Quick loans are one of the most popular types of modern loans in Latvia – people borrow them in a variety of emergency and urgent situations when it comes to paying for goods and services, but their personal financial resources are simply not at that moment. Non-bank loans have several advantages – speed, convenience, simplicity, small loan amount with a small repayment term. The same features are inherent in the credit card service provided by banks. It seems that advertising and information are the ones that make people make their choice in the event of unexpected situations, even though it is just as good, if not better, to design and use a credit card. Here are the differences between the two loans.
It is an electronic payment card for cashless payments via POS terminals or ATMs. It is subject to a credit limit under which, in addition to personal funds in a bank account, the borrower can spend credit funds. The credit limit is up to 10000 EUR. The credit limit allows you to spend your funds over your personal funds in a bank account, ie if there are no funds in the person’s account, they are spent out of the credit limit. The credit limit is for unexpected and unscheduled spending just like quick loans. The credit limit used must be repaid with interest or interest, which is stipulated at the time of the conclusion of the contract. The interest does not have to be paid only in the case of an interest-free credit card, where interest payments are not granted for timely repayment of the loan. Its annual interest rate or APR ranges from 20% -40%, but, as already mentioned, the interest rate is not applied in the case of interest-free credit.
It has a flexible repayment schedule appropriate to the debtor’s wishes and possibilities. To make a credit card, go to the bank. Processing may take longer because the customer’s credit history and creditworthiness are assessed. The main reason why people do not choose credit cards and prefer quick loans is a relatively high annual or monthly credit card charge. Namely, if the credit card is issued but the credit limit is not affected during the year, then it is overpaid, so to say, the services that have been paid are not used. Conversely, quick credit is taken when it is needed and overpaid with interest payments. As we have seen, overpayment is in any case – how much overpayment is made depends on the intensity of use of both loans and interest rates.
This is a type of non-bank non-cash short-term non-cash loans that can be obtained via the Internet or text messages up to EUR 1000 per repayment term of up to one month. This loan is available to anyone who meets the specific creditor’s preconditions and has a good credit history and credit standing, which is often not taken into account, so the evaluation is faster and the loan is credited to the person’s account within 10-15 minutes. For this type of loan, APRs tend to be from 100% up to 200%, which makes it the most unfavorable loan. It has a specific repayment term that can be extended by paying a specific amount.
Overall, a credit card has more advantages than a quick credit, but most people choose quick loans. Perhaps their popularity can be explained by the ability to borrow them spontaneously, without the prior presentation of the creditor, the availability on the Internet and the speed of issuance, as well as their lack of credit – the superficial evaluation of credit history and creditworthiness, which is very beneficial for many modern debtors.