Do you need money for a small purchase, an urgent car repair or a longer vacation? Exhausting my overdraft or overdrawing the available credit line is often the first thought. Or take out one of these new short-term loans from the Internet. These are possible solutions, but not optimal ones. The interest on overdrafts is high. The costs for short-term loans from special providers are similarly high.
But you don’t get a quick mini loan with overdraft-like interest rates. To do this, you have to put additional money on the table once more, and plenty of it. There is a clever alternative to short-term credit and mini-credit, short-term credit from direct banks.
Short-term credit: comparison and definition
Short-term credit does not mean that you have the money in your account quickly. The term also has nothing to do with the loan amount. “Short-term” refers to the duration of the term. A short-term loan is a loan with a term of less than one year. In common usage, terms of one year or twelve months are also considered short-term loans.
With the credit calculator recommended by us, you can compare loans with terms of twelve months or more free of charge and without obligation. The offer is large and the conditions are particularly favorable.
Advantages and disadvantages of short-term loans
Short terms mean low total costs because there are high repayments in the monthly installments.In addition, the loan is quickly paid off and then no longer affects your creditworthiness with regard to future borrowing. However, there is a disadvantage. Short-term loans mean high monthly installments. Therefore, loans with short terms are usually small loans over a few thousand dollars.
A sample calculation for clarification. For the calculation, we effectively assume an interest rate of 4.6%.
Such interest rates are realistic at the current time (as of January 2019). Term is one year.
|Loan amount||rate||total cost|
|1,000 dollars||85 dollars||25 dollars|
|2,000 dollars||171 dollars||49 dollars|
|3,000 dollars||256 dollars||74 dollars|
|4,000 dollars||342 dollars||98 dollars|
|5,000 dollars||427 dollars||123 dollars|
|10,000 dollars||854 dollars||246 dollars|
From an amount of just 3,000 dollars, the monthly installments are so high that they can significantly affect the economic scope of a family of four with an average income. As a first-time customer you can take up a maximum of 500 dollars. Loan terms of up to 90 days are offered. The interest rate is 13.90% effective. That is more than most overdraft facilities. If you choose a term of 30 days, you pay 5.79 dollars in interest costs.
The credit decision is quick. It should only take 60 minutes. We have not found any information on the duration of the payment on the PointCash website. However, it will probably take at least 2 to 3 days. If you choose loans with terms of 30 days to 90 days, you will be particularly interested in a quick payment. The immediate payment is possible if an express function is purchased.
The price for this is 39 dollars. The total cost of a 500 euro loan with a term of 30 days at PointCash is 44.70 dollars.These are higher costs than effectively with a loan of over 1000 dollars with a term of twelve months and an interest rate of 4.6%. PointCash may be a solution if, as a borrower, you want to borrow very small amounts for extremely short periods of time and do without the express function.
However, they must be able to repay the entire amount with one payment at the end of the loan term.
Short-term loan without credit record
There is no short-term loan without credit record. Credit record-free small loans are repaid in 40 equal monthly installments. Since the repayment does not start immediately with the payment, the loan term can be up to 42 months. We have described the exact conditions on a separate page.
Why do you want to find out about short-term loans without credit record? Perhaps you are not dependent on such credit products at all. If the negative features in your credit record file have been dealt with and have not related to credit defaults, you can apply for a normal loan including credit record information from some special providers.
Another prerequisite, however, is that there are no hard negative features such as an affidavit, warrant, other ongoing enforcement measures or bankruptcy. We recommend in the case of weak credit record score or completed negative features
Tips on Short Term Loans
Short-term loans will mostly be small loans. Despite the low loan amounts, you should prepare for the loan application in exactly the same way as for a loan with five-figure amounts.
- First, determine how much free income you have available to pay the monthly installment. This requires a budget estimate that is at least rough.
- In a household bill, all expenses are compared to all income. The amount in excess of the expenditure is the freely disposable income and can be used to pay the monthly installment of the loan to be taken out.
- Do not limit your financial scope for action by taking out a short-term loan.
Our sample calculations show that the monthly charge can be high even with smaller loan amounts. Small amounts of credit entice you to accept the very first loan offer. Of course, the savings that can be achieved through a loan comparison are not very large for small amounts over short periods.
But who likes to give money to banks? Our recommendation is therefore to always consult a loan comparison, regardless of how high the loan amount is.