Payday loan: fixed rate or variable rate?

The conditions of consumer credit can vary from one credit to another, whether it is a bank loan or a loan between individuals. The greatest attention to the rate of the loan is required for signing a payday loan: it is he who largely determines the cost of credit. Two proposals are then available to the borrower: the fixed rate and the variable rate. an elucidation on



The fixed-rate is by definition invariable, it has many advantages for those who prefer stability:

  • the rate that appears on the credit contract at the time of signing remains the same throughout the duration of the payday loan;
  • the fixed rate makes it possible to repay equivalent maturities each month;
  • the fixed rate provides significant repayment stability for a long-term payday loan;
  • the overall cost of consumer credit is known upon signature;
  • the fixed rate makes it possible to block a lower rate in the event of fear of increasing interest rates later.

In return, in the event of a fall in interest rates on the markets, the borrower who has chosen a fixed rate for his consumer loan cannot benefit from this reduction.




The variable rate differs from the fixed-rate since it follows market fluctuations. The rate is indexed to indicators that can modulate it upwards or downwards. The flexibility that has its advantages:

  • in the event of a fall in interest rates, the borrower thus pays lower monthly payments than what was initially planned;
  • The cost of borrowing can be very attractive in the case of a short-term loan at a time when rates are falling.

Conversely, however, if rates rise, so do the monthly payments, and the cost of the loan can be very high. The borrower can then, if he wishes, make an early repayment to avoid continuing to suffer the increases.

The last possibility is offered to the borrower, it is the capped variable rate. The rate then remains variable, but within a predefined range. For example, a rate capped at one point cannot fall or increase by more than 1%.

The new zero-interest loan: the solution for first-time buyers

He had already mentioned participation up to 40% of a real estate project, as well as raising the eligibility ceilings. An extension of the deferral of monthly payments was also on the agenda, as well as the scope of the system for old dwellings located in all rural municipalities, instead of a shortlist of 6000 municipalities today. On the other hand the vagueness persisted as for the application of the PTZ + in the old one on all France. The veil is definitively lifted, yes first-time buyers will be able to use this lever to become the owner of a built dwelling, regardless of the geographic area.

What the 2016 zero rate loan will change for first-time buyers

What the 2016 zero rate loan will change for first-time buyers

Significant help to buy your first main residence

The measure of widening the PTZ + to the former throughout France is welcomed by real estate professionals. But it is above all the increase in the participation to 40% of the cost of the project which arouses the general applause of the whole chain of the profession.

Head of bank relations at Astro Finance explains it: “ the share of first-time buyers has dropped by 20 points since 2011, going from 58% of borrowers to only 38% in 2015. The zero-rate loan as ” it exists today in the old did not allow to bring back this type of borrowers: we had almost no demand for credit with a loan at zero rate in rural areas this year, because the current device is both too geographically limited, too complicated and with limited amounts in zone C ”.

State aid twice as large

Currently the amount of a PTZ + for residents of zone C cannot exceed 18% of the cost of the operation. Which cost is capped at $ 230,000 for a couple with 3 children, which allows them a maximum of $ 41,400 in interest-free financing. In zone A, participation amounts to 26%, while the ceiling is raised to $ 345,000. This leaves a couple with 3 children the possibility of borrowing $ 89,700 via a PTZ +.

But from January 1, 2016 they will be able to get more. In zone C with a 40% stake, their PTZ will reach $ 92,000, more than double. In zone A they can withdraw $ 138,000 to be reimbursed without interest. Note, however, that this calculation is based on the fact that the maximum cost ceiling will be maintained for next year.

Almost 2 times less monthly payments

Take the example of a family of 3 children, whose household income does not exceed $ 35,000 per year. In practice, they are therefore considered as a household with modest incomes. Today, however, they have the possibility of carrying out a building project in the old one for a value of $ 200,000. The State grants them a PTZ + of 18%, or $ 36,000.

Based on $ 16,000 in purchase costs, which includes the fees for the notarial study, transfer rights as well as file guarantee costs, there will therefore remain $ 180,000 to borrow. Given their financial situation, they can now obtain a 3% mortgage over 25 years.

However, their situation does not allow them to obtain a deferred reimbursement from the PTZ. Their monthly payments will therefore be 1041.6 $.

From January 1, 2016, if the basis for calculating the PTZ + is 40%, their interest-free loan will be $ 80,000. The purchase costs do not change, but they only have $ 136,000 left to borrow. The bank grants them a line of credit at 3% over 25 years, which with a postponement of the PTZ maturities of at least 5 years, gives them monthly payments of at least $ 645 for the first 5 years.

A real estate project achievable thanks to the deferral of monthly payments

A real estate project achievable thanks to the deferral of monthly payments

One of the strengths of the zero-rate loan version 2015, is the postponement of monthly payments to 5.10 or 15 years, or even 20 years depending on the case. In the example above during the first 5 years the couple’s debt ratio drops to 22%. Without the postponement of the PTZ + deadlines, it showed at 35% which would tend to cool most banks.

President and founder of Astro Finance, is delighted with this measure: “This new version of the PTZ should allow a return of first-time buyers in 2016, both in the old and in the new, and thus give dynamism to the estate market. In a context of low rates and relative price stability, the widening of the PTZ is the missing element to allow the market to restart in 2016 ”.

Will the zero-rate loan replace personal contribution?

Will the zero-rate loan replace personal contribution?

All banks consider the PTZ + as a personal contribution, which does not prevent them from asking their borrowers to pay the purchase costs from their own pocket. The latter must therefore have a capital of 8 to 10% of the price of the coveted property, in order to pay the notary’s fees, transfer tax, warranty fees and others.

In practice, banks prefer not to have to finance the entire value of the property. This is where the zero rate loan comes in, as it is considered to contribute to the value of the property. Thus it already allows households with capital only the cost value, to obtain a loan to buy their main residence.

But the longer deferral of monthly payments will help them more. Those of them who will be eligible for a 15-year deferral will further reassure the banks. Households with modest incomes will therefore particularly benefit from this measure.

In addition, a real estate project in the old at 200,000 $, implies the purchase of real estate at 175,000 $. The PTZ + is eligible under the old condition of carrying out work amount to 25% of the total cost of the operation. Thus, the necessary contribution will only concern the value of the property, i.e. a maximum of $ 17,500 in this case. The bank notes thanks to quotes signed by professionals, that it will therefore have to lend $ 157,500 for real estate which will be worth $ 200,000 at the end of the work.

Credit for driving license without Credit bureau.

A driver’s license is often more than just a license to drive. It also means holding an additional qualification in your hands. A qualification that opens up new career paths and can mean higher career opportunities. Obtaining a driver’s license is therefore a good reason even if you do not have your own financial resources to finance it. Even with a negative entry in the Credit bureau, there are opportunities for a loan.

A loan without Credit bureau is not unconditional

A loan without Credit bureau is not unconditional

The credit for the driver’s license without Credit bureau is not available from every provider and just as little without other framework conditions that provide security for the financier. For all banks in Germany, negative Credit bureau information is enough to keep the loan from being denied. However, providers from the surrounding countries, such as Switzerland, provide loan offers in which the Credit bureau entry is irrelevant. Nevertheless, these providers also want certain collateral so that it can be assumed that monthly installments will be paid on time. For this purpose, borrowers should above all have a regular and unlimited income.

If these conditions are met, the credit for a driver’s license without a Credit bureau is often no longer a problem. Alternatively, many financing providers also offer to pay the necessary money directly to the respective driving school. In this way, the funds always end up in the designated place. On the one hand, this brings advantages, but the disadvantages should also be examined. This is because the borrower takes the risk of not receiving a driver’s license or money back if the driving school suddenly reports bankruptcy, for example. The latter variant as a loan for a driver’s license without a Credit bureau therefore represents a very high risk in comparison.

Serious foreign loans without Credit bureau

Serious foreign loans without Credit bureau

There are good reasons for a loan for a driver’s license even without a Credit bureau. Because investing in a driving license can also mean more income in the future. In spite of everything, every borrower should be sure of the risks of a loan and therefore carefully consider how securely the loan can be covered and what the burden is.