Les prêts d’argent : avantages et inconvénientsFebruary 18, 2016

Loans: Pros and Cons

The market offers many loan solutions. These have an upside, certainly, but also drawbacks that it is important to understand before signing a contract. Here is a brief overview of the main types of loans and their pros and cons.

The Bank Loan

Granted by a financial institution, the bank loan is an amount of money advanced, subject to a variable interest rate fixed by agreement or the institution.

It can be granted quickly, either online or in person. The advantage of this type of loan is that it offers you access to financing and flexible repayment methods. Indeed, at all times, you can make a lump-sum payment on the principle and thus minimize the interest payable on the loan.

Credit Cards

This solution allows cardholders to make purchases and defer the balance payable over a period of 30 days. After that period, interest begins to accrue.
The advantage of credit cards is undoubtedly their practicality. Indeed, you can use them anytime and virtually anywhere in the world; they can therefore be practical in case of emergency.

Cash Advances

Also, credit cards offer cash advances, allowing for the possibility of the cardholder to access funding up to the authorized credit limit. On the other hand, interest begins to accrue on a cash advance immediately. It continues to accrue until you fully repay the loan.

Other Advantages

Some credit card companies offer rewards such as bonus-dollars to encourage their customers to use their cards. In addition, credit cards often offer travel insurance packages that can be convenient for people who travel a lot.

The downside is that you must use the credit card for car rentals and other travel expenses covered by this insurance.
Also, don't forget that it is very easy to fall into debt by having a credit card in your possession.

Pawnbrokers

This type of loan provides quick cash in exchange for collateral. It really offers no advantages apart from the fast access to funding, since you have to pay interest on the loan and risk losing your property if you don't repay at least the (very high) interest on the loan.

In addition, the loan is often not even equal to 20% of the value of the object left as collateral.

The Fast Cash Loan

The fast cash loan allows the consumer to access financing quickly without having to undergo a credit check. It is therefore advantageous for people whose credit record has been compromised.

On the other hand, the consumer must pay interest on the loan, the repayment of which must be spread over a minimum period of time, such as three months.

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