Payroll credit is a financing option granted by regulated institutions such as banks or Multiple Object Financial Companies.
If you receive your salary through formal financial institutions, you can easily apply for one of these credits.
The advantage of these credits is that, the bank collects the loan payment automatically when your boss makes the payment of your salary. Therefore, you do not require a guarantee or guarantee.
But beware! You must know perfectly your ability to pay, so that you do not run out of money from your essential expenses, after they discount your credit payment.
The average interest rate on payroll loans granted by regulated institutions is 24.81%, according to the Bank of Mexico (December, 2018).
However, not all loans with a low rate are the cheapest, you should also take into account the commissions for opening, life insurance, unemployment insurance, therefore, the key is to compare above all the Total Annual Cost (CAT).
For example, the payroll loan 24×7 payroll has an interest rate of 10%, but the CAT is 44.6%.
What are payday loans?
Payday loans are a form of financing for individuals that can be granted to any individual, without having a payroll account in the bank, in which the loan is requested. Here the risk is higher, since there is no guarantee of salary, therefore, interest rates are usually higher.
The average interest rate on payday loans granted by regulated institutions is 39.49%, according to the Bank in Mexico (December, 2018).
As you can see, only one of these credits has a lower interest rate compared to payroll loans. Therefore, check the total amount to be paid very well.