I need fast money. Do I request an urgent online credit?
I need quick money, what can we do?
When asking for quick money, it must be borne in mind that the interest rates on consumer loans with terms of between one and five years have not fallen below 9% in 2015, according to the information that credit institutions communicate to the Bank in Spain: the interest rate of the 743 million euros granted to families in September of this year averaged 9.57%.
What is this data for? It allows us to know that, if the APR interest rate of personal loans is below 9.57%, we hire consumer financing cheaper than the average; if it is above, the financing is more expensive when asking for urgent money .
Fast consumer credit
The most active financial institutions in fast consumer credit offer, for certain amounts, terms and purposes, similar rates or even cheaper than the bank where we have the payroll domiciled. If we want to finance the home renovation, for example, we can obtain 15,000 euros by paying 6.86% APR, with real offers at the moment. These financial entities specializing in consumer credit do not open a checking account to the customer, but instead direct the monthly receipts to their current account.
But you have to be careful. When the need for financing is urgent and the basic purpose is to obtain liquidity, things change: for 1,000 euros to be returned in 12 months, the APR rate becomes 24.51%, the same cost of financing a credit card . The difference with the immediate money of the credit available on the card is relevant: with the fast credit, a payment commitment is assumed within a given period, with the card, no.
Suppose that we need 1,000 euros to meet unforeseen expenses, for example to change the boiler that has permanently broken. At this time of year is not the time to waste time and our bank makes us difficult for a personal loan. Thus, we request these 1,000 euros from a "fast" personal credit institution and they grant it to us, to be repaid in 26 months. The monthly installment to pay turns out to be 49.90 euros, which means ending up paying 1,297 euros at the end of the personal loan (an interest rate APR of 24.51%).
If we have a credit card with enough available, we can decide to pay the expenses with it. To make it comfortable for us to return the money, we decided to establish a monthly fee of 20.08 euros - the minimum allowed by the bank. Taking the 24% nominal interest rate of a credit card without changing the current bank, it turns out that these 20 euros mean repaying the debt in 280 months, more than 23 years. You have read the reader correctly, 23 years to repay the 1,000 euro credit card debt. The total amount paid ends up being 5,600 euros of quick money.
The bottom line is that the personal credit card bank has misled us? Not at all, at best we can complain that a nominal 24% is a very high interest, but it is the fast financing alternative that we have selected. The serious problem is not understanding how debt repayment works. If we pay only 20.08 euros per month, it turns out that the first year the initial monthly installments are broken down as follows: 20 euros of interest and 0.08 euros of amortization - the amount of what we amortize per month of the 1,000 euros requested.
Minimum fee that involves repaying the credit debt online in a reasonable time
There is another way of financing to obtain fast money that is much more expensive and whose legality moves in areas with many gaps: mini-credits online on the spot, small amounts that are basically used to make ends meet at a given time, with maximum repayment periods that do not usually exceed 30 days. This money is offered by private financial companies, not supervised by the Bank of Spain, but by the Consumer Authorities of the Autonomous Communities. Its usefulness could have to do with preventing the bank from returning an important receipt and its cost, that of a kind of "overdraft" granted by a private financial company.
Before getting into debt with a quick credit
The best way not to need money in a peremptory way is to have an annual and monthly budget for income and expenses, to accommodate the inflows and outflows of family money. A dynamic budget that you have to try to follow day by day. Unforeseen expenses, such as the boiler, and multimonthly, such as home insurance, must be budgeted for a certain amount and spread over months. This amount is the minimum savings that each month we have to fight to get quick money.
If, despite the budget, we need financing, we should take it into account and plan it in advance, since online personal loans are usually the cheapest financing tools, but they require time to compare the best of the moment and manage their concession.
If an urgent unforeseen expense arises and we have no choice but to assume interest rates above 20%, such as some fast loans and credit cards, we must plan its return in the minimum period of time possible. Understanding how the amortization system works is vital so as not to get into debt in eternal terms. Quick money does not mean money at any price.