Different banks offer a payday loan simulation to give you more insight into the financial consequences of taking out a payday loan.
Banks benefit from this because they can show their customers clearly what the consequences of taking out a payday loan are for financial reasons. You, too, benefit because you see in a clear way what the possible consequences are.
The reason for offering a payday loan simulation
Most loan providers offer a payday loan simulation for free. So you can see it as an extra service from the bank, but the bank often benefits from this. Often a simulation is used to see if you are eligible for certain loans, because you have to meet certain conditions for certain loans in order to be able to take out the loan. By already determining this via a payday loan simulation, the bank prevents a lot of people who are not eligible for a payday loan from applying for such a loan. Furthermore, a payday loan simulation often ensures that you are not confronted with surprises when you take out a loan, because you only see the consequences of taking out the payday loan afterwards. As a result, the bank prevents people from paying the loan afterwards.
Performing a payday loan simulation
To perform a payday loan simulation you must enter a number of details to make the calculation. For example, the desired amount and the term of the loan are requested. You are also often asked for your income data and for some also for the financial situation. Not with every payday loan simulation, they are equally extensive, it sometimes pays to complete multiple simulations to look at the outcome.
The information you enter here will not be included in the final application for a payday loan. The information that is often requested when applying for a payday loan is often many times more extensive and must be supported by documents. No rights can be granted to the payday loan simulation. It is only an indication of the response to the request for a payday loan. In practice, many people use this simulation before they apply for a payday loan in order to have an idea of the consequences of a payday loan in advance.
A simulation is not only offered with payday loans, but also with other types of loans, such as a car loan and taking out a mortgage, a simulation is often offered. Simulations have many advantages for both parties and it is therefore advisable to be properly informed by means of a payday loan simulation before you submit an application. You then have an idea of the bank’s response in advance and you know where you stand. Annoying surprises because you have taken out a payday loan are prevented in this way.