Incidental expenses? Face them with a line of credit!

One of the fastest credit products and specially designed to solve these situations in a timely manner, when you need money instantly and you are able to repay it in a too short period of time, usually a maximum month, are the well known mini online loans. But what to do if you need more time to be able to return the money or other unexpected expenses arise before the expiration date of your mini loan?

 

Credit lines

Credit lines

Flexibility in return

An alternative that best suits your needs and allows you to achieve more flexibility is to opt for a line of credit. The main feature that differentiates mini loans from credit lines is the term. Credit lines have a much longer repayment period, allowing reimbursement in comfortable monthly installments.

Capital Availability

In contrast to the mini loans that, once repaid, are not available, the credit lines offer you an amount of money that you can use anywhere at any time and all the repaid money is again available for your use. That is what makes them ideal as a source of financing at certain times of lack of liquidity. If the maximum limit of your credit line is not reached, you will only pay interest for the part you have used, reducing the cost of financing.

Financing cost

As a general rule, although interest is charged only for the amount used, not for the total amount of money available for credit, the cost of a line of credit is usually greater than that of fast mini loans. In some cases, online mini loans represent a cheaper product. However, the total cost depends on each offer and its conditions. When comparing several offers, you can find some lines of credit at a great price.

 

I need 500 dollars, a mini loan or a line of credit?

I need 500 dollars, a mini loan or a line of credit?

Imagine you are in one of those financial emergencies and you need 500 dollars to face an unforeseen expense. Ask for a mini loan or hire a line of credit? The key is to understand the cost that each of the options entails and to check which one will best fit your needs and repayment capacity.

$ 500 for 5 months for $ 199.65

A representative example of credit lines can be the Ferratum Flexible Credit, a line of credit that can be used and returned at any time. The minimum repayment term is 4 months and the maximum period of 26 months, with the option of early repayment to reduce interest. As an example, a credit of $ 500 to be returned in 5 months (APR 334.47%) entails 4 monthly installments of $ 150 and a final installment of $ 99.65. In sum, the total amount to be returned will be $ 699.65, which represents a total cost of $ 199.65.

 

$ 500 for 30 days for $ 155.00

We compare the mentioned credit line with a mini online loan from Caspher. This credit product offers up to 500 dollars to be returned within a maximum period of 30 days (APR 2,571.8%), making the return in a single total payment of $ 655 (borrowed capital plus all interest and fees), which represents a Total cost of $ 155.

As we have mentioned and as the examples show, financing with the mini loan is cheaper compared to the cost of the credit line. However, taking into account the 30-day period, if you have a sudden unforeseen event and your economic situation does not allow you to meet such a quick repayment, hiring a credit line instead of a mini loan can be a good solution that It gives more flexibility. Value your needs well and choose the option that best suits your ability to meet the payment. Before applying for a loan or credit, do not forget to make a comparison between different offers to find the most convenient financing.