But how does the process work? Is it different from the normal payday loan? Does it cost even more expensive? It is these doubts that we will clarify in this text.
How does the payday loan for negatives work?
When applying for a loan, either online or in physical form, the first step the finance company will take is to analyze your profile and case. The intention with this is to assess what the risk is. If a person has no debt, has a fixed income and makes a high claim, this risk is low and therefore the conditions to be offered have everything to be better.
This is not the case with a person who is negative. This term defines someone who has a dirty name because of a debt and therefore appears with this restriction in credit analysis companies. But that does not mean that these people can not take credit, because to get out of this situation often requires a push. However, the conditions must be reflected in the more expensive loan price, as the loan company tries to protect itself more.
Therefore, in making the analysis, the lender is likely to report that it has detected that its name is negative and if it offers a loan for such profiles, it offers the possible conditions. Thus, the process is quite similar to what happens in any loan application. And if done online it is likely that the price and Total Effective Cost (CET) will be lower as there is less spending on structure, staffing and less time wasted on paperwork.
Care to take when applying for a negative loan
Because you are in a critical situation, you need to be very careful and careful when applying for a negative loan. After all, there are always malicious people and institutions to take advantage of this moment. Let’s name some of these cautions below.
Do not accept anything
Yes, timing is important and speed is often required in the process. But that can make you fall into a trap. Never make payments before loan approval, a common scam in this market. Be wary of sites that offer excellent conditions and do not seem serious: they have Portuguese errors, unclear information, no customer service.
Analyze the conditions
Again because the situation is serious, many people can accept conditions that are not good, just have the money in hand. Except that this money will need to be paid and with a high interest rate and a heavy CET, bearing this loss can worsen your financial situation.
Don’t give up on imposing conditions
Even if your profile is negative, you still have power in your financial relationship for the simple reason that there are so many to choose from. The competition is your friend, and if you don’t like the conditions imposed, knock on another door – or, if so, click on another site. It is common for some financiers to charge very, very high interest. Do not accept for accepting, compare a lot.
It is very likely that you were in the red and the name negated because you did not plan financially. Whether you lived beyond your means, saved money, or even because the cost of living is simply too high, now it’s no use crying. Use the money to remedy the situation and not need another loan.
Only opt for negative if there is no other way
Because of the risk issue mentioned above, lenders overcharge for that risk they will take. And that’s why it’s hard to escape from slightly salty portions and a high effective cost. If you have the possibility of giving a guarantee – either car or property – or taking a payroll loan, choose to do so. Interest will be lower on both products. If you have no way, be sure to follow the previous four steps.
Importance of having a clean name
Having a clean name is an important achievement in Brazil, where more than 62 million people have at least one debt to pay and their name is dirty. While defaulting does not eliminate the possibility of borrowing and buying, it is of course a major constraint on your financial life.
First, because this debt will bear interest and monetary correction, and it could become a big snowball. And as long as your access to loans, financing to buy a house, car or anything in installments and also to get a higher limit on your bank, all of which will be seriously compromised.
That is, it will be much harder to take normal steps in your life under the weight of that dirty name.
This is why it is very important to clear your name and pose it as a challenge to be overcome. There are several ways to do this. The first of these is outlining financial planning with realistic goals to achieve this goal. Cutting spending – fewer outings to bars and restaurants, no cable TV – or asking for an increase in work, investing in education to be promoted, and other possibilities to raise income are most welcome.
Being able to invest and generate a good return is also an excellent way to solve this issue. Even with its negative name you can have access to Treasury Direct, for example. Using this money on top to repay a debt is a great way to spend the resources, even if you lose those gains, you will have a clear improvement in your financial life and lifestyle over the medium to long term. It is vital that when applying for a negative loan you have a plan to not only repay that loan but also leave the dirty name behind and reclaim your name in the square. So applying for credit can be a watershed in your life.