The world of finance and banking is often a headache for the average citizen looking for a way to finance. However, whether for a business project, a personal project or to acquire a good, the consumer can always find credit adapted to his needs. In case of difficulty, it can appeal to a broker, but the best would be to learn through the following information.
Credit offers have been around for years. They have proven themselves to borrowers. Consumer credit is one of these financing solutions. Among the most common are payday loans and revolving credit. They have similarities and differences. The choice between these two banking products depends on the nature of the client’s needs.
Principle of the payday loan
A credit comparator normally suggests a payday loan to a person who wishes to carry out a specific project and who, however, has a fairly large budget. This type of consumer credit does not usually require the accuracy of its destination. This is called a credit without proof. However, the payday loan is well suited for project financing. It is ideal to afford a car, organize a trip or fund an event such as a wedding. The repayment terms do not change over time. A table of monthly payments allows you to set the total sum to be paid. For personal credit, the repayment period is proportional to the amount of credit granted to the client. The interest rate is usually set between 3 and 10%.
What is revolving credit?
The two credits share the fact that they are intended to finance a personal project. But in general, revolving credit is not suitable for long-term projects. For banks, this loan of money is to make available to the customer a reserve to deal with a shortage of cash. Unlike the payday loan that ends with the payment of the last monthly payment, this credit can be opened indefinitely. It is available for the client’s money needs. If the customer does not touch the amount after subscription, it will not cost him anything, but if necessary, he can activate the credit. This type of loan is variable rate. The price to pay is that at the time of repayment, interest rates can reach 20%. Unlike the payday loan that has a fixed interest rate that is determined in advance by the banker.
For both funding solutions, it will be necessary to monitor expenditure management so as not to fall into over-indebtedness.