A payday loan is a type of loan that is frequently taken out in the Netherlands. The loan is especially suitable for those who want to finance a larger purchase. With a larger purchase you can think of a new kitchen or car. The payday loan is a form of loan that above all offers you a lot of security and clarity. You can read more about this method of borrowing money below.
The payday loan, what is it?
A loan form that is very popular today is still the payday loan. This loan is mainly used to finance larger purchases. It is therefore not surprising that the purchase of a new car by consumers is often financed by taking out a payday loan. We now explain the characteristics of this loan.
If there is one loan that offers you a lot of security then that is the payday loan. With this type of loan you always know where you stand. Because in this way the loan amount is fixed in advance and you also know which interest rate belongs to it. The interest is also unchangeable, so it is fixed. This allows you to calculate how much the loan will cost you in total. Now you have discovered that the loan amount and interest are fixed, but the same applies to the term of the loan: The term of a payday loan is fixed. Thanks to that, you know when the loan is repaid, but also what you pay in total for the monthly repayment. Every month you repay a fixed amount to the bank. A part of repayment and interest is included in this amount. With almost every payday loan, you pay more interest than repayment at the start of the term. This is the other way around at the end of the term.
Do you also pay for closing?
You can go for the payday loan from almost every bank and / or lender in the Netherlands. As a rule, people do not pay any extra costs for closing them. With certain lenders, however, you are required to take out a so-called ‘term life insurance’. This will prevent your family from having a money debt if you die prematurely (which of course we do not hope!). Usually a lender simply processes these costs in the interest and you therefore do not pay any ‘extra’ costs for this insurance. You almost always pay a fine if you pay off early. But very rarely can a payday loan be repaid early without penalty. You will also pay extra costs if you do not pay off the payday loan within the predetermined term.
Important tip: Always compare based on interest rates!
Did you know that the interest rates for the payday loan from banks can sometimes be up to 2 to 3 percent apart? Therefore always compare all providers of payday loans or take out a payday loan through a broker who can compare for you. But we prefer to do that; The Home Financier!