Our readers often ask us whether a loan or a salary-backed loan is more convenient, so let’s try to clarify things with this article.
Salary-backed loan or personal loan
If you are considering the possibility of obtaining financing to deal with unexpected expenses or to carry out your projects, you are surely wondering whether it is better to opt for a salary-backed loan or a personal loan.
In this article we will analyze the main features of these two credit options, in order to help you choose the one best suited to your specific needs.
Salary-backed loans: pros and cons
The salary-backed loan allows employees and pensioners to obtain liquidity through a direct monthly deduction from their salary or pension, within the limit of 20% of the net amount.
Among the advantages we find:
- Simplified approval, even for those with a bad credit history
- Competitive interest rate and fixed installment, for long-term financial planning
- Flexible duration up to 10 years
- The disadvantages are the limitation of the available budget due to retention and the long-term commitment.
Personal loans: pros and cons
Personal loans can be used for various purposes and are disbursed quickly. However, they usually have:
- Higher interest rates than the sale
- The need to present a guarantor in some cases
- Greater repercussions on creditworthiness in the event of non-payment
- But they also offer versatility of use and no direct salary deductions.
Which is more convenient?
The choice depends on factors such as personal financial conditions and the urgency of the financing.
The salary-backed loan can be more advantageous in terms of costs and ease of access. It should also be considered that it already includes insurance guarantees, which is not an irrelevant aspect.
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