Bankers and credit institutions increasingly offer you loans with small monthly payments. It must be admitted that in these times of budgetary rigor, more and more French people are paying attention to their budget. A small monthly payment, you can't refuse ...!?
If your budget is very tight, you may be tempted to take out credit with the smallest possible monthly payments. For revolving credits the minimum amount is generally 15 us dollars for a reserve of 500 us dollars. To find out more, click on the repayment periods of a revolving credit ( permanent account ) .
For personal loans, the maximum duration is calculated according to the project : for example, for a new car, bankers like Paydaynow can offer up to 72 months of repayment.
Paying as little as possible means extending the credit term as much as possible. This has an impact on the total cost of credit ... and, contrary to what we sometimes hear, this rule is valid for both revolving credit and personal loans. Yes, the longer the loan term, the smaller the monthly payments, and the higher the total cost.
|Duration||Monthly payments||APR||Estimated total cost||Additional cost|
|48 months||$ 351||6.3%||1940 $|
|60 months||$ 289||6.3%||$ 2,440||+ $ 500|
In this first example, with the same rate, the fact of reducing the monthly payment by $ 62, by extending the duration of 12 months, increases the total cost by $ 500! ...
|Estimated duration||Monthly payments||APR||Estimated total cost||Additional cost|
|40 months||$ 90||10%||$ 600|
|22 months||$ 150||10%||$ 300||+ $ 300|
In this second example, with the same rate, decreasing the monthly payment by $ 60 increases the total cost by $ 300! ...
If you are forced, for budget reasons, to subscribe to an offer with small monthly payments do not forget that you are always on hand (it is the law) to repay faster and thus reduce the total cost, free of charge.
For a reserve of money it's simple, you send an additional check as soon as you can: there is no minimum.
For a personal loan you must respect certain rules and send only substantial sums (minimum the amount of 3 monthly payments). To find out more, see our repay a credit before completion page .
NB: the examples presented are not representative of a real market offer. To find out the current rates, see our comparison of current credits .