Do you have a project and are looking for a solution to finance it? Perhaps you have already heard about the depreciable personal payday loan: here is all you need to know about it.
What is a depreciable personal payday loan?
A depreciable personal payday loan is a loan relatively close to consumer credit, allowing a borrower to enjoy a sum of money to finance a project. This loan is called “depreciable” in the sense that its repayment occurs in several installments staggered over time. Like any repayable loan, the borrower repays each month a sum composed of a part of the capital and a part of the interest of borrowing, itself calculated according to the capital remaining due.
Specifically, the borrower repays a fixed amount each month, but the proportion of principal and loan interest varies over time. Generally, the first monthly payments are dedicated primarily to the reimbursement of interest, while the trend reverses as we get closer to the latest monthly payments.
What is the difference between a depreciable personal payday loan and a loan in fine?
If the repayable loan is characterized by a combined repayment of the borrowed capital and the interest attached to it, certain credits offer a different operation by which the borrower will initially repay the interest (and the insurance costs) before to repay then the capital: it is a credit in fine. The repayment of the capital in the context of the credit in fine is made in one go, at the end of the repayment.
Unlike the repayable personal payday loan, credit in fine is therefore characterized by low monthly payments at first repayments, but it implies to have a large amount of money at the time of repayment of capital.
How to choose between amortizable personal payday loan and loan in fine?
Making the choice between a repayable personal payday loan and a loan in fine really depends on the situation of the borrower. The depreciable personal payday loan is a classic solution for which there is no bad surprise since the terms are clearly established from the beginning. The borrower knows exactly what he is committing himself to and he reimburses monthly payments, the amount of which remains stable from beginning to end.
In the case of a loan in fine, the advantage lies in the fact that the monthly payments are relatively low at the beginning of the repayment period. In addition, heavily taxed households have a tax interest to opt for this solution since they will be able to deduct from their property income the amount of interest repaid each month. This solution is therefore ideally suited for people with high incomes, unlike the depreciable personal payday loan that is better suited to the general public.