A cash reserve is a type of loan that you can take out when you fall short of a few euros and where you only pay costs on the amount borrowed. Often these costs are quite high. The available amount can be linked to a credit card or be a single sum. There are numerous lenders who have included a cash reserve in their portfolio. Depending on your income and financial situation, the amount of the cash reserve can vary between 500 euros and 5,500 euros. If you request an initial cash reserve of 500 euros, it can be increased if your income changes.
The principle of the money reserve
With a cash reserve, a previously discussed amount is made available for you to withdraw. You can choose not to include anything at all, in which case you do not pay interest either. Every month you repay a portion in function of the amount withdrawn. This repayment contains a part of the costs and a part of the return of the capital. As a result, the reserve grows again and the amount is larger than you can withdraw. Depending on the amount, a period is also determined within which the reserve must be fully paid. For example, if this is every two years, it means that you must have paid everything within a period of 24 months, but you can withdraw money from the reserve the next day. This rule has been created to protect the consumer.
Why would you opt for a cash reserve?
A cash reserve is especially recommended if you are looking for peace of mind in the financial field. You want to be sure that unexpected bills can be settled immediately and that you do not suddenly end up in a difficult position. Because you only pay costs when you actually withdraw money, the loan is in principle free if you do not use it. However, if you are looking for a sum of money that you want to use immediately, then this loan is an expensive option and it may be better to first check whether a personal loan is not more interesting. Request loan quotes here to find the best solution.