Some of the loans and credits we present here at Porthos are of the type of online credit, or credit accounts with a different name. This type of loan is becoming more common and will be even more common in the coming years. Above all, the type of loan is very common among new fast loans.
A common way of describing credit accounts is to present them as “credit cards without cards”. It is a comparison that holds in some parts, but there are also some differences between credit accounts and credit cards. In this article, we present the typical features of credit accounts so that you can see if this type of loan / credit may be suitable for you.
A current credit online
A credit account is a standing credit that you can use on an ongoing basis with withdrawals and deposits. Each withdrawal basically acts as a separate quick loan on which interest is calculated. Withdrawals normally take place via the lender’s website, but there are also lenders who can pay out money upon request in an app or by phone.
Unlike a quick loan, your credit can be dormant. When you are granted a quick loan, the money is paid out directly, but the same does not apply to credit accounts. Of course, however, you can of course request a payment immediately upon granting if you wish. The fact that you are applying for a credit account is probably because you need to take out a loan right now.
Credit accounts do not accrue interest until you make a withdrawal. Therefore, this type of credit is an alternative to having your own buffer. However, a small set-up fee may sometimes apply. The reason is that the lender has credit check costs and more even if you do not make a withdrawal.
Loan amounts of up to $ 50,000
The majority of lenders offering credit accounts offer amounts between $ 5000 – 20,000. However, there are players who have significantly higher ceilings than that, in fact up to $ 50,000. It is, as usual, creditworthiness and ability to pay that determine the individual maximum limit.
Credit account costs
In total, there may be three costs associated with credit accounts. It is about:
- Setup fee
- Redemption fee
The setup fee is the least common. Only a few lenders charge one. Withdrawal fees are much more common. It is then that you are charged a direct interest rate of a few percent for each withdrawal. Even if you pay back the loan after just one day, you are obliged to pay the withdrawal fee.
Some lenders are content with the withdrawal fee, at least for the first time. In others, interest starts to run from the first day. Since different operators have different principles for costs, it is important that you compare credit accounts.
How to withdraw money
With a credit account, you can transfer money from your online lender account to your bank account when you need a deposit. It’s a simple thing to make withdrawals. Normally, you just need to log in to the lender’s website and specify the amount you want to transfer. Just like regular quick loans, it usually takes a maximum of one business day before you see the money in your account.
Advantages and disadvantages
A natural question in this context is why you should / should / can choose a credit account over a regular fast loan. To answer that question, you need to know the advantages and disadvantages of the loan type.
The most obvious advantage of credit accounts is that you get more freedom of choice. You do not have to settle for ready-made offers within fast loans, but can tailor your loan exactly as you want it (through your withdrawals). If you need a supplement of, for example, $ 3500 for ten days, you can withdraw just that sum and pay back within ten days. Of course, having a larger frame to withdraw from is also an advantage.
Another benefit is that you often have more flexibility when it comes to repayment. A quick loan must be repaid within a certain time. Instead, for credit card withdrawals, you can often postpone the repayment much like you can for credit cards.
What can be seen as the biggest disadvantage of credit accounts is the usually tougher credit check that is done. Generally, it is more difficult to get a credit account granted than a quick loan and there are also fast loans without UC (ie without control at the Information Center). Of course, the loan amount plays a certain role in this context, but it is generally necessary to have a more stable economy in order to have a credit account granted. It becomes particularly problematic if you have payment notes.
Credit card comparison
That said, it is not uncommon for credit accounts to be compared to credit cards. It is a comparison that is both clearly valid and which at the same time holds something.
The obvious similarity is that the credit account functions as a current credit. Just as you can use your credit card only when you need it, you can claim the credit in your account when the need arises. In this aspect, the credit account functions as a “card without credit”.
The fact that the comparison is limiting is due to the fact that withdrawals in credit accounts can never be seen as interest-free loans. When you pay with a credit card, you always have at least 30 days interest-free credit. If you pay the invoice on time, the credit costs you nothing. However, withdrawing from a credit account costs money from the first day.