At any time you may find yourself in a life situation where you need money fast. If you are not able to borrow money from your family or friends, the only solution remains credit. Many people are afraid of borrowing because they can hear a lot of indebtedness, but with a well-chosen loan it cannot happen. If you want an unnamed loan target, it can be a Payday loan or a free use mortgage. But is it better to take out a personal or mortgage loan? You can get personal information about your credit at the branch, or you can use Lucy Snowe’s credit calculator. If you feel that you are having trouble getting information about your loans alone, feel free to seek the help of a professional who will be sure to find the best deal for you.
In this article, we have collected when to choose a Payday loan and when to use a mortgage for free use. Which ones have their advantages and disadvantages, and how best to use them. What is important to note here is that we examined the case where both loans have fixed interest rates over the term. Thus, rising interest rates should not be a problem, nor will the installment installment be higher over time, so it is safer than a variable rate loan. The majority of Payday loans have a fixed repayment date, so interest rate risk can be excluded from the outset.
Let’s look at the main features of the two loans!
- no cover is required
- income based borrowing, so it is thoroughly examined
- credit assessment takes 3-4 days
- usually a few hundred thousand forints to 7 million forints
- low start-up cost (around 20,000 HUF, this is the conclusion fee)
- personal documents and bank statement / employer certificate required
- required to take out real estate collateral, which is also charged with the amount of the loan
- an adequate amount of income is required along with the coverage
- The loan has a lead time of 1-1.5 months
- it requires documentation for a home loan
- the minimum amount of credit that can be claimed is usually around HUF 1 million
- high start-up costs (around 80-90,000 forints, such as valuation, title deed, mortgage registration, and notary fee)
To sum up, everyone has to decide which one to choose. It is worth considering which of the two types of loans you can do better, because nowadays the APR of the two types of loans is very close to each other. If you need a smaller loan amount, you may be better off with a Payday loan because you do not have to mortgage your home or your start-up costs are lower. This will also be the solution if you do not have real estate coverage. If, on the other hand, you want to apply for a larger loan, there is no other option but a free mortgage. Choosing a good bank and a credit facility can also be very beneficial. The high start-up cost, or part of it, may be reimbursed within the framework of a bank promotion.
Before you start borrowing, make a budget so that you know exactly how much you can borrow and that you will be able to make monthly payments. If the amount you originally planned to raise is too high, you may want to add a smaller amount for safety reasons, so you can avoid debt.