Cash credit – advantages and risks of cash credits
In general, cash credit is a small financial leeway, which is granted in different ways. In the category cash credit, the overdraft facility from the bank, the mini-credit and the installment loan in smaller sum are classified. You can apply for a cash loan relatively easily, opt for small installments and a short term.
If you need money without waiting period, are in the Schufa and still need a loan, cash loans are a good and practical opportunity. As with any loan, a cash advance involves risks, but you can avoid them if you choose according to your criteria and apply for a sum that you can easily repay within the agreed period of time. The cash credit offers you further the advantage that you have cash immediately and can profit from a fast disbursement.
What is a cash loan?
Cash credit is a loan that is paid out without a waiting period and made available for cash without a purpose. The bank can grant cash credit as an overdraft facility or in the form of a mini loan. When you apply for a cash loan, you usually want to get a short processing time and a quick payment.
Therefore, the Dispo and the mini loan with instant payout with or without Schufa check to the top of the list of most popular cash loans. You can borrow a cash loan in the form of a mini loan in a very small amount. Even from 100 euros you become a borrower, which of course means that you must comply with the contractual agreements and pay the money back to the bank on time. Cash loans are an ideal solution for temporary financial bottlenecks or as a permanent loan, which you can secure, for example, with a cash loan as an overdraft facility.
The overdraft facility as the most frequently requested cash loan
You want to apply for a cash loan? Then your first way may well lead you to the bank of your confidence. An overdraft facility on your current account is the most expensive, but nevertheless the most frequently requested cash credit. How much overdraft you get depends on your income and your bank credit rating. If you are a reliable customer and saver for many years with your house bank, this loyalty can show itself even in the interest for the Dispo.
To apply for a cash loan, you must provide your bank with proof of creditworthiness and a regular income. In return, this cash credit is available to you permanently, without you having to provide renewed proof of creditworthiness or inform about the use of the money in the event of overdrafts. Since the interest rates for overdraft facilities are well over 10%, you should consider this loan as a bridge for short periods of time and not as a permanent increase in your financial flexibility. The interest only accrues for the amount you draw on the overdraft facility.
Online credit with immediate payment as cash credit
The most favorable variant, if you want to apply for a cash loan, is the online loan with immediate disbursement. If you have a good credit rating, you can even get it at a very favorable rate, but you can also apply for a credit-free loan. If you need money in a hurry and want to refer to an offer with small installments and favorable interest rates, the online loan with instant payment is a good decision. You can choose between classic mini loans and installment loans, which in both cases with the option of an immediate or in 24 hours available payment and without a purpose belong to the cash loans and bring their special features.
Credit free loan with cash payment
If you have a limited credit rating, an approach to banks will usually lead to rejection. A credit without credit history with cash disbursement can be applied for at favorable conditions on the Internet. Here borrowers can find offer without Schufa information and loans that are not rejected with fair credit check despite Schufa entry. If you apply for a cash loan and choose offers without a credit check, the interest rate is a little higher than the offer with a credit check. Depending on the contract you will receive the money immediately or at the latest in a period of 24 hours.
How and where to apply for a cash loan?
It all depends on which form of cash credit you prefer. You can apply for an overdraft facility at your local bank. You can get a small loan or installment loan at more favorable conditions on the open financial market. Banks generally do not grant mini-loans, because you as a borrower pay a very low interest rate and this form of credit is not worthwhile for traditional banks.
A cash loan is a fast method of lending for the borrower, but an uncertain one for the lender. This is primarily reflected in the interest rate, which makes a cash loan but not uninteresting.
If you want to compensate for a short financial bottleneck, pay for an urgent repair or make a purchase, you have a chance through the cash loan, which would not have without this possibility of fast disbursement and immediate availability of the sum. A comparison of online offers is always worthwhile and ultimately excludes the fact that you spend more money than necessary for the interest rate.
Comparisons protect against high interest rates on cash loans
After you have decided that you will apply for a cash loan, you should answer the question of where based on comparisons. The conditions of the cash loan are so different that a comparison of the different loans is worthwhile and gives you transparency in a market of variety. Check not only the interest rate, but also include the term in your comparison.
If you apply for a small sum and pay off the cash credit in full from your next salary, the costs are particularly favorable. If you want to repay the loan over a longer period of time, you should check how much term is possible with the mini loan. As a rule, the term of a mini loan ends after 90 days, so that the installments for a larger sum seem high compared to your income and could cause problems.
The cash loan to bridge financial bottlenecks
You should never consider a cash loan as a classic loan. Rather, it serves to help you with small difficulties in liquidity. Only the Dispo is an exception here, as it is provided as a permanent drawing limit for your current account. The bank pays a high interest rate on this service, which means that an overdraft facility will result in new financial bottlenecks if it is permanently exhausted.
The situation is different with a small cash loan, which you receive with immediate payment to your account and repay in full within a few weeks. For a repair, an urgent purchase or the payment of a bill, a cash credit is a good solution and saves you from falling into arrears and risking a record in the Schufa.