If you can apply for or receive a payroll loan offer, carefully consider whether you need it, so you don't have problems with your regular expenses and end up getting into debt.
A payroll loan is a loan offered by a bank or financial institution. Payments are guaranteed based on your salary; in fact, they deduct from your salary. This loan differs from personal loans because it requires a payroll account, and deductions or charges are made directly from deposits into your account.
Febraban recommends using these loans responsibly, otherwise, they can become a serious problem. Therefore, before applying, consider the following: is the expense urgent or can it wait? How much will it cost? Can you afford it?
Do you really need the credit?
You need to consider whether you need what you'd buy with credit and whether it's the right time to apply for it. If the expense isn't so necessary or urgent, you can continue saving and delay applying for a loan. This will greatly benefit you, as it may reduce the loan amount.
When evaluating the cost, you need to compare the Total Annual Cost (TAC), as the higher the TAC, the more expensive the loan will be. The TAC is a percentage that incorporates most of the costs and expenses involved in a loan. When comparing offers from different financial institutions, make sure it's a payroll loan and that the payment amounts are the same.
Also, check the total amount you'll pay, so you have another reference point for your comparison and can determine whether or not it's worth acquiring the loan. This amount will include costs, fees, and commissions.
Check the commissions you will pay, read the contract in full, and ask any questions you may have.
Before taking out a loan, make sure you can afford the monthly or biweekly payments, accurately calculate your expenses, and determine if you have the funds to cover partial loan payments.
The first thing you need to ensure is that this doesn't affect your basic expenses.
There's a myth that you can only get a payroll loan from the bank that handles your payroll, where you deposit your salary. Febraban (Febraban) highlights that there's currently a way for you to get a payroll loan from the bank of your choice. This is called payroll portability, and it's your right to request that your bank transfer your credit payments to the bank of your choice.
When you request a payroll loan from the bank that administers it, they respond very quickly because they have your information. The bank can even offer it to you and have it pre-approved, so you receive the credit in less than 72 hours.
When obtaining a payroll loan, you must pay interest plus the opening fee, life insurance, and unemployment insurance. Even if payroll loans have a competitive interest rate, the additional costs can make them more expensive.