In certain circumstances it may happen that you suddenly need some extra financial leeway, for example because you have to pay an important bill or you cannot postpone a purchase until your salary has been deposited into your bank account. Of course in such a case you could ask a family member or close friend for help, but the threshold to take this step is usually very high for most people. However, if you do not want to burden people in your immediate environment with your money worries, you can also orient yourself in the world of mini-loans.
What is a mini loan exactly?
As the name mini loan indicates, it is a loan form where you can only request a small amount of money. As a rule, you can only borrow up to 1000 euros and the duration of a mini loan may not last longer than 3 months. As with other forms of loan, a fee must of course be paid to the lender on the loan amount and mini loan. However, this is usually not an interest rate that is calculated on the outstanding debt, but a fixed amount that must be repaid in one go on top of the borrowed money.
Where can you find mini loans?
Unlike most regular loans and credits, you cannot take out a mini-loan with a physical bank or financial institution. After all, the providers of mini-loans have shifted their field of activity to the internet. If you want to find a suitable mini-loan, then you must first of all have a secure internet connection in order to be able to trace a number of providers of this type of loan via a search engine, such as Google.
Check the reliability of the providers of mini-loans
The moment you have one or more mini-loan providers in mind, it is important to subject them to a thorough inspection. After all, not all providers of (mini) loans that are active on the internet are equally reliable. In order to prevent you from becoming entangled in the networks of a rogue provider, it is certainly advisable to read a number of customer reviews and / or reviews that relate to the provider and his product.
Satisfied, or less satisfied, customers can give a better picture of the method and quality of the product offered than the smooth talk and impressive advertising messages from the lender himself. Often, however, you will come across a number of outliers to the positive, or even negative, side, but you better put this aside because this type of review usually involves too many emotions or interests, for example because the customer is a familiar person of the lender or is very angry about how he or she has been treated by the relevant mini-loan provider.
Compare multiple mini-loans from different lenders
By blindly working with the first best provider if you want to take out a mini loan, you run the risk of missing out on the most favorable deal. Preferably, you therefore first collect a number of offers from different providers so that you can carefully examine the costs and conditions. You can easily request these quotes from behind your own computer by performing an online simulation and / or submitting an online quotation request on the website of a lender. In both cases you just have to enter the requested personal, financial and loan data in a special tool. Once you have done this, a personal quote will appear on your screen or be sent to you by e-mail.
Due to the fact that there are huge differences between the various mini-loans, which are moreover being presented by more and more providers, the costs associated with a mini-loan are often very different from provider to provider. In order to find the most advantageous mini-loan, which moreover fits in best with your personal and financial situation, it is advisable to obtain sufficient information from a number of reliable providers regarding, among other things, the borrowing costs, the applicable conditions and the term. of this small loan.
Use a comparison website
If you don’t have the time or just don’t feel like studying each individual mini-loan provider and their products, you can also look for a reliable comparison website. Comparison websites have in fact focused on collecting all kinds of information with regard to, for example, loans. By entering your personal preferences and financial details, you can find out within a few minutes on these types of websites which providers you can take out the most favorable mini-loan for.
After processing the information provided, you will see a list of results on your screen. The most suitable mini-loan will generally be at the top of the list. As soon as you want to start using the quotes that are offered to you in this way, you usually only have to click on the corresponding button. On the website of the lender, the application can then be made definitive by providing additional information and sending the whole.
Also use multiple comparison websites
On a comparison website, the products of several suppliers are generally compared with each other, but that does not mean that you will always see the most favorable offer. Not all mini-loan providers are included by every website when making comparisons. So there is a chance that you will miss the perfect deal if you are only guided by one comparison website.
By using multiple comparison websites and / or websites of lenders when making your choice, the chance of the ideal mini-loan will increase considerably. Moreover, in this way you will also be able to bypass that certain providers have more or less bought their high listing in the results list. Unfortunately, there are loan providers who are willing to pay for a higher position in the list of results that potential customers see after they have made an online comparison. Often these providers fall into the basket if you also search for information about their product on their own website or on another comparison website.
Advantages of a mini loan
The moment you want to borrow a small amount in the short term, a mini loan can be an ideal solution. You have:
- get the money you need in a few days,
- nothing to do with a legally required assessment at the CKP (because the loan is below 1000 euros and the duration is less than 3 months),
- no mountains of paperwork because, as a rule, the application can be processed almost entirely by telephone and / or digitally,
- no fixed income required (only proof that you can repay the debt and the loan payment within the agreed period), so also people with debts, people who have a negative mention at the CKP, students and beneficiaries can apply for a mini loan,
- a lot of privacy because there is no personal contact with, for example, a bank employee or intermediary.
Disadvantages of a mini loan
Just as with a lot of other things, there are also a number of disadvantages to a mini-loan. You can think of:
- the very high borrowing costs associated with this form of borrowing money,
- the very short duration of a mini loan,
- the very small loan amount,
- a sizeable number of less reliable mini-loan providers that are currently active,
- to be able to take out only one mini loan with a provider (as soon as you want to borrow more money this way, you will have to approach several providers with one application),
- the loan amount and the loan payment must be repaid in one go so that you cannot spread the costs over a longer period.
Submit the application for a mini loan
Once you have found a reliable provider who also wants to offer you a favorable mini-loan, you can proceed to apply for such a loan. Most mini-loan providers have special digital formulas available for submitting an application that you can complete quickly and easily. You must also enclose the requested supporting documents with these papers in order to be able to send the entire document via the digital highway. In other words: you don’t even have to leave the house to apply for a mini loan.
What happens after applying for a mini loan?
Once the mini-loan provider has received an application, all data and supporting documents will be assessed by expert staff. However, such an assessment will be different for an existing customer than for a new applicant.
- As a rule, the request for an existing customer can be assessed much faster because in this case the loan history that this person has built up will be reviewed. If there has never been a problem with the repayment of a mini-loan and the accompanying loan payment, the lender will soon proceed to approve the application. The requested amount of money can then be deposited into the customer’s account within a few hours.
- The application for a new customer will generally require a more accurate assessment. In practice, this usually means that it is not only considered who wants to apply for a mini-loan, but also what his financial situation is and whether there may be problems with the repayment of the debt and the associated loan payment. The provider of the mini-loan will often have to make a kind of assessment as to whether someone is considered suitable to borrow a certain amount and whether the financial risk for the lender will not be too great. If the financial risk is considered acceptable by the provider, the mini loan will be granted and the requested amount will be transferred to the bank account of the new customer. On the other hand, if the financial risk is considered unacceptable by the lender, or if the integrity of the new customer is questioned for other reasons, the application will be resolutely rejected. The applicant will of course have to look for another way to solve his financial problems.
However, the method of assessing applications for mini loans may vary widely from supplier to provider. In practice, this may mean that an application is rejected at one lender, but is granted at another. However, the conditions, but also the costs, that will be associated with both mini-loans, can differ considerably from each other. Granting a mini loan does not always have to be the most favorable solution.
Prepare repayment plan
Before you apply for a mini loan, you should check with yourself whether you are able to repay the borrowed money to the lender within the agreed time, along with the predetermined loan fee. By taking out a mini loan, even when it involves a few dozen euros, you will commit to a certain financial obligation. The moment you are unsure whether you will be able to pay off the mini-loan and all related costs before the term has expired, then you are advised to cancel the application. By looking for other solutions for your ( temporary ) money shortage, you can prevent a lot of extra costs and even unnecessary financial problems. Even before you apply for a mini loan, it is good to draw up a thorough repayment plan in which you determine how and at what time you will settle the outstanding debt again.
If you have not paid back a mini-loan, together with the loan fee, the provider will generally charge extra costs. The outstanding debt will then suddenly become considerably higher, so that you may end up in even more financial difficulties. In the worst case (for example, if you are unable to repay the borrowed money at all), a lender may decide (after sending several reminders and reminders) to transfer your case to a bailiff.
This bailiff will also try to encourage you to pay the outstanding amount. You must be aware that additional costs will be added (the bailiff also wants his services reimbursed and will add these costs to the debt already accrued). In this way, a relatively small debt can go sky high and even put you in very serious trouble.
Tips for taking out a mini loan
Most people do not often take out a loan, and not even a mini- loan, so they will not really become skilled at it. For that reason, it is important to always know what you are doing and to realize that:
- you only have to work with a reliable provider of mini loans,
- you can only find the most favorable mini loan by making a good comparison,
- you do not have to borrow more money than you strictly need because otherwise the borrowing costs can quickly rise,
- you have to pay off the outstanding debt and the loan on time to avoid unnecessary costs,
- you do not have to take out a mini-loan with the aim of repaying another one because the borrowing costs will then continue to accumulate and your need for money will continue to increase,
- you prefer not to take out more than one mini-loan because otherwise you will have to deal with several creditors, you can easily lose the overview and also incur unnecessarily high borrowing costs (especially if you compare this with those of a personal loan, for example),
- a mini-loan provider may never ask you to first transfer a certain amount before your loan application can be processed (these are often rogue providers who have a bad intention),
- your intuition is often right and therefore it is better to look for another provider of mini loans if you do not feel good with a certain lender,
- you do not have to agree with absurd conditions and extremely high costs associated with a mini loan by a (often malicious) provider,
- you can usually find a lot of information on the internet about a certain provider of mini loans (for example by entering his name in a search engine such as Google) and thus prevent you from doing business with an unreliable party.