What is a short-term credit? Are the credit institutions that offer these type of loans supervised by Banco de España?
Short-term credits are small amount loans usually granted immediately, either by internet or over the phone, without requiring hardly any documentation from the borrower who, in many cases, doesn’t even have the necessary means or guarantees that would give access to financing provided by credit institutions, being, therefore, exposed to this type of products.
Because they are granted so easily (they’re prompt and hardly take any paperwork nor economic requirements), they come at a very high price: they must be repaid within a very short period of time, they have very high interest rates and fees leading to a sky-high APR that reflects the real cost of the loan.
That’s why before taking out a short-term credit, it’s important to be sure about the exact amount we will have access to, the instalment to be paid and above all, to be aware of the real borrowing cost.
Calculate the APR of a loan by clicking here
Last but not least, it’s important to point out that most of the companies that offer this type of financing are not supervised by Banco de España since this product isn’t only reserved for credit institutions.
To check if the company offering you this loan, or with which you may be interested in signing for a loan is under Banco de España’s supervision, click here to see the list of supervised Institutions and Agents.