Special features of a seasonal loan

 

 

The seasonal loan is a special type of loan, which differs from other forms of loan especially with regard to the term. The seasonal loan is characterized above all by a precisely defined term, but also by a fixed interest rate and constant monthly rate. The loan also requires a careful examination of the applicant’s creditworthiness, and the respective bank may also require security – this is different for every credit institution.

Seasonal loans are used in many different areas, but are particularly common in the agricultural sector. Here, the seasonal loan can be between three and nine months, while a normal bank loan usually has a term of one year or more. The farmer can then repay the loan to the bank from the proceeds of his sold crop.

What needs to be considered with a seasonal loan?

What needs to be considered with a seasonal loan?

Nowadays not all banks grant seasonal loans, which is why the search for a suitable partner can be a bit more complex. With this form of credit, only the debtor’s assets are liable in the event that they cannot meet the monthly claims. If the loan is issued as a classic blank credit, the bank usually requires corresponding collateral. These can, for example, be guarantees from relatives.

In most cases, these loans are drawn on during the high season of the farm, so that the high costs can be paid without any problems. Of course, the loan can also be used in other commercial areas, but these are primarily companies that work in seasonal operation. In addition to agriculture, this can also be tourism or fishing. Such companies experience financial bottlenecks in some phases throughout the year because of course there is no income at certain times. Then a seasonal loan is just the thing to fill the financial gap and then be able to reliably repay the installments in the productive period.

Can it be obtain easily?

Can it be obtain easily?

In principle, the seasonal loan is very similar to a normal installment loan from a branch bank or direct bank, but its term is significantly shorter. The interest rate level is roughly the same. Anyone interested in such a loan should nevertheless carry out a careful comparison of the individual banks before concluding the contract.