Depreciable credit or reserve of money?
If you are looking for a small credit on the Internet, it’s a safe bet that the proposals are limited to a reserve of money renewable, most often associated with a credit card .
Even if the calculation of interest only concerns the sum actually used, the final cost will be very important because the rates of these loans are particularly high.
But the greatest danger lies in the fact that the reserve is renewed as each repayment of maturity , which encourages the most fragile households to draw systematically.
Our advice: if you have a one-time need that is limited to a small amount prefer a depreciable loan, preferably over a reasonable period of 12 to 24 months.
To verify the impact of the rate on the cost of credit, we will compare a depreciable personal loan with that of a revolving cash reserve.
Our example is a small loan of one thousand euros. We consider in our case that the monthly payment chosen for the revolving reserve is identical to that of the amortisable loan. The loan is repayable over 24 months.
Notes : The difference in terms of monthly payments is not very significant but the cost of credit is much heavier. It will be even more so if the borrower does not repay regularly.
What alternatives to bank loans?
In reality, the choice does not always go towards a classic banking solution . We suggest some alternatives that in some cases are more economical.
People in precarious situation can obtain a personal microcredit for a small sum (generally between 300 and 3000 €). Only condition: do not borrow to fill a bank overdraft or restructure debts .
In the case of a professional project, contact the microfinance institutions. The latter offer people who do not have access to banking services a small loan.
The family loan
Everyone does not have a family circle that has available capital and who agrees to use it to help a loved one. Nevertheless, financial assistance from the family or a loved one remains a flexible and economical solution because it will allow you in many cases to repay the borrowed capital without interest and at your own pace.
Payday loan advance
In many cases, getting a down payment from your employer is a temporary problem. In case of agreement, you will probably be able to spread the refund over several months. Another advantage is that you have no interest to pay.
Note that there is a difference between the payday advance and the down payment. In the first case, the employer may refuse your request. The down payment is an absolute right for all employees. It represents the share of pay on work already done in the month.
The authorized bank overdraft
Provided you negotiate the rate of agios with your banker, the overdraft can be a better formula than a revolving credit, provided you stay within the limits of the authorization and organize its budget to repay regularly.
Social welfare schemes
The financial aid distributed by the family allowance funds is not limited only to housing or family benefits and even if few recipients know that, the CAF can help the most disadvantaged when the situation required.
A 2009 survey of beneficiaries showed that 70% of respondents did not know that the Family Allowance Funds could help them if they needed small amounts.
In the same vein, the communal or intercommunal centers of social action (CCAS-CIAS) can also help you. For any information, please contact the welfare service of your town hall.