A mini loan is a loan where you can borrow a small amount for a short period, up to a month. A mini loan is very expensive. Applying for a mini loan is easy, but whether it is also a wise loan for many people?
- Tip: nowadays you can also get a loan of 1500 euros through the Spanish bank Bankate, without extra high costs.
Mini loans can be useful if you want to borrow money quickly. But beware: this does not apply on weekends and with a number of mini loan providers, for example, you must first be a client before you can really borrow money quickly (within 10 minutes). If you are not yet a customer, it usually takes a little longer before you have the money directly in your bank account.
- You can request a mini-loan directly from Viloan or Sandcash, but there are high costs involved.
- These costs are not immediately visible from the websites of the mini-loan providers.
- The risk of a mini loan is therefore high. The mini loan is therefore often discouraged.
- People with debts, a low income or a negative BKR registration in particular have to think carefully about whether they want a mini loan.
- There are also alternatives to the mini-loan that are cheaper.
Mini loan without credit
Another feature of the mini loan is that most providers hardly check whether you are creditworthy. That is why the providers mainly focus on people with a negative BKR assessment. Almost nobody is interested in borrowing money.
Many people who decide to take out a mini loan are often already in a very difficult position. They search the internet for taking out loans because they need money quickly, for example to pay the rent of the house or the insurance of the car or the dental bill.
They hope that they will have more money before the time to redeem. And if they do not have the money, they take out a quick mini-loan with another provider. And so they go from debt to debt.
Borrow money quickly via mini loan
But there are also people who just need money very quickly because they know that they can pay off the loan but now have no money. In this case, a mini loan can be useful.
However, taking out a mini-loan is not always cheap, and you usually don’t pay much attention to the possible consequences of taking out a loan.
A number of mini loan providers are asking for extra money to take out the loan. They call these costs advisory costs, guarantee costs or include extra compulsory insurance with the costs.
High cost mini loan
Other providers of mini loans make it even more colorful. They come with an obligation that people who want to borrow money quickly through their mini loan choose a guarantor. This costs a lot of money, about 25 to 35% of the total amount of money that you borrow. These costs are on top of that and you have to pay everything back.
These providers of mini loans also give you the option to choose your own guarantor. You must then provide information about this person, such as address details and a recent bank statement. But whether this is really possible, or just sales pitch is not known or confirmed by independent sources.
In addition, there has been a lot of hassle in the past concerning providers of mini-loans. They did not fall under the usual rules of the laws on borrowing money and demanded extremely high interest rates. This is also called usury. So now we have put a stop to this and the providers of the mini-loans must also adhere to the usual rules.
In other countries, such as England and the US, in many cases, usury rates are still permitted and there are people who have huge debts thanks to the mini loans. A mini loan is called Payday Loan there. But also appear in these countries rules to curb the Payday Loans.
In the Netherlands, however, it does not mean that providers can no longer be found. For example, some providers have simply continued to offer mini-loans, but through other countries such as England or Malta. Or they look for other solutions to earn a lot of money from people who want to borrow money quickly.
As a result, the Netherlands Authority for the Financial Markets (AFM) concludes : “A number of providers may offer credit without a license and in some cases charge high rates”. The AFM advises:
“Think carefully before you take out a loan. Take enough time before you make a choice. Most people take at least three days to make a decision. “
Mini Loan Providers in the Netherlands
Independent research has also shown that a number of providers who simply advertise do not have a license. ” Viloan and Friendly Finance are not licensed and should not be allowed to operate on the Dutch market anyway,” says research firm Moneydude in a mini-loan investigation.
After the introduction of new rules in 2012, there was a clearing down between providers of the mini-loans. The number has grown steadily since 2013, but in 2014 there are only a few providers left. It remains a strange market where a number of parties earn a lot of money.