When you think about borrowing money, you often think about a loan or credit. You then borrow a certain amount that you get deposited into your account. In addition to the money loan, there is also a goods credit. You will not receive a sum of money deposited in your account, but purchase a product with deferred payment. The best-known forms of goods credit are installment purchase and the shipping company credit.
Commodity credit – Benefits
A goods credit has three advantages:
- You buy something for which you actually have no money
- Early repayment is usually not a problem
- Taking out a goods credit is very easy
Commodity credit – Handy for unexpected expenses
The biggest advantage of a goods credit is that you can buy a product that you actually cannot pay at that time. Certainly if something breaks unexpectedly and your financial buffer is not large enough to replace this product, then a goods credit can offer a solution.
Early repayment of goods credit
Another advantage of a goods credit is that early repayment is usually not a problem. In principle you agree on an amount that you repay each month, but you can always repay more. The longer a goods credit runs, the higher the amount that you pay in interest. Every extra repayment that you do saves you costs.
Easy conclusion of goods credit
Finally, you can close a goods credit very easily when purchasing the product. So you hardly have to put extra effort into this loan.
Commodity credit – Cons
The main disadvantage of a goods credit is that this is a very expensive form of borrowing. Most organizations where you take out a goods credit charge the maximum interest, namely 15 percent on an annual basis. The costs for this loan can therefore increase considerably.
Another disadvantage is that you take out the loan through the organization where you buy the product. So you don’t have the option to compare. Moreover, the step to take out a goods credit is small because it is so easy. This makes the temptation great to borrow money, while you might save better for a certain purchase.
Goods credit or loan from the bank
It is often cheaper to take out a personal loan for the purchase of a product. You take out a personal loan with the bank, so that you can compare the different providers. Moreover, you pay much less interest for a personal loan than for a goods credit. This saves a lot in costs.
Borrow money as cheaply as possible? Make sure you choose the loan with the lowest interest rate and best conditions. Compare easily online now.