A recent CIS study has revealed that more than half of Spaniards arrive just or with difficulties at the end of the month
The payroll advance is a short-term loan that allows us to enjoy a maximum value equivalent to three of our salaries before we get paid and that can be useful when we are surprised by an unexpected expense
The requirements to apply for this help depend on each bank, although the vast majority usually apply small commissions for this service
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Saving is essential to have stable finances that allow us to face any type of unforeseen event, but it is increasingly difficult to reserve a part of our money for the future. According to the Consumer Confidence Indicator for April published by the Sociological Research Center (CIS), more than half of Spaniards arrive just or with difficulties at the end of the month.
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Specifically, the study, in which almost 2,800 people have been interviewed, indicates that 36.6% of those surveyed arrive at the end of the month, while 11.1% have to use their savings and 5.3% have incurred debt for the same reason. On the other hand, 37.8% of those surveyed affirm that they can save “a little”, and only 7.9% can assure that they save a lot.
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This inability to have savings can get us in more than a hurry if we are surprised by an unexpected expense, such as a car repair, a problem in the house or a much higher electricity bill than we expected. In these situations, many find themselves in need of get quick money to be able to cover the costs, and they can’t afford to wait until the end of the month (or the beginning of the next) to get paid. To get us out of trouble, requesting a payroll advance is presented as the best option, since it has much lower interest rates than other banking products such as loans. But is it really beneficial?
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What is a payroll advance?
The payroll advance is a short-term loan granted to us by the bank in which we have our payroll or pension domiciled and that, as a general rule, allows us to enjoy a maximum value equivalent to three of our salaries before we charge them.
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This type of loan must be amortized over a period of three to six months, although there are extraordinary cases that can last up to twelve. Its advantages are several. On the one hand, it allows us to obtain liquidity in times of need quickly, usually in a few days or hours. On the other, it offers us very low interest rates that can even be zero, as long as we are not late with the payment.
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