Payday loan or Transfer of Fifth? It is one of the most common doubts among those looking for additional liquidity to carry out new projects or face unexpected expenses. The answer …
Payday loan or Transfer of Fifth? It is one of the most common doubts among those looking for additional liquidity to carry out new projects or face unexpected expenses. The answer obviously depends on the situation and individual needs. Here then are these two forms of financing in comparison, with practical examples to help you choose your loan in an informed and aware way.
Payday loans or assignment of the fifth: discover the differences
The payday loan and the assignment of the fifth have in common the fact that they are fixed-rate loans, but they are different instruments from many points of view. Here are the main differences.
The assignment of the fifth can only be requested by employees and retirees, while payday loans are aimed at anyone who can prove that they have an income.
However, the assignment of the fifth is more including on at least two fronts:
- age, because it has a limit of 85 years, against 70-75 of payday loans;
- unlike payday loans, solvency is in fact also open to protestors and bad payers, does not require additional mortgages or signatures and is always covered by insurance.
In general, the ceiling for loans with Employee loans is higher: up to 75,000 dollars can be obtained (with amortization plans for 2 to 10 years), against the limit of 30,000 dollars that usually characterizes payday loans.
To always ensure decent living conditions, the installments of the Transfer of the Fifth never exceed 20% of the net salary or net pension, equal to 1/5 of the total. This limit does not exist in the case of payday loans, which therefore impose more prudence at the time of subscription, in order to assess the current sustainability of payments.
Terms of payment
One of the most appreciated features of the Employee loans is the method of collecting the monthly installments, which provides for the automatic deduction from the salary (or pension), solving the risk of insolvencies. In payday loans, it is up to the customer to choose how to pay off the debt (with postal slips, debit on the current account, etc.).
When to choose a payday loan?
That of payday loans is, in some cases, a forced choice. It is in fact the only way forward if you cannot count on a stable employment contract, or on a pension.
When to choose the Transfer of the Fifth
If you are an employee or a pensioner, the Transfer of the Fifth is undoubtedly the ideal choice for obtaining additional liquidity. It is, in fact, a simple and practical form of credit, which allows you to plan the repayment of the loan in complete tranquility, with installments ranging from 2 to 10 years. But that’s not all: to this must be added the convenience of automatic payment, the security of installments always within your reach and mandatory insurance coverage that protects you and your family against all risks.