The payday loan, the amount of which is capped at 75,000 dollars, is primarily intended to finance life projects, linked to everyday consumption, this financing is not necessarily initially planned to finance the purchase of a house, land or apartment but considering a real estate purchase remains possible.
Buying a home with a payday loan
The payday loan is an unrestricted consumer credit, that is to say that it can be obtained without supporting document from the borrower, the latter can establish a request to the bank and defines the amount that He wishes. The payday loan is capped by law at 75,000 dollars, you cannot generally exceed a period of 12 years for repayment. This loan is primarily intended to finance everyday consumer goods, we will use it for furniture, household equipment but also ad hoc needs to buy a car, finance a vacation or any other project.
Buying a property with a payday loan implies that the property in question is less than 75,000 dollars or when the borrower has a personal contribution to add to the amount of the consumer credit. This loan is not intended to buy in real estate, it can still be used in this direction, even if the banking establishments advise against it.
Real estate purchase and payday loan: the limits
The amount of the loan which is capped at 75,000 dollars represents the main limit, that is to say that by default, the payday loan cannot be requested for real estate purchases greater than these sums and again, it is necessary that the borrower’s capacity is compatible with the financing.
The rates offered on payday loans are also higher than home loans or restricted consumer loans. Without having visibility into the use of sums, banks tend to offer higher rates to guarantee the repayment of sums.
The payday loan will not offer guarantees as solid as the mortgage, we are obviously talking about the release of funds related to the real estate purchase, we are also talking about the mortgage guarantee and specific insurance for the purchase of a house or an apartment. It is a security for the purchase.
payday loan to renovate a home
Some banks still offer personal credit offers to buy a property, it is a financing solution that will rather be adapted to a purchase in the old in order to renovate. Some houses are very accessible and do not require exorbitant amounts, you can buy a house from 20,000 dollars in some campaigns, which can allow a nice operation by renovating everything. On amounts of this type ($ 30,000, $ 40,000 or $ 50,000), the payday loan for real estate as it is often called is a real financing solution to access the property or invest in the rental.
This loan can therefore finance the purchase of the house, the renovation materials and the various costs that will be linked to the acquisition. The interest being not to have mortgage guarantee on the real estate or of guarantee but it is necessary a sufficient capacity of indebtedness to be able to contract this loan and to repay the maturities.