Payday Loan Simulation: How to Simulate a Loan Effectively

Over the years, the demand for credit has gradually increased exponentially thanks to the favorable period of interest rates at historic lows and the greater flexibility of banks and financial institutions in granting payday loans. Making a little dream or the big project you had in mind for some time has become easier thanks to the online presence of lots of useful information to make you more aware and practical simulators that help you choose the best product for you, simplifying your life.

Do you want to find out what steps you need to do and what you need to know to prepare a perfect payday loan simulation ? Then read this guide, in which are described in detail all the steps you need to take as you approach financial products of this type.

Payday loan simulation: preliminary information

Payday loan simulation: preliminary information

You have basically two ways to simulate a personal payday loan: the first is to go to a branch of the credit institution that you have chosen to turn the payday loan on and contact an operator at the counter ; you can alternatively choose to inform yourself privately about the best product for you, collecting information on the net or asking for advice from a qualified specialist. Moreover, many portals on the web allow you to make real comparisons between the companies that offer the best market conditions, allowing you to always choose a cost-effective and sustainable financing to be paid in the future . The portals on the net offer a sufficiently accurate count of the installment that you will have to bear or they often provide general indications on the feasibility of the request, even before starting the entire application process.

How to correctly calculate the payday loan

The installment of a personal payday loan consists of a series of different items, which together contribute to the total amount to be charged monthly to the customer and contain not only the repayment of the amount initially payday loaned, but also all the cost components of the credit spread over its duration. The value that identifies how much it actually costs to maintain the payday loan is called the APEG – annual total effective rate – and within it the fixed costs applied by the banks are incorporated, such as those for the production of periodic statements or for the automatic debit of the installment on the current account.

Together with the APR is considered the TAN – which stands for nominal annual rate – specifically related to the cost of credit for the customer, separated from all other cost items that however impact on the amount of the installment. The monthly payment is simply calculable ; just input all the data required by the simulation form to the video without omitting any of them and the result displayed by the system will already be a first count of the amount that will need to be incurred monthly for the initial credit request, allowing you to plan it better.

The data required to perform a payday loan simulation are the following:

  1. The amount you need to start your project : carefully weighing the choice of the amount to be applied to the financial institution or institute can make the difference between a beneficial payday loan and a very expensive one. Depending on the amounts requested by customers, banks apply different rates. If you are a low credit risk customer, it may be cheaper to opt for smaller amounts of credit solutions or shorter durations to avoid having to pay too much interest to the financial institution.
  2. For how long you are willing to pay the installment : another important data that can significantly change the request for funding and its duration. Often, a very long payday loan is associated with greater risks for the bank not to see the credit returned, so it is understandable that as the duration is extended, the interest rate applied to the credit also increases.
  3. What is your income situation : Your income situation is definitely important for the success of the simulation, which will be more effective the more you will be punctual in entering your income data within the request form. Depending on the type of payday loan requested and its characteristics, the simulation performed may slightly differ from the actual installment that will result from the officially basted practice.