Ongoing credit is often the cheapest option
If you often need to borrow some money at the end of the month, then a current credit is often the optimal solution. You only pay interest on the amount that you have borrowed.
If, on the other hand, you had to borrow new loans every time you lacked money, it would be really expensive in various fees. At the same time, interest rates are often lower on current credit.
You’ve certainly heard of a bank loan, but what is a bank loan actually and how does it differ from all the other types of loans on the market? We have looked at all of this in this guide to help you choose the best solution for your finances.
First, a brief explanation of the question; “What is a cash credit”? A bank loan is a form of current credit loan through a financial institution or financial company where you have a maximum limit on the size of the loan. You can borrow and withdraw money on the credit as many times as you like, just as you make sure you stay below the agreed maximum amount.
Great competition between the banks
There is a lot of competition between the various banks, which you can use to get a low interest rate on your current credit. There are many new players who are fighting for customers’ favor. You should therefore not just choose the first and best solution, but instead research the market well.
Avoid overdrafting your cash credit
You always have to keep what you promise, which also applies with a current credit loan. If you have agreed a maximum with the bank of DKK 25,000, you must not borrow more than this amount.
The interest rate becomes significantly higher as soon as you deduct. If you are unable to keep the agreement, then the bank sees a potential risk, and they are really well paid for it.
If you need more money, contact the bank and talk to them about increasing the amount. Never just cover without talking to them first. It may well be that the bank will have a slightly higher interest rate to increase your credit, but it is certainly far cheaper than if you just overdraft.