The payday loan can be taken out by retirees and pensioners, public servants and workers with a formal contract. Provided that the financial institution has an agreement with the contracting company.
In the case of employees of private companies, there is a risk due to the lack of job stability. In the case of dismissal before the payment of the payroll-deductible loan, the debtor must settle the loan in one installment or need to negotiate, converting the amounts at market rates, if there is no clause in the contract that presents another solution.
Thus, the private sector worker needs to take certain precautions when contracting the payday loan, paying close attention to the contract clauses in the event of job loss.
Payroll-deductible employee situations
If the employee resigns, the loan continues to exist. In that case, he must look for a bank to settle or to renegotiate the payment terms. It is common to have an increase in the interest rate, since the bank will not have the guarantee that the loan will be repaid. Thus, the debtor must choose the best form of payment.
In the case of a change of job, the debtor needs to find out if the new company has an agreement with a bank for payday loans. If the partner bank is different, the borrower should check whether a new loan is worthwhile to pay off the old one.
Can companies reduce wages if they give employees an option?
One of the common points in payday loans is the clause that authorizes the company to discount up to 30% of the termination amount to pay off the rest or part of the payday loan. Thus, if the employee has $ 10,000 to receive, the company can deduct up to $ 3,000 to transfer to the bank.
In the event of termination of activities, the employee, even so, remains debtor. If the company makes the termination payment, the 30% discount clause still applies. If there is no immediate payment, due to bankruptcy of the company, the employee must seek the bank to negotiate the debt.
When making the payday loan, in the case of being employed by a private company, the applicant must pay attention to everything related to the contract, trying not to commit more than 30% of the salary and, whenever necessary, seek negotiation, which is the best way to keep the name clean.