What are the differences between account credits and sms loans? The boundaries between the two loan forms are not always so obvious. Especially not now when the fast loan has been branched into different similar loans. Since we ourselves can often be confused about what is what, we have put together what you need to know about account credit and sms loans.
What are Account Credits?
An account credit is a small loan but where instead of getting the full amount paid out directly you can use the loan until you reach the credit limit. Many of our lenders offer account loans of between USD 500 and 25,000 – some may grant an even higher credit limit than USD 25,000. Even though you borrow from the allowable amount, you can still keep the loan indefinitely.
Account credits are usually described as credit cards without the cards. Smart digital solutions such as mobile apps and personal pages with lenders allow you to easily keep track of the amount you borrowed from the credit line.
When you are looking for a flexible loan, an account credit can be the most flexible choice. You can borrow money whenever you want, for whatever you want and without having to reapply for a loan. As long as you take care of the repayments, the unused credit limit will be at your disposal. Both for fun spontaneous purchases and unforeseen expenses.
The cost of an account credit is measured at the effective interest rate. With many lenders, your individual financial circumstances usually determine how much you should pay at effective interest rates. But one thing holds true for all account credits: you only have to pay for the amount you spent.
Here’s how an account credit works in 6 easy steps
- Apply for and receive a credit limit of up to USD 25,000. You do this via a digital form.
- Get answers same or next day.
- Borrow up to the credit line – either part of the credit or the whole credit.
- Pay only for the amount you borrowed.
- Repay the loan amount – either all or part of the amount.
- Borrow even the credit line again.
What are sms loans?
Unlike bank loans, sms loans are one-time loans. You borrow the money when you need it and pay back the loan within the contracted term. The loans are also called short-term loans. This latter name describes the sms very well; this is not a loan to pay back. Quick loan, quick payment!
Also some sms loans can give up to USD 25,000. However, this is not so common considering that the short loans usually have expensive effective interest rates and therefore perform best as small loans. Amounts of USD 1,000 to 5,000 are all the most reasonable and far from impossible to repay within the standard maturities of 30 to 90 days.
Borrowing sms over and over can give you an unsustainable financial situation in the long run. Then it is much better to have a standing account credit. But when you need quick money and already have to avert a temporary crisis today or tomorrow, the form of borrowing can be the ultimate choice. From a credit worthiness perspective, it can be good to borrow and repay the money quickly, ie not having long credits.
Here’s how a sms loan works in 3 easy steps
- Apply for an sms loan via a digital form.
- Get answers and money paid within hours.
- Pay back the loan within the agreed time – usually within 30 to 90 days – and become completely debt free.
What are the differences between account credits and sms loans?
The concept of fast loans has been expanded and now includes various forms of fast loans. What they have in common is that they let you borrow money quickly. Account credits and sms loans have different arrangements, and the differences are mainly based on the time perspective.
The loan is intended to be a short-term loan. You borrow money, get them almost immediately and pay them back as soon as possible. When the loan is redeemed, you have no loan.
The account credit is a type of outstanding loan and gives you a credit limit you keep. Once you have redeemed the credit, you can borrow money again, and this without having to make a new application.
With a sms loan, you pay effective interest for the entire amount, with an account credit you only pay effective interest for the amount actually used. In the long-term perspective, it may be better to have an account credit than to have a sms loan – but of course everything is about what to do with the loan.