Mini credit guide: Everything worth knowing about mini credit
In addition, you should be aware of the delays due to the short term in these loan offers even before borrowing. At the end of the repayment term, the contractually agreed loan amount must be paid to the loan provider. If this is not the case, expensive debt collection measures along with corresponding notifications to information services such as private credit, Creditreform, etc., are likely to occur quite quickly. An avoidable mistake that makes any short-term loan unnecessarily expensive!
It is the responsible borrowing!
Loans offer the advantage of being able to bridge and solve financial emergencies. Or to make expensive items affordable over a longer period of time. But loans – no matter of what kind – always carry the risk of over-indebtedness due to improper handling. This also applies without restriction to a short-term loan or 30-day loan.
After all, almost every sixth debtor in Germany had clear problems in 2016, to be able to repay his loans one or more times!
Thus, an important note applies at this point:
Under no circumstances should a mini loan be taken in order to serve another loan. Similarly, the mini loan is not suitable for a consumer financing or even a holiday trip, which you can not afford at all! If you are already in debt and are subject to coercive measures by potential creditors, please refrain from temporarily solving these problems by taking back a loan!
In such a case, please choose the way to a debt counseling service in your area. These are often maintained by charitable associations as well as consumer protection organizations and provide qualified assistance in overcoming the over-indebtedness.
What is the difference between the mini loan and the “normal” installment loan?
If you look at the basic features of a mini loan, the most important differences are obvious:
- running time
- Amount of the maximum loan amount
- the annual percentage rate
- Service options can be booked individually
The term for a mini loan
The classic installment loan usually has terms of between 6 and 144 months. However, the repayment terms for a mini loan or short-term loan amount to at least 7 days up to a maximum of 60 days. However, here stands out the mini loan offer of Camibank from the series. There, the mini loan can be taken up to a term of 6 months. However, the Camibank’s direct money offer must take into account the corresponding rules for repayment during this long term.
The maximum loan amount
Classic banks set their normal installment loan offers a minimum loan amount of € 1,000 with an upward (almost) open end. However, the mini loan starts already at 50 euros (SuperFastCredit) and currently ends at 3000 euros (Neofunding existing customers & Camibank).
The interest rate on the mini loan
With currently at least 7.95% interest pa ( Viloan mini loan ) and a maximum of 13.9% pa (Neofunding mini loan), the credit offer of the mini loan provider – based on the effective annual interest rate – ostensibly significantly more expensive than the most common offers for a classic installment loan. Compared to the credit line, however, the mini loan is comparable to the interest rate. As a result, under the aspect of interest costs, the mini loan can be considered as a real alternative to a credit line. Thus, due to the very short term and the fixed repayment date, the mini loan is certainly preferable to a credit line. The, this type of credit often imputed interest usury does not exist!
The service options for mini credit
The classic installment credit usually offers no service options such as express transfer, fast processing, etc. How quickly a normal installment loan or consumer credit is processed by the bank is always dependent on the lending bank itself. Thus, several documents must be created, filled in and sent to the bank. Add to that the time-consuming process of Post-Ident! What works faster for one bank in processing can take up to 2 weeks at the other bank. However, if you need short-term financial support through a microcredit, here is a much better care with a small loan and the choice of appropriate service options. Thus, all short-term credit providers make it possible to complete the online application and the necessary documents by e-mail. The modern Video-Ident procedure and the Digital Account Check are increasingly being used for the legitimacy check. Consequently, the application process for a loan can usually be completed online within 24 hours!
The differences between mini loan and installment credit at a glance
|criteria||Mini credit||Installment credit classic|
|loan amount||50 – 3,000 €||from 1.000 €|
|Loan term||from 7 days to 6 months||from 6 months to 12 years|
|Processing documents & identification||Online / Post-Ident / Video-Ident||Online / Post-Ident / Video-Ident|
|credit decision||few minutes after online application||1-3 days after receipt of documents|
|Express payout||optional for a fee||Bank-dependent|
|Effective interest rate||from 7.95% (Viloan)||from 0.00% (Smava)|
Mini loan despite private credit?
Anyone applying for a loan in Germany, regardless of their nature, is automatically subject to a so-called credit check. To put it simply, the valuation of the economic circumstances of a potential borrower is carried out on the basis of a database deposited with a credit agency such as private credit. The most important goal for the lender is to determine in this way whether in the past a borrower has shown “flawless” financial behavior. This includes, among other things, the punctual payment of bills, no problems with the current account, no danger of over-indebtedness due to loans already in progress, etc.
For example, if the private credit negative features such as
- ongoing insolvency proceedings
- Submission of the affidavit
- judicial order of employment and seizure warrant
noted, then the general chance of obtaining a loan is generally zero!
The mini loan despite strained private credit
But are there any slight “negative” features such as a forgotten bill, still existent entries of completed transactions, etc. then the chance of a mini loan for most, here presented credit providers is anything but bad. As a result, short-term credit providers such as Viloan, SuperFastCredit and also Neofunding are granting an instant loan to people carrying a lightly-burdened private credit. The mini loan without private credit does not exist that way, but the mini credit despite private credit already exists and is therefore not a utopia!