The use of a loan responds to various situations, such as rental investment or the purchase of household appliances. Given specific or urgent needs, consumer credit can be very useful. In these cases, short-term credit, with a repayment term of two years, is a practical and very short-term solution.
The benefits of short-term consumer credit
- A limited repayment period: unlike real estate loans that can be spread over 15 or 20 years, the short-term credit does not exceed two years.
- A credit easier to manage: because of its limited duration, this type of consumer credit is subject to lower interest rates than long-term loans because it represents less risk for the lender.
- A simpler credit to obtain: being less risky for the organizations that grant it, the short-term consumer credit is obtained more easily, because the conditions are less strict. In addition, its limited duration facilitates faster cancellation of indebtedness.
The limits of the short-term consumer loan
- Higher monthly payments: the cost of a short-term loan is quite limited compared to other types of heavier credit, but it should not be forgotten that the amount of monthly payments will be higher by comparison. It is therefore useful to check short-term credit offers according to the credit platforms that offer them, in order to find a fair and competitive rate.
- Beware of the accumulation of short-term credits: because of the ease of subscribing to a short-term credit, it can be tempting to get used to and accumulate a certain number. Even if the weight of a single consumer credit is not too heavy to bear, the repayment of several loans of this type can be risky.
- Give priority to short-term credit for one-off needs: in order to avoid certain pitfalls, it is recommended to limit the use of consumer credit to ad hoc or urgent needs, and not on a regular basis. In the case of larger financing needs such as real estate, the use of a long-term loan is often more relevant.