How to manage your payroll loans

Manage payroll loans

Firstly, payroll loans are one of the most advantageous options on the market for those who need to borrow money. 

Especially with lower interest rates and longer repayment terms, payroll loans are already a favorite among customers.

Another possibility offered by a payroll loan is to take out more than one loan simultaneously, respecting the limits of the assignable margin.

What is the assignable margin?

Taking out a new loan will always be subject to confirmation of the availability of a consignable margin to borrow a new amount. 

This margin is the device to prevent the client from becoming over-indebted, establishing a limit on the value of the installments that will be discounted from the salary or benefit. 

The amount to be used to repay the loan cannot exceed the limit established by law, which is generally between 30% and 35% of the applicant's salary, retirement, pension or benefit.

Is it worth having more than one loan at the same time?

The easiest way to understand whether it is advantageous for you to take out another payroll loan simultaneously is by observing your financial capacity. 

Remember that the purpose of a loan is to help you pay your bills or facilitate the realization of a project or dream. Don't let easy credit put your finances in even deeper trouble. 

When considering taking out new payroll loans, consider two groups of elements:

• Advantages: fast and easy access to money; cheaper credit; flexible terms; release of funds even for those with bad credit.
• Disadvantages: margin impairment; creation of long-term debt. 

I have several payroll loans, how can I organize them?

When you have multiple loan agreements in effect, you need to be even more careful and attentive to avoid losing control of your financial life.

It's not uncommon for many borrowers to commit their entire loan margin and not know what to do. 

There are two possible ways to manage your payroll loans in this regard.

Portability

The payroll loan portability mechanism was created to boost competition among financial institutions and to facilitate consumer access to new proposals. 

In practice, you transfer your debt to another bank or financial institution, consolidating your various contracts into one. This is a good solution for those struggling to manage their existing loans. 

Debt portability is usually advantageous, as the interest charged is lower and the installment terms are more favorable.

Refinancing

Another way to organize your payroll loan agreements is refinancing, which is a way to obtain credit from your current loan without having to take out a new loan.

This is a particularly useful alternative for those who have already paid off part of an active contract and need a new loan.

With this type of refinancing, you renegotiate your debt with the same bank or financial institution, returning the contract to its original term. This transaction pays off your current loan and begins a new contract, freeing up more funds. 

So, did you like this content? 

Assess your current financial situation and see which alternative is most appropriate for you to manage your current payroll loans.

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Manage payroll loans