In fact, there are only very short loans behind this relatively long term. This particular type of loan is usually only used when there is a short-term issue that can not wait until the next payday loans that do not require direct deposit. The loan is granted for a maximum period of 30 or 31 days, so that the loaned amount must be repaid in time for the next salary payment.
Since these are usually urgent payments, the providers advertise with particularly fast payouts. Of course this also makes sense, because only then can the deadlines be met. Although some banks indicate that after a few minutes and hours the agreed amount is available in the account, the borrower should rather expect a realistic payout time of 24 hours.
The benefits that short-term credit offers until the next payday are basically obvious. Because on the one hand, the money needed is directly available and the pending payment can be made, on the other hand, no long-lasting debt is to be feared. Even with installments that span several months or years, it is not expected that the financial burden will ultimately be significantly lower than is the case for a normal long-term loan. At the same time, of course, the costs are much lower due to the lower total and short term. Of course, the interest on the entire loan will only be charged for a maximum of 30 or 31 days.
Which sums are possible with short-term credit?
The aim of this short term loan is of course the early repayment, which should be made at the latest when paying the next salary. So it is important to choose a correspondingly high sum. Typical of this type of loan are relatively small amounts. Thus, the loan can be applied for from a height of about 50 €, the exact terms of course depend on the bank. The maximum height is basically limited of course, but is usually relatively low, typically heights of about 500 euros maximum, depending on creditworthiness and income, of course, other volumes can be selected and applied.
How long can the short-term loan be granted?
In addition to the usual term of 30 days you can choose from the providers more options to extend the term. Depending on the provider then a short-term credit of 15 – 180 days is possible. For all other maturities you talk then of a normal installment loan. This starts with a term of 12 months.