I need money, do I ask for a loan or a payday loan?

Both credits and loans are products that allow you to get financing at the time you need it. But both have differences that you should keep in mind when you are at the time of choosing one or the other.

Here we tell you the characteristics of each one, to help you choose the best option according to your needs.

What are the credits?

What are the credits?

A credit is the Good Finance amount, with a fixed limit, which an entity makes available to a customer. The customer is not given that amount of stroke at the beginning of the operation, but may use it according to the needs of each moment, using an account or a credit card.

Interest is only paid for the money you have actually made available, although a minimum commission is usually charged on the undisclosed balance. Loans are also granted for a term, but unlike loans, when it is terminated it can be renewed or extended.

The interest on loans is usually higher than on a loan, but as already stated, it is only paid for the amount used.

And what are the loans?

And what are the loans?

A loan is the financial operation in which an entity or person (the lender) gives another (the borrower) a fixed amount Good Finance at the beginning of the operation. The condition is that the borrower will return that amount along with the agreed interests within a certain period of time.

This return is usually made by means of regular installments scheduled in advance, on the total amount of money borrowed, whether or not everything is used. In the case of loans, you have to wait until you pay in full to apply for a new one.

In general, this type of product is usually used to pay for an emergency, a specific good or service.

Other important differences between a loan and a payday loan

Other important differences between a loan and a loan

Credit interest can be paid from a minimum amount, as can the case with the credit card balance. Although this system can relieve you the amount to be disbursed, you have to be very careful, since it is only a deceptive way to pay off the debt, because you could spend many months paying only interest, without reducing the balance you really owe.

The loans can be for more or less high amounts and their main advantage is that you receive the money at one time, which is otherwise valuable when cash is required immediately. In both cases, loans and credits, are considered a financial aid to have liquidity more quickly and to be able to buy what is really needed, or to get out of trouble in a more comfortable way.

However, both are commitments that commit us to pay “expensive” money, so you have to take them with discipline and responsibility. It must be especially clear that both the loan and the credit are not “extra” money, since whatever the term is, it will have to be repaid in addition to interest.

Therefore, it is important to analyze the money that is really needed and for how long; and available loan and credit options depending on that specific need. In short, the choice between one product or another will always depend on the volume and ease of payment of the debt you assume.

Good Finance, is positioned as the best option for your loans, for the facilities granted, and for the immediacy with which the advance is obtained.

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