Fast credit may not be the most advantageous type of loan when applying annual interest rates. However, it is quite good when compared to other short term loans. In this article, we’ll look at interest rates on common short-term loans – mortgages on pawnshops, fast loans, and overdraft offered by banks.

With both mortgages and overdraft services at banks, you will have to pay for the first use (overdraft), but for a quick loan, the first loan is available free of interest. Therefore, in principle, fast credit is the most advantageous type of credit available today in Latvia, at least if you use it wisely.

Apply for the first interest-free loan

Apply for the first interest-free loan

Annual interest rates – the most advantageous is overdraft

Annual interest rates - the most advantageous is overdraft

Fast loans and pawnshops have relatively similar annual interest rates. In this respect, overdraft leaves competitors far behind. The APR for fast loans in Latvia ranges from 100-300% (8-25% per month) and for pawnshops from 200-288% (18-24% per month). Overdraft annual interest rates range from 18-30 percent per annum.

However, it should be noted that overdraft is a paid service. It costs between $ 7 and $ 30. In addition, some banks also charge extra for unused overdraft, so at least review your contract if you don’t want to lose money for any logical reason.

The safest of the three types of credit

The safest loan will definitely come from a pawnshop, if you are at least prepared to divorce the pledged property. Overdraft is, in principle, a credit against pay, so safety issues go away. With fast credit, you seem to have the best chance of getting into the soap with debt collectors, but this is of course only if you are planning to not repay the loan.

The best loan

The best loan seems to be and remains an overdraft – at least if you plan to use it more than once. Quick credit is the best value for a one-time loan, but a pawnshop is good in the sense that you can sell a product quickly, get cash, and forget about it if you’re not going to pay it back.

Each type of loan has its pros and cons – for overdraft the main drawbacks are the processing costs and formalities, for the fast credit the lack of security and for the pawnshop the high interest rates.

The credit you get depends largely on your situation. If you are into short-term financial problems and need money fast, then quick credit will be beneficial – but only if you know for sure that you will be able to repay the credit. If the problems are a bit more serious, ie you do not know the next time you get to the money, it is more profitable to put a good in the pawnshop. But if you have no problems at all and want to spend, overdraft is the best option.