Loans are characterized by certain terms. Most of these are between 3 to 5 years. A loan with a term of 1 year is rather rare. The banks do not offer a one-year term. The reason is the higher processing costs compared to loans with longer terms.
The requirements and costs of a short-term loan
The washing machine does not work anymore, but with the money on the daily account the bill for the heating engineer has to be paid. Or a costly repair is necessary on the vehicle. In such situations, short-term loans are worth gold. They help bank customers through financial bottlenecks until they have the necessary funds back. Loans for one year can be used for rescheduling, for the car and apartment purchase or for the trade.
However, since the processing costs of a short-term loan of one year have to be spread over the shorter term, the costs to the customer are significantly higher than those of a medium-term loan. By contrast, interest rates on these short-term loans are comparatively low. The reason is that banks are currently not expecting rising refinancing costs.
Short overview of possible credit sums and interest rates
One-year loans are available to bank customers from a loan amount of 1000 euros. The maximum loan amount varies from bank to bank. Some banks grant these loans even up to a loan amount of 70,000 euros. Even with large amounts, interest rates on the loan for one year are currently relatively low. They amount to between 2.79 percent and 6.9 percent per bank. Depending on the amount of the loan, the bank customers pay the amount back to the bank in monthly installments of between 43 and 3082 euros. An independent comparison on corresponding Internet portals shows customers the loans with the best conditions.
Good alternatives are the on-demand loan or the employer loan
The on-demand loan represents a good alternative to a short-term loan of one year for customers. It is similar to the current loan because it is linked to the checking account and can be used as needed or not. The call-off loan also has a term of one year when used. However, the borrowing costs for this loan are much cheaper than for the credit line.
However, unlike the MRP, the loan is provided with a certain amount of repayment. If the loan is repaid for one year, it can be used again by the customer at any time. The employer loan, as the name implies, is granted by the employer. Also, this loan is short-term and is intended to help the employee meet his financial obligations.