Payday loan: Immediate payment of your loan, also with Private credit entries
The mini-loan offers a way to bridge short-term financial bottlenecks. Customers use such a loan when unexpectedly a necessary expenditure arises. These loans are different from traditional installment loans because of their short maturity and lesser borrower requirements. Furthermore, they are usually associated with higher interest rates and poorer credit conditions. This raises the question of the merits, risks and general suitability of this type of loan.
Mini loan calculator
If you want to take out a mini loan, you can quickly compare the offers in the mini loan calculator and apply for the appropriate mini loan offer within less.
What is a mini loan or a payday loan?
The mini-loan is a short-term loan with lower loan amounts and a significantly shorter term than is usual in other lending business. In English-speaking countries, mini-loans have been known for some time as payday loans. Typically, these loans are characterized by loan amounts between 50 and 3,000 euros. Meanwhile, however, they are also available from providers such as dai bank up to 5000 EUR. The duration is between 15 days to 3 months.
Mini loans can be requested directly online – no PostIdent procedure necessary
Mini-credit providers are aimed at customers who have unexpected short-term expenditures. This can be the case in emergencies such as a mandatory car repair. The number of providers is growing steadily in Germany, which allows a conclusion on the increasing popularity of this loan variant. As recently as 2011, only one provider was found in the German market, but now there are significantly more. Small loans closed a gap in demand as there were few opportunities to obtain liquidity in the short term.
Advantages of mini-loans
Customers apply for mini-credit online in just a few steps. The credit decision is made quickly, while customers also do not have to wait long for the payout after a credit commitment has been made. The identification takes place with the offerers via video Ident. Thus borrowers do not need to leave the house to apply.
The idea of mini-credit is basically nothing new and can be attributed to the payday loans spread in many English-speaking countries. In the US, Canada, the United Kingdom and Australia these payday loans have existed for some time. They bridge potential financial gaps until the next payday.
The first German provider was Gandalf AG Berlin, which has been operating in the German market since 2011. With Targobank AG also has a classic bank from 2015 Mini loans (called direct money ) are offered, and this credit end of the year was discontinued 2017th
Mini loan provider in the German market
Gandalf mini loans
Since the first mini-credits were offered in Germany in 2011, the offer is still clear today. Gandalf sees itself as a pioneer among the short-term credit providers and offers mainly loan sums between 100 and 3,000 euros.
Grayjoy mini loans
Grayjoy has a banking license from the Malta Financial Services Authority. The provider offers immediate payments up to 600 euros. According to its own statement Grayjoy has already helped over 100,000 customers worldwide.
The offer Shrek Money understands itself as a service in the loan mediation. The Shrek Group operates in 21 countries in the field of mobile lending. The mini-loan brokered under this service is called Fiona.
Lilo “emergency call”
The Lilo AG offers a money emergency call, which grants a credit limit of 100 or 199 euros for terms of 30 to 60 days. This is a fixed fee per emergency call due, which is 6 euros.
Nemo mini loan
The in Halle (Saale) based provider Nemo has a variety of offer and grants in cooperation with other providers and small loans with loan amounts of up to 1,500 euros. Express credits with a credit decision within 60 seconds are also possible.
Loan-up mini loan
The provider Dory offers mini loans especially for entrepreneurs and self-employed. Loan sums between 1,000 and 20,000 euros are provided for the purpose of interim financing.
The Tinkerbank promotes mini-credits up to 5000 EUR. On the page directly one finds however no special mini loan offers, but altogether quite favorable conditions, which apply also also for the mini credit range up to 5000 EUR.
Mini loan requirements
The first requirement is the minimum age of 18 years. An exception is the provider Grayjoy, whose customers even have to be 21 years old. A regular income is another requirement. Typically, 601 euros will suffice for regular monthly income. Some providers, including Lilo Money, also offer their loans to the unemployed. The reference point in this case is the unemployment benefit. Other requirements include residence in Germany and the Stich of a German current account. A valid identity card is another requirement for the loan application.
Private credit on mini loans
For mini loans providers take a credit report. Accordingly, an appropriate Private credit score is required. The criteria here are less strict than with a conventional installment loan. Due to the low loan amount and the manageable duration, the risk of a default is low. However, if a borrower has judicial dunning procedures or reports from collecting societies, even mini loans may be rejected.
Since the identification usually takes place via video ident, the hardware and software required for this is a further requirement. All you need is a PC with webcam, a notebook with a front camera or a corresponding equipped cell phone with camera.
Minicredit Interest and Conditions
The interest rates and terms of the providers of mini loans differ depending on the loan sums and maturities. Similar offers from different providers usually have pretty similar interest rates. The annual percentage rate on mini-credits is usually over 13 percent. Since these are very short maturities, these loans appear to be quite cheap in the short term. Who lends about 500 euros for a term of 30 days, can expect to pay interest of a little more 5 euros.
Additional options for mini loans – cost trap?
With higher costs, every kind of special wishes are connected. Suppliers generate a large part of their sales through special conditions. For example, if borrowers are looking for repayments in multiple installments, the fees will grow dramatically. Gandalf charges 49 euros for the option of repayment in two installments. In the case of a loan of 250 euros, this would be an additional 19.6 percent. With a loan amount of 500 euros, it would still be about 9.8 percent.
Additional fees may apply for certain types of withdrawal. If you want a very fast payout, many providers offer express loan options. This service incurs additional costs, so Malfoy express service costs between 29 and 299 euros, depending on the amount of the loan.
For example, additional fees apply if customers require preferential processing of the loan application or an accelerated credit decision. The provider Grayjoy offers in this context, the option Super Deal for customers, where time is short. This causes costs of at least 39 euros (from 100 euros loan amount) and a maximum of 99 euros.
It should be noted that these benefits are additional options and there is no obligation to use them. In individual cases, however, the services can be important in order to obtain a loan promptly and to meet important payment obligations.
Mini loan credit sums and maturities
The mini credit sums are between 100 and 3,000 euros. One of the reasons for the proliferation of mini credit is the fact that regular credit institutions generally do not offer loans below a certain minimum as installment credit. This is due to the fact that the costs for the credit check and subsequent credit decision are always the same for banks. Since regular loans usually have a term of between 12 and 120 months, issuing such small amounts of credit to banks is not economical. Therefore, especially customers who need credits between 100 and 1,000 euros, turn to the specialist provider.
Spread among mini-credit providers are sums between 100 and 3,000 euros. Frequently, however, the service providers pay larger amounts only to existing customers who have already noticed positively by timely repayment of a loan.
For the terms are tight time frame of 15 to 30 days usual. Some providers also offer existing customers longer terms or repayments in installments.
Advantages and disadvantages of mini loans at a glance
Advantageous is the usually straightforward process without major bureaucratic hurdles. Short-term financial bottlenecks can be bridged. The small amounts and maturities limit the credit default risk. Especially for very small amounts starting at 100 euros, these loans can be an appropriate means to provide liquidity. The fact that loans can be granted even with moderate Private credit score represents both advantage and disadvantage at the same time. For customers with a weak score this can worsen further, so that in case of doubt the debt trap threatens.
The biggest drawback is the very high interest rates and the numerous hidden costs for additional options. The interest rates on these loans are higher than usual in the market, even in times of low interest rates. Many providers are particularly quick lending decision or payment and only at second glance, the associated additional costs. The small hurdles to taking on such a loan also make some clients defer financial problems rather than sustainably solving them.
Alternatives to mini-loans
An obvious alternative is the Singkocredit. The loan is automatically granted to most current account holders once this is overdrawn. The credit line is dependent on the creditworthiness and the regular incoming payments of the customer. This loan is characterized by high interest rates, which are typically double digits. A claim is therefore intended for exceptional cases.
If you have a credit card, you can take out interest-free loans over a certain period of time. So-called charge cards will, for a certain period of time, refrain from charging interest on a credit drawn on the card. The sales of the charge card are debited only once a month from the current account. So if you claim the credit limit of the card at the beginning of the month, you will receive a loan without debit interest until the end of the month.
Another alternative can be found in the classic installment loan. This is granted by banks with good credit ratings. The interest and conditions are more advantageous than a designated mini loan, while the repayment is made in several installments.
Who needs the loan for a specific acquisition, has the possibility of credit financing with many traders. So-called dealer loans usually represent zero-percent financing. In particular, providers of high-priced consumer goods offer such financing across the board. For most car dealers, furniture retailers and department stores such financing options are a matter of course. However, zero-percentage financing is often associated with small print information. Even if debit interest accounts, closing costs or account maintenance fees may be incurred.