Reasons Why Payday Loans Have the Lowest Rates

The payday-deductible loan has been one of the most accessed forms of credit in Brazil. Those entitled to credit assignment already know this loan and know that the interest rates are lower.

Payment method

Payment method

There are several reasons for these lower rates. The payment method is the main reason for such an advantage. Compared to other credits or personal lines, payday is up to ten times cheaper.

Want to find out why payday loans have the lowest interest rates? So check it out!

Auto discount

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Discounted directly upon receipt (benefit or paycheck), the Bank is assured that the installments will be paid. The beneficiary or public servant at the time of the loan is aware that every month will have that discount and will receive the salary, less the amount of the installment.

Low risk of default

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Even discounting the receipt of the retiree, pensioner or civil servant, non-payment of installments may still occur. But this greatly decreases payday delinquency. Therefore, the rates are much lower compared to other types of credit, such as revolving credit or personal loan, for example.

Payable margin

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The payable margin is the monthly limit that can be compromised from payday or payday loan benefit.

This amount was set to prevent interested parties from getting into debt. Thus, there is no way to contract credit higher than the allowed amount.

Thus, all interested parties must respect a monthly ceiling on what can be spent on payday loans. Namely, each person can commit up to 35% of their net payment (being able to use 30% of their loan payment and the other 5% for payday credit card).

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