A mini loan is a loan that you take out for a shorter period. This type of loan is often taken out when a financial problem suddenly arises. This can happen if the washing machine breaks down or if a major repair has to be paid to the car. This type of expenditure often cannot wait. A family needs a washing machine and the car is often indispensable. But of course there may also be other reasons why you need money quickly for a necessary expense. Then a mini loan can come in handy.
What is a mini loan?
A mini loan is an amount that you borrow for a short period. In most cases it also concerns a small amount up to a maximum of 1500 euros. You must repay this loan amount within a specified period. This period depends on the amount of the loan. The period is usually 60 days at most. With larger amounts above 1000 euros you can often repay in two installments. The first term then expires after 30 days and the second after 60 days. A mini loan is also called a flash loan or mini credit. All these names naturally refer to the short-term nature of this method of borrowing money.
Where can I take out a mini loan?
You can take out a mini loan on dozens of websites on the internet. Usually you only need to enter some information to submit an application. You then send a copy of your proof of identity to prove that you are who you say you are. This can of course be sent digitally. Often it is also necessary that you make a test payment of 1 euro cent from the account where you want to deposit the money. This is also to check whether the specified account is in your name. In many cases you can borrow an amount within 24 or 48 hours in this way. So it’s a good way to get extra money quickly.
The guarantee with a mini loan
You usually pay little interest for a mini loan. You do pay an amount in administration costs that can amount to € 12.50. Because the lender naturally wants as much guarantee as possible that he will actually get the borrowed money back, in most cases when applying for a mini-credit you have to provide the details of a third person who is willing to act as guarantor for you. If it happens that you are unable to repay the loan or you do not pay on time, then this guarantee will be used to repay the loan.
If you cannot arrange a guarantee, in many cases it is not possible to take out a mini loan because most lenders make this a condition. When designating a person who is a guarantor, bear in mind that this person must also provide a copy of his or her ID proof. So you cannot just give someone’s name that is not known. This, too, is an additional assurance that lenders build in to increase the chance that the borrowed money will be repaid.
What are the conditions for a mini loan?
To apply for a mini loan you must meet a number of basic conditions. First of all, you must live in the Netherlands and have a Dutch bank account. In addition, a minimum age of 18 applies. Some lenders have a minimum age of 21 years. If you do not have Dutch nationality, this can sometimes result in you not being able to apply for a mini-loan. You must also have a fixed address in the Netherlands. If you cannot prove that you are the owner or tenant of a home or have a room rental contract, it may also be that a loan is refused. In addition, you should not be known as a defaulter.
Credit Registration Office
Many providers of mini-loans check with the Credit Registration Office (BKR) in Tiel whether you have more financial obligations. There are also bodies that use their own system for checking creditworthiness. If this check turns out negative, your request for a mini loan will be rejected.
Are there risks associated with a mini loan?
The biggest risk for taking out a mini loan is that you cannot repay the loan amount on time. If that fails, you will pay a hefty interest payment that can go up considerably. If you take out the mini-loan and you already know in advance that it will not be possible to pay it off on time, you must bear in mind that you will be faced with high costs. If the person who guarantees you does not reimburse the amount, the costs will only increase further. In addition, there are lenders who do not have too sympathetic recovery measures. You can get a collection agency at the door and their methods are sometimes not always decent.
When should I not request a mini-loan
It is better not to request a mini-loan for a purchase or expense that is not strictly necessary or that may possibly be delayed. In other words: If you want a mini-loan because the television is broken, then you might want to consider doing without TV for a while and saving for the purchase of a new one. A TV is, although some people may think otherwise, not a necessity of life. Paying a vacation with a mini loan is also not a good idea. After all, a vacation is not necessary and you have to repay the money in the reasonably short term. If you do not have the money to go on holiday, then it is really better not to. Then just go a day away in the Netherlands, that is cheaper and you can have fun too.
A mini-loan is often taken out to bridge the time when the money runs out until the next payment of the salary or benefit. If you spent too much money in a certain period and it takes another two weeks before your salary is paid, a mini loan can offer a solution. After all, you have the money in your account within a few days and you can dispose of it immediately. If you take out a mini-loan for this purpose, try to keep the loan amount as low as possible. For example, if your income is 1000 euros, then it makes little sense to borrow 1000 euros or even more. You often have to repay the first half of your loan within 30 days.
In practice, this means that the balance on your account is zero. You get your mini loan of 1000 euros, but you must pay back 500 euros within 30 days. Your income is 1000 euros, so before your next salary or benefit comes in, your balance has probably fallen to 0 euros again. After all, the fixed costs must also be paid. A situation then arises that you fill one hole with the other. Of course you can always take out a new mini loan. But do not forget that you always pay administration costs for these loans and those costs will increase considerably over time.
Look at your spending pattern
If your situation is such that you keep running out of money and you regularly have to apply for a mini-loan in order to be able to make your payments on time, then it might be wise to take a critical look at your spending pattern. List all issues. Not only your fixed costs such as rent, gas and electricity, insurance, municipal taxes but also your expenses for groceries and other personal expenses. It often helps to pay a fixed amount per week and to do your shopping. This way you are more aware of what you spend and you only find out later that you actually spend too much per week.
Pay attention to offers in the supermarket and try out the private brands instead of the A brands, this often saves a lot in price. Also make sure that you do not bring too many food into the house. First make out what is left before you do new shopping. Do not just throw away something that is about the date, but first check whether it can no longer be eaten.
Is a mini loan registered with the BKR?
Mini loans are short-term loans that are often not registered with the BKR. This can happen if you do not meet your payment obligations on time. Then this loan will also receive an additional mention that there is a delay in repayment. This can have consequences for entering into new financial obligations. Some lenders do not use the BKR. They use their own system to check your creditworthiness. Often there is no clarity about what this system entails.
No BKR check
The comment “no check at the BKR” on the website of a provider of mini-credits can sound attractive. But do realize that other obligations that you have will continue. The rent must simply be paid, the insurance premium and the advance for water, electricity and gas must also be paid on time to prevent closure. That is why it is wise to only take out a mini-loan in exceptional cases.
When can I take out a mini-loan with confidence?
You can take out a mini-loan with confidence if you are sure that you can repay it in time. If you expect an extra payment, such as holiday pay or a year-end bonus, you can possibly make an advance on this by taking out a mini-credit. After all, you know for sure that you can repay this amount in time without further problems. So if the fridge breaks and a new one is needed urgently, you can take out a mini loan of 250 euros for this. As soon as your salary or holiday pay is paid, you can use it to pay off the loan again. You then do not have to postpone the purchase of the new refrigerator. It is also not necessary to purchase the device on installment, this often saves you a high interest rate that can be as high as 16 percent.
Is it safe to take out a mini loan?
There are dozens of websites of providers of mini-credit on the internet. Some are reliable, others are less reliable. It can sometimes be difficult to pick the right provider. Perhaps you can gather information from people in your area who may have experience with taking out a mini loan with this body. You can also search the internet for experiences with a specific lender. In most cases, nothing can go wrong if you repay the loan properly on time.
You would do well to ensure that the money is preferably in the account of the lender even a day earlier than the closing date. This way there can be no misunderstanding about the timeliness of the payment. If a money provider proceeds to collection, make sure that a collection agency is not a bailiff. For example, it cannot be said that your income will be seized. This is only allowed by the bailiff.
Problems when paying back a mini loan
If you come to the conclusion that you cannot repay the mini-loan or cannot pay it back on time, bear in mind that you have to pay a high interest rate. In addition, the person who guarantees you will be called upon to pay the loan. Maybe you can make an arrangement with him or her that you pay off the amount in installments that you can pay. This of course means that the guarantor must repay the loaned amount to the lender on time. In such a situation, it might be better to try to borrow the required amount directly from a friend or relative rather than request a guarantee for the repayment. This is how you prevent someone from putting you in front of the block to take care of the repayment.