There is a week left to salary, but you urgently need extra resources? Have you received a heating bill, but it is significantly higher than you had planned? Most people are aware of these situations when they need to look for a solution to the huge money problems. There are several alternatives to deal with such situations, and one of them is the “fast credit” service offered by the non-banking sector, which is a short-term financial loan that can help you cope with unexpected expenses.
What are Quick Credits?
Quick loans are loans ranging from 100 to 1500 USD, which are offered by non-bank lenders for up to 30 days and are granted without pledge or guarantee. There are many types of criticism of the fast credit industry, so it is very important to understand all the issues related to this loan before deciding on a loan.
What is the total cost of the credit, or a bit about the annual interest rate
In order to protect consumers, the fast credit industry has been carefully analyzed and regulated in recent years. One such form of regulation is the introduction of an annual percentage rate of charge (APR). Regulations of the Cabinet of Ministers Nr. 1219. Defines the annual percentage rate of charge as the total cost of the credit expressed as an annual percentage of the total amount of credit granted to the consumer. The Consumer Protection Center points out that the annual percentage rate includes not only the amount borrowed and interest payments, but also:
- Costs associated with maintaining an account used to make payments and
- loan disbursement;
- Costs of the means of payment used to effect payments and the disbursement of credit;
- Other costs associated with making payments.
Calculate annual percentage rate
The annual percentage rate is calculated using a specially formulated formula and all lenders are required to provide it so that potential consumers can understand the relative cost of the service they want to use. However, it has to be acknowledged that this system is rather confusing, as GPL indicates the annual cost of the credit, but it should be borne in mind that quick credits are cash loans for a month or two but not a year. The annual interest rates on quick loans will depend on the size of the loan you want, and in most cases, you will only be able to see it when you apply for a loan again, as most non-bank lenders offer their first loan free of charge.
As you can see, the APRC does not actually give the consumer clear information about, for example, monthly payments, so if you have made a decision about the need for a fast credit, make sure you fully understand the cost of the loan and remember that fast credit is not long term financial solution and if you are not convinced that you will be able to repay the loan, do not apply for it!