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Differences between personal loans and credit cards

by Sharon Garcia
At present, many of the people seeking financing do not know exactly what features should be fixed in the process, as which option will cost them less for their pockets or which one offers greater comfort. This is where loans and credits come into play. However, not everyone knows where the difference lies between a loan and a credit. That is why, from Good Finance, we show you the characteristics and differences between both options.

How do credit cards work?

How do credit cards work? Credit cards provide smaller amounts of money, that is, a certain amount of cash is available, up to a maximum limit. This is not necessary to spend, but it can be available, if so decided. For a set time - which usually lasts about a month - that money can be available partially or in its entirety. The use of credit cards is usually associated with the accumulation of operations. Once this one month cycle ends, the fee that represents the transactions to date will be charged. If these amounts are not paid at the moment, the bank may charge a series of interest as the equivalent annual rate, popularly known as APR.

How do personal loans work?

How do personal loans work? Personal loans cover a specific need in the plaintiff, for example, they are usually requested to make certain purchases (consumption), home renovations or, to reunify debts. Once the amount has been established, a maximum term for its return is agreed, this quota being totally flexible to the plaintiff, which gives it great comfort when paying the borrowed money. Loans are usually larger amounts of money that are provided in full at the time of contracting the service. For example, Good Finance gets loans to our users of up to € 30,000, currently. Unlike credit cards that are smaller amounts than those available during the month, or time established with the entity.

In loans the term is always the same

In loans the term is always the same While in credit cards this amount will vary depending on the transactions made during the estimated time. As an example, the loans you can get through your Good Finance app have a term of up to 72 months. In addition, in the loans the total interests are pre-established and therefore are invariable from the contractual act. Once you know all this information, if after this you are still looking for financing, do not worry, because from Good Finance you can get advice and your personal loan through the app or directly through our new website. Do you have any advice, curiosity or question that we have not commented on? What are you waiting for! You can help many users who read your comment on our blog?