Need a loan of 1,500 dollars to set up your auto repair, appliance renewal or another project? For the bank, a loan of this amount is generally part of small credits, also called mini-credits.
As such, it will often offer the future borrower revolving credit, which is a form of consumer credit without proof of use. The answer is often given within 24 hours. But is this an advantageous solution? Are there alternatives? Let’s study the question!
Small loans of 1,500 dollars: why does the bank favor revolving credit?
For a loan of 1,500 dollars, the bank receives less money than for a loan of 10,000 dollars, for example. However, it invests the same money in advertising and in a case study.
It is to compensate for this loss that a financial organization will tend to offer an offer of revolving credit. Because you should know that the latter displays particularly high rates. At the start, they hover around 4% (which is already a lot), but quickly, they can climb up to 15 or 20%, and therefore come close to the wear rate.
If the borrower has an offer whose rate is advantageous on the first use of his revolving credit, and that he really only makes one use, this may be worth it. Otherwise, his project v vacation, auto repair or purchase of multimedia equipment will ultimately cost him dearly.
Case of credits amounting to 1,500 dollars in-store or via bank overdraft
The bank can give a positive response to an authorized overdraft request, for a defined amount. For this, it will attach an addendum to the account agreement, which is to say the contract binding the bank to the borrower. Only, the total amount of a bank overdraft is very high and can even be assimilated to that of revolving credit, especially when it is equivalent to a credit of 1,500 dollars or more.
Without counting the possible management fees. In addition, the duration of an overdraft cannot exceed 3 consecutive months. Beyond that, the bank is required to submit to the borrower a prior offer of credit.
Another solution: make a revolving credit in the amount of 1,500 dollars directly in the store. This can be interesting if a promotion is offered on credit. But there is one condition to take advantage of it: make all your purchases in the store. If the borrower needs money for another project, it will not be attractive to him.
Is there another loan solution for a small amount of money?
Faced with an offer of revolving credit online as in-store, we have just seen that it is necessary to be very attentive and read all the terms of the contract before signature. The bank overdraft is hardly more reassuring. To avoid the pitfalls, it is better to turn to the depreciable personal loan (preferably at a fixed rate), whose conditions are clearer. The borrower knows precisely:
- the amount borrowed;
- the total cost of the loan;
- the monthly reimbursement amount;
- the total duration of the credit.
Everything is stipulated in the contract.
The personal loan depreciable at an advantageous rate does not exist for the small credits
False! By searching carefully, it is possible to find a competitive offer of depreciable personal loans online, including for an amount of 1,500 dollars. Sometimes even much more attractive than a promotional revolving credit offer.
And as long as it comes with a fixed rate, the borrower has everything! As a reminder, personal loan is also part of consumer loans. As with revolving credit, no proof of use is required by the financial institution. It is thus possible to finance any type of project.