How much Payday Loan can I Afford?

Research and statistics show that since 2014, more and more people are using payday loans for a variety of purposes , and many of these people are unable to assess the amount of credit they can actually afford to pay.

Although it is not possible to answer this question universally for everyone, but we have put together with our experience as easy to understand as possible Leitfanden with the most important tips and hints. This should allow everyone to make a useful assessment of how high a loan should be in order for it to fit well into the overall personal financial situation.

The steps listed here you should look at in any case already once before with the payday loans Compare begins.

The budget statement & cost statement

The budget statement & cost statement

The first step towards the question: “How much credit can I afford?” Around which one just can not get around is a detailed statement of the current income and expenditure . In the case of longer credit terms, of course, this also has to include whether the compiled factors are likely to change over the course of time, such as a job change or a rent increase.

It is best to start with the most obvious, easily predictable and regular costs and revenues, such as:

Revenue:

➔ salary
➔ Other sources of income

Expenditure:

➔ rent including utilities
➔ Insurance
➔ Car / gasoline
➔ Internet / telephone / TV
➔ alimony payments
➔ Existing costs for installments of existing payday loans
➔ Any memberships in the gym etc.
➔ food
➔ Leisure / shopping / going out

If you subtract the expenditure from the income at the end, you get an approximate assessment of the financial scope that still allows the everyday life . Here you just have to be honest with yourself and see if you think you can afford a loan. If, for example, after all spending 200 euros left, you should think twice whether you really want to pay installments of 50 € a month or can.

This list is also important because many banks set flat rates first and accept for the head of household about 700 and for each additional person 250 euros, which remain at the end of the month. Here you should be able to assess whether these guidelines really apply to your own situation .

Apply for a payday loan

Apply for a loan

Before it goes to the actual loan application, then you should then necessarily take a loan comparison. If a loan allows for special repayments, you can be more flexible and pay off the installments earlier than originally planned. The same applies to the possibility of suspending installments, some providers allow this possibility, should one get into a financial bottleneck.

The purpose of the loan can also be important. For example, you will not get any special benefits for a loan for the purchase of furniture, but if it is a car or even construction loan, you can hope for much better conditions. Because there is a direct equivalent, which serves the bank as collateral.

credit comparisons

credit comparisons

Of course, you also have to pay attention to interest rates and installment rates on payday loans to answer the question: “How much credit can I afford?”. By the way, you have to be careful here – you can not always rely 100 percent on the information that calculates the big loan comparisons, for example, based on the information you make in the application, as we do for example in ours financingore experiences have shown.

The comparison is useful in any case, but a complete and reliable assessment of the cost of a loan is in the end usually only possible if one holds the offer of the bank in the hands. That’s why serious credit comparisons are never binding when it comes to soliciting quotes and never charge any pre-payments.

How much credit can I afford: conclusion

Regarding the question “How much credit can I afford?” One can say on the one hand, that it can be answered individually only for each one – on the other hand one can receive with a bit of work but also a fairly precise assessment . If you have looked through your own finances in peace and leave a little leeway for any changes, you can quite get involved in a loan, without having to fear problems.

If possible you should generally look, of course, that one prefers less and not just on the financially feasible limit.

Loan Without Unemployment Insurance

Many people who wish to apply for a loan are not in the comparatively comfortable position of many non-self-employed workers who are at least partially covered by the unemployment benefit I if their employer goes bankrupt or job cuts go on for up to 12 months.

Many self-employed and freelancers who do not contribute to unemployment insurance are therefore asking themselves: Can I get a loan without unemployment insurance and how do the banks handle it if the income from their own business is one of the main sources of income? Therefore, some may wonder why uninsured loans are commonplace today and that many more borrowers than the self-employed can use this loan. The best way to approach the topic is to take a closer look at the unemployment insurance scheme. And then assess how their payments could affect the credit rating or the repayment probability.

Unemployment insurance is an additional credit rating

Unemployment insurance is an additional credit rating

For the bank, the payment to unemployment insurance means, with a few exceptions, all non-self-employed persons a change in current and future possible cash flows. The net salary drops by a low, single-digit percentage and the employer makes his own contribution to the unemployment insurance. But the consequences of a termination are significantly mitigated: After the considerable reduction of protection against dismissal, the employees without unemployment insurance would only stand with a basic security whose income is not attachable.

Therefore, if there is a proof of salary and income and the additional contractual assurance that no notice has been given, the banks assume that the employment relationship will continue! The Unemployment Insurance Loan thus starts from the existing monthly positive revenue surplus and continues to write this revenue into the future. For maturities up to 24 or 36 months, this approach is relatively uncritical and there is little likelihood of non-repayment.

In the case of loans without unemployment insurance, industry affiliation also counts

In the case of loans without unemployment insurance, industry affiliation also counts

The situation is different with self-employed and freelancers of all kinds. Here, either the tax assessment of the previous year, the current “credit” on the company account or a checking account and any existing business evaluations are used to assess what the monthly revenue surplus looks like. The problem here is particularly for companies with few employees: If the founder of the company for a long period of sick or loses the company too many customers, the repayment may be in danger.

Then, however, there are no benefits from a payment of unemployment insurance available, because previously no payments were made. Therefore, the bank has to calculate the repayment probability and the term of consumer loans for all self-employed persons according to a different pattern.

Over time, the bank learns from many completed and most fully repaid loans which factors could be crucial. This is also the reason that new credit providers usually start with loans for employees and employees. The more complex products – such as the loan without unemployment insurance – are then later added to the product range.

Loan for Rent Deposit Without Private Credit

According to the statistics, there are about 5 million relocations per year in Germany, affecting more than 8 million people. A move brings in itself huge expenses. This situation is exacerbated by the security deposit, which is payable at the signing of the contract.

Although the legislature limited their amount to 3 monthly flat rents, it is nevertheless a considerable amount, especially if an additional brokerage fee is due. Often a loan for the rental deposit without Private Credit seems to be the only way out.

Pay the rent deposit in installments

Pay the rent deposit in installments

It is of course possible to take out a loan for the rental deposit without Private Credit, but not necessarily because of the costs associated with the loan. There are better and, above all, cheaper solutions to pay the rent deposit. The legislature has recognized the large burden that represents the rent deposit and therefore created the opportunity to pay the amount in 3 installments. Thereby you do not incur any costs. The landlord is obliged to agree to the installment, if you ask him. This makes depositing the deposit affordable for most.

What other options are offered?

What other options are offered?

If you are lucky, you may not need to pay any rent deposit or take out a loan for the rental deposit without Private Credit. For example, you can take out a rental deposit insurance. This works by insuring the landlord with an amount equal to the rental deposit. As a tenant, you will be released from the payment of the deposit.

Instead, you have to pay a small premium to your insurance company every year. If you want to move out again, cancel the rental deposit insurance. Of course, you can only use the insurance if the landlord agrees. There is another possibility, which should be interesting especially for unemployed and recipients of Hartz 4. This group of people usually does not get any credit for the rental deposit without Private Credit, instead they contact their local Job Center.

If there are valid reasons for your move, the office will in many cases take the bail. But that does not affect brokerage days. You have to bear their own costs. The trick with the rental deposit is very simple. You need to talk to the landlord or the job center and report your problems, and you will also get the support you need to solve your problem. But wrong shame or shyness will not help you because nobody can offer you help if you can not or do not want to communicate your problems. A loan for the rental deposit without Private Credit would be possible, but is expensive.

Loans with Guarantee

Loans with a guarantee are often the way out of a credit crunch. A credit gap can be closed and a loan becomes eligible. Nevertheless, it is not always easy to find a solvent guarantor. In addition, the guarantee implies additional moral responsibility for the borrower. Therefore, possible alternatives should not be frivolously excluded.

Loans with guarantee – use possible alternatives

Loans with guarantee - use possible alternatives

Loans with a guarantee are basically not a bad option. Nevertheless, it is uncomfortable to burden others with their own financial problems. In addition, any guarantee involves an unmanageable risk to the guarantor. Hardly anyone, apart from civil servants, can be sure of his job. In addition, nobody knows their own health future. Each loan is therefore always at risk of becoming distressed.

In many cases, the bank only proposes a guarantee, as it represents the easiest credit protection for them. Similarly, in many cases, collateral would be possible to secure the loan. For example, a car letter or pension plan could be used as security. It would also be conceivable, of course, the assignment of a landlord or the land register.

Even a slightly higher interest rate should make the collateral security worth the borrower. Loans with a guarantee, which only benefit the borrower, should therefore also be secured by a residual debt insurance. Alternative forms of credit are also worth considering.

Compare alternative providers – avoid the guarantee

Compare alternative providers - avoid the guarantee

Alternative providers, without a bank, may be helpful. The private loan is often possible with lower hedging obligations. Contacting private investors is easy to make via one of the major portals. Private investors are looking for safe investments, but they are more risk-averse than banks. Almost every loan request can be realized on its own.

If the credit is a consumer desire to be satisfied, then often enough a small loan from the Internet to do so. Small loans are convenient to apply for and only undergo a simplified credit check. Even without collateral, loan amounts of up to € 5,000 can be approved without difficulty. The payroll and the clean Schufa are enough.

Investments requiring a guarantee

Investments requiring a guarantee

For example, if you want to buy a house, you can seldom afford it at your own expense. For large loan amounts, every interest-saving option is important. The big investment guarantor is therefore an important instrument for significantly improving creditworthiness. The steadily increasing property value of the property limits the liability risk for the guarantor. If the loan becomes distressed, then there is a good chance that the sale amount will cover the loan.

Loans with a guarantee for smaller sums should be reserved for cases where there is no other way. Nice examples would be the credit for the junior driver’s license in training or the credit for pensioners. On their own, both groups manage to pay the loan, but the grant is tied to a guarantee.

Online Loan for Trainees

Many people looking for an online loan for trainees face the problem that their income is too low and their future too uncertain to convince the bank of its creditworthiness. For this reason, it is usually very difficult to find a suitable lender.

loan comparison

loan comparison

Similar to another loan, a comparison of the various providers on the Internet should also be carried out for an online loan for trainees. Above all, it is advisable to pay attention to the length of the term, the possible loan amount and the amount of the monthly repayment installment. If the desired amount of credit is only a small sum in the three- or four-digit range, lending should not be a major problem.

Once the appropriate online loan is found, the trainee can go to the bank’s website, complete the application and then send it directly to the bank. Now an immediate credit check is carried out, whereby in particular the private credit should play a crucial role. If there are no negative entries, the online loan for apprentices can be provisionally approved.

For a final decision, the trainee would have to send his proof of income and other documents to the bank. This would have to be done by mail. In this context, care should be taken that lending can only be granted to persons who have reached the age of 18 years. Loans to minors are generally not granted.

credit conditions

credit conditions

An online loan for apprentices must be paid in regular monthly installments. These installments are not only the repayment amount but also the interest. The latter can in turn be subdivided into the borrowing rate and the other costs or fees that arise during the lending and / or during the term.

For this reason, the interest rate to be paid by the borrower is also called the annual percentage rate. Often, banks will only grant an on-line loan for trainees if the end of the term does not extend beyond the end of training. Otherwise, the trainee would have to find a guarantor or a co-applicant who ideally should come from his own family. Of course, this person must meet the criteria for a normal installment loan and have, for example, a positive private credit and a regular, sufficiently high income.

In a car loan, the situation is slightly cheaper dar. Here is the loan amount of a material value, which can be seized in case of persisting arrears of payment. Buying a new or used car is a very common reason for wanting an online loan for trainees.

Loan for Marginally Employed

Anyone who has low-income jobs these days does not have an easy time. Not infrequently, he is excluded, both in the social sense and in the financial world. Many do not think that coping with a very low salary is very difficult, especially if children live in the family. Then it gets even closer.

The applicant receives child benefit, but it will not be enough in front and in the back. Banks are increasingly visited by this group of people to ask for a loan for marginal employees. These will be immediately disappointed, because they will get the statement that they will not get a loan for marginal workers. Not even the house bank is ready, because they know the financial position of the customer exactly.

No credit for marginal employees – every bank like that?

No credit for marginal employees - every bank like that?

There are countless forms of credit that can be taken. Consumers think that maybe they will succeed at another bank and start looking. This search will not be successful, because as security always a proof of income must be provided, with an attachable income. Since this proof can not be provided by this group of persons, they are also excluded from other banks.

A loan without private credit is taken abroad and it has certainly heard many of them. private credit works only with banks in Germany. Thus, the private credit fails as a security, because banks always check the credit rating. In order for the foreign bank to provide a loan, a salary statement is also required here. The salary is often the only security that can be provided. Thus, a loan for marginal employees abroad is not possible.

Are there alternatives?

Are there alternatives?

The only alternatives are to find a private individual who is prepared to take the risk that the loan amount can not be repaid and takes out a loan or guarantees the loan as a guarantor. It will be very difficult and often these people can only be found in the family or among friends. If a sum is borrowed here, then this should absolutely be recorded in writing. It would not be the first time that family members or friends were in trouble over money. This can not happen with a contract because both sides know what they are and what their obligations are.