How to use microloans

Published by Nancy Reilly on

You are driving and you begin to hear a strange noise in the front of the car. Turn off the radio and confirm your suspicions. You turn to the side of the road, open the hood and call the crane. When you arrive at the workshop and after a preliminary diagnosis, they give you the scare of the day: “The breakdown costs € 375. For tomorrow it is ready. ” You already have the month condemned. And now that? This introduction, based on a real situation, could happen to you. Sometimes we need urgent money to pay for immediate payments, such as the breakdown of the car, take advantage of the offer to buy a new mattress for the children’s bedroom, buy the ticket for your favorite rock band today (they will only do a concert and it’s their goodbye) and endless opportunities that can make you need extra money. The best solution for these cases is to request a microloan, or better yet, a Cash Advance. Let’s see what it consists of.

The solution to meet unforeseen expenses

 The solution to meet unforeseen expenses

Microloans are a form of very short-term financing and for small amounts of money . Perhaps if we were cautious we would do as Joseph recommended to Pharaoh: keep a part of our salary for when the lean days came, or to attend to emergencies, extraordinary expenses or promotions that can not be let go. But when the bank is empty, the best option is to request a microloan. This way of obtaining quick money is regulated by law . Everything is stipulated: the interest rate, the maximum amount to request (€ 500) and the return period (usually one month).

Faster than a bank loan

 Faster than a bank loan

Of course you can go to your usual office to borrow the money you need. Although that is not always possible or advisable. Bank loans are granted based on the client’s credit history. If you have had a problem with your entity, for example: falling behind on a payment, you can generate that you put up to give you the money. In addition, branch managers no longer have the freedoms of other times. Now the request for a loan must be transferred to a committee that evaluates the client’s candidacy, having to justify the expense and lengthening the concession period. The microcredits of hemibank, a company specializing in loans of small amounts in the short term, are granted almost on the spot. This type of product is not subject to the paperwork of presenting the payroll and the credit history, and its immediacy is its raison d’être.

Use the microloan with caution

That the money is granted immediately and you can dispose of it as soon as you enter the bank, does not mean that the microloan is a usual form of financing. The conception of this product is to attend to urgent payments, whatever the justification that motivates it. You should not use it to “plug other holes”. That is why you should never use a microloan to finance yourself in the long term, finance the currency of a trade, etc. Keep in mind that this type of quick loans is expensive financing. In this sense, you must take into account the return periods of the amount. It is best to match the money back with the day you collect the payroll. So it comes to function as a payroll advance, but without having to explain to the bosses. The non-payment of the microloan on the fixed day generates extra costs that can aggravate the economic circumstance. So you must use this tool with sense and logic. It is a solution to meet the extraordinary payments that you could not otherwise face.

Tips for using the microloan

 Tips for using the microloan

Microloans are not subject to explanations or justifications. We leave that for the banks. They are an option to have quick money and no hassles. What does not prevent that you should justify it to you. Before applying for the microloan, make a budget of the money you need. So just ask for the right and it will be easier to return the amount. The budget has a double purpose: justify the credit and adjust the amount to the money that you need. Do not use the microloan to pay other debts. Do not cover a hole with another hole. This is not the solution you are looking for. The microloan serves to meet an extraordinary expense: a breakdown of the car, a special gift for your partner, give yourself a whim… Be aware that you have to return . Apply for a loan that you can take with your economy and match the payment with the day of collection of your next payroll. Think of it as a payroll advance, with small interests. Skip the deadline of return can bring more than a headache. Read the conditions. It is a contract between two parties. Although the process is fast (the money is available in your account immediately) you should be aware of the conditions and clauses (deal with a company, not an NGO). Take advantage of the microloan, but make it with sense.

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