The market for lenders operating on the Internet has grown in an impressive way. However, when we talk about loans and loans we do it as if we were talking about synonyms, but they are not two equal financing products. Each one has its characteristics that differentiate them. They also have many similarities, hence we talk about them as if they were the same. So at the time of opting for credits or personal loans online, nothing better than knowing what each one is. And even if we do not look for financing, financial education never hurts.
A loan is not a loan and vice versa
When we ask for financing from a bank or a lender, we understand that they give us money that is not ours and we have to return it in a few installments. It is a commitment that we acquire with these entities. In this aspect, credits and loans are the same. In both, they offer us a capital and we return it with some interests. The difference lies in other aspects:
|When we ask for a loan, the entity grants us a maximum amount and we can withdraw whatever we want. It can be all the credit or only one part.||When we ask for a loan, the entity that grants it gives us the amount requested in its entirety. All the money is entered into our account at one time.|
|In credits, as we return the money used, we have it available again.||When repaying a loan, when we return the money according to the agreement, the contract ends with the lender.|
|In a credit, the interests affect only the part that we use.||In a loan, interest is applied to the entire amount granted.|
To try to make us clearer, let’s give an example. When we ask for an online loan of 1,000 euros and the entity grants it, they deposit all the money in our account. The interest is applied to 1,000 euros. Pay all the installments in the time established with the lender and fully balance the loan.
In an online credit, the entity also grants us 1,000 euros but does not enter them in our account. The 1,000 euros are in a “virtual wallet”. I can withdraw or spend all the money once or only a part, for example, 400 euros to buy something. In this case, interest affects 400 euros only. In addition, I still have 600 euros of credit available. As I go back the 400 euros (once or in installments), I will have them available.
Credit and personal loan face to face
Currently, almost all the financing offered online is, in reality, online loans. Although lenders that offer credit lines are beginning to emerge. The conditions for us to accept both credit and online loans are very similar. Depending on our situation, it will be better to choose a loan or a loan. In One Payday we can find all the loans so that we can choose the one that best suits our needs.