions. But playing the competition is not always enough. Here are 4 tips to get the best rate for a payday loan.
Compare payday loan offers to find the lowest rate
In France, competition is fierce between credit institutions. There are hundreds of funding offers on the Internet; this makes the loan search easier and in the payday loan market, borrowers can find advantageous terms to finance the realization of their projects. But for that, it is better to know how to compare the rates of consumer credit and all the financial conditions offered in the offers.
As most comparator services are free, borrowers have every interest in using them. Online, filling out a simple form on the Internet gives you access to dozens of loan proposals, tailored to your specific needs. The tools developed by the comparison sites are easy to use, but their search engines are powerful enough to highlight in just a few moments the cheapest credit offers corresponding to the requested criteria. The apparent simplicity of comparator websites and their mobile applications hides a formidable efficiency to sift the databases of contracts offered by consumer credit agencies.
Prepare your payday loan file
Getting a cheap rate for a consumer credit first requires a good knowledge of the strengths and weaknesses of your own file. By following this advice, borrowers can best prepare for the negotiation of their loan. To obtain an offer with the best financing conditions, it is essential to define the characteristics sought for credit. A consumer loan that generates high monthly payments may pose a problem for certain categories of borrowers, for which increases in expenditure are to be anticipated. In this case, it may be worthwhile to prefer a longer repayment period to reassure the bank or the credit company and thus obtain better conditions.
Conversely, extending the repayment period is sometimes counterproductive. Even with a low interest rate, it adds to the total cost of credit. Concretely, we must find the right compromise between the amount of monthly payments that a budget can comfortably hold and the duration of the credit which increases the total weight of interest. For that, online payday loan simulators are particularly useful. They allow to easily estimate the optimal characteristics for a future financing. By anticipating all possible weaknesses of their file, borrowers can put themselves in a position to negotiate more interesting rates, with a financial package perfectly adapted to their situation.
Consider the overall cost of a payday loan
The promotional offers offered by the credit agencies are all more attractive than the others, but they are sometimes difficult to compare based solely on the interest rate of the loan. To compare them effectively and obtain a really low rate, it is necessary to take into account the total cost of the payday loan. It is the annualized annualized percentage rate (APR) that measures this. Simulations on the Internet must make it appear to allow future borrowers to compete between different offers. In addition to the APRC, other simple criteria must also be taken into consideration. This is particularly the case of the possible amount of a personal contribution.
Depending on the possibilities of each borrower, this type of down payment generally allows for lower debt and credit institutions can offer a lower rate. To compare two offers, you must ensure that they are made for the same amount of personal contribution. It must also be verified that the amount of the repayment monthly is adapted to both the budget of the borrower and the life of the financed property. For example, a car loan should have the same life as the vehicle purchased. Beyond that, the borrower could find himself in the difficult situation of having to refinance a property without having finished the repayment of the first one. Finally, even if borrower insurance is not legally required for a consumer credit, it must be taken into account when comparing different offers.
Opting for alternative solutions for payday loans
To obtain a cheap rate of consumer credit, new ways to borrow are possible. One of them is to use a payday loan broker. The latter builds a loan application file on behalf of the borrower and presents it to different credit agencies to find the most interesting conditions. This solution has a cost – brokerage fees – but for many, the formula has been proven to get cheap credit rates. Another effective alternative is direct credit platforms like Younited Credit. On a shared model, a community of investors lends to individuals looking for payday loans, both faster, simpler and cheaper.