Consumer loans meet an immediate need for liquidity that savings and various investments cannot meet. They therefore make it possible to quickly obtain funds to buy capital goods or participate in various projects. payday loan or earmarked loan, here’s how to choose.
The particularities common to payday loan and assigned loan
Whether you choose a payday loan or a restricted loan, be aware that they are both part of what are called consumer loans. They are issued by lending organizations: banks or credit institutions. Each of the loans allows borrowing between 200 and 75,000 USD. The duration of their contract must be more than 3 months.
payday loan in detail
The payday loan is a so-called “unrestricted” loan, that is to say that no reason for expenditure must be provided when the loan contract is concluded. The borrower is free to buy what he wants with the amount obtained. The repayment terms are determined when the contract is signed in order to fix the monthly payments and the duration of the repayment of the loan. The advantage that personal credit also has is that the payday loan rate is fixed. There is therefore no surprise of additional costs at the end of the contract. Granted rather easily by lenders, it can be repaid in advance if necessary.
The specifics of the affected loan
Unlike the payday loan, the restricted loan is concluded for the purchase of a property defined in advance. The reason is specified in the loan contract and proof of expenditure must be provided. The total amount of the loan must therefore be entirely spent for the stated need.
The affected loan provides better protection for the borrower because it can be canceled if the property for which the contract was concluded is defective, if it has not been delivered or if the sale of the property has been canceled. The loan is therefore no longer necessary and the borrower gets rid of all repayment constraints, which is not the case with a payday loan. He may also be reimbursed the monthly payments paid if the loan has already taken effect.