An unsecured payday loan can be useful if you want to collect loans or if you need money to make a larger private purchase. A payday loan without collateral is often called a consumer loan or a consumer loan.
Since you do not need to provide collateral for the loan, the offer and interest rate on a loan will vary based on your own finances and credit score.
Apply for one payday loan
In the list below you can see different Norwegian payday loan providers, including Arcadia which compares different banks for you, or Rightchoice Finance which finds the best loan based on the applicant’s situation. Here you can see different interest rates and how much you can borrow.
Unsecured payday loan
A payday loan or consumer loan is usually unsecured. The fact that a loan is “unsecured” means that you do not provide collateral as you do for example with a car loan where the bank has collateral in the car you lend money to.
A secured loan can also be a mortgage where the bank pledges the house. This security can be used by a bank to cover the loan if you do not meet your monthly repayments.
However, security such as a house or a car is not required to take out a payday loan. As the risk increases for the banks, the interest rate on an unsecured loan will also be higher than in a secured loan.
A loan to collect loans and debts
One can never get rid of debt by taking out the loans with a personal debt, but you can still get some benefits, including:
- Possibility of lower interest rates.
- A customized repayment schedule.
- Fewer fees and easier overview.
It is not always wise to refinance your debt, here is an article that goes over whether debt refinancing is wise.
A loan for purchase, travel and consumption
Borrowing a loan to spend the money on general consumption is not advised. Here it is quickly made to end up in a consumption trap where debt is used to support expensive consumption and money wasting. Instead of taking out a payday loan for consumption, you might want to take other measures first, how about:
- Increase your income.
- Be more satisfied and learn to say no to impulse purchases.
- Set up a personal budget and get control over your money.
For a trip, a payday loan can be an opportunity to finance an expensive trip. Use your own budget and plan so you can pay off the entire sum in as short a time as possible.
Larger purchases or anticipated expenses can come creeping in when you least want them. A payday loan can finance these purchases, but again you should budget for a quick repayment. To avoid such a happening again, it is recommended to build up a buffer with emergency money so that in the future you do not need to take out a loan.
Take out a loan to start an AS?
Of course, the best way is to save this amount in advance, but I have taken out a small payday loan myself, giving me what I needed to change an individual company into an AS.
You need a minimum of USD 30,000 and will be a much safer alternative than an individual company.
Understand the details of a payday loan first
Although a payday loan can be helpful, it is important to understand not only what the benefits are, but also the negative aspects. In a good private economy, you have a low debt figure and a good overview of the figures.
Do you manage the installments? Use a budget and see what you have to deal with each month. If you do not have a good enough margin in the budget to make a new loan, consider other options.
What is the total cost of the loan? Like any other loan, a consumer loan will also cost you interest and fees. Look over what the total amount of the loan will be.
Pay down in less time. What matters most about the cost of a loan is the repayment period you choose. If you manage a slightly higher monthly amount and pay down the loan one year ahead of time, the savings will be great.
Is it a necessity? What is your motivation for taking out a payday loan. Is the loan a necessity or can you manage without it. Neon times can be the smartest decision to sleep on it.