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Payroll loan rules

Posted by Stephine Wood

New rules of the Institute of Social Security payroll loan change from 6 loan contracts to 9 loans. Institute of Social Security beneficiary retirees and beneficiaries can now operate up to nine payroll loan contracts active at the same time. Before the maximum that could be consigned were six contracts. The changes were decreed thanks to an ordinance published by the National Institute of Social Security (Institute of Social Security) that has been in effect since 19/10.

For many the change is a total irresponsibility, usually a retiree or pensioner does a will makes a paycheck loan, begins to pay the first installments, and when the situation tightens, the beneficiary does another operation and another another until not able to another. What will happen now? More dividends on the sheet of each retiree who still has margin plus had no line for consignment.

What may seem beneficial at the moment is actually a bomb in the hands of people who need to pay debts or get out of complicated situations, but to get out of the heat, to get more debt is one, if not the only solution.

Margin assignable

Margin assignable

Although the increase in lines for loan approvals was approved, there was no change in the limit of the assignable margin, that is, the beneficiaries could not commit more than the 35% allowed in the payroll with the provision of the monthly installment. Of the 35% commitment, 30% is used for traditional payroll loan and the remaining 5% for use with the Institute of Social Security paycheck credit card.

Interest on the loan

Interest on the loan

The Institute of Social Security reduced the interest rate charged on loan agreements for retirees and pensioners. The previous ceiling of interest was 2.14%, now passed to 2.08% per month. The operations carried out for payroll-deductible credit cards, the rate went from 3.06% to 3% per month. Payroll is one of the modes of credit that offers one of the lowest rates in the market.

What has changed for the beneficiary?

What has changed for the beneficiary?

The maximum term for discharge of the payroll loan is 72 months, ie six years, but the increase in the assignable margin is the same, in general, this happens a few times in the year when increases in benefits payments occur.

Caring for the loans

Caring for the loans

With these changes, only created to give a Up in some economic numbers in relief to retirees and pensioners, it is best not to get carried away. If your option is to use one more or two lines of loans on your sheet, first analyze your financial situation, whether it’s worth just borrowing more debt or not.

Another detail, make sure a consigned loan even taking low interest rates will help you better the financial situation or will further affect your savings. Some experts recommend that the contracting of credit or personal or payroll loan should be hired on emergency occasions or to exchange more expensive debts such as those of credit card and overdraft, as in the case of portability of loans.

What is the best option?

What is the best option?

The new rules of the loan will not help all the beneficiaries, however, remember: as the discount of the loan installments on the sheet, the cash value received every month, will come without a third of what you earn; So be aware that your income will be lower and that this debt may affect your daily life. The ideal is to make cuts in expenses to accommodate your new debt

Do not accrue from other personal loans at other non-payroll institutions, such as in private or financial banks, unless it is to swap debt for higher interest.