What is a short loan? European-based studies
If you are talking about a short loan, often it means short-term loan or mini loan. Characteristic of such a loan is the low loan amount. Therefore, the approval of a mini loan takes place within a very short time. However, the lender still requires proof that the amount borrowed can be repaid. The application for a short loan is made online. In most cases, a binding commitment takes place within 24 hours. Depending on the provider and the term, the interest rate varies between 8.95 percent and 14.90 percent. Equally different is the maximum loan amount of the different providers. This is between 500.00 Euro and 3.000,00 Euro. New customers have to be satisfied with a maximum loan amount of 500.00 Euros. Existing customers receive a loan up to an amount of 3,000.00 Euro. This of course is different in UK, as you can find payday loans more easily. We suggest you to choose Wonga loans if you’re an UK citizen.
As a rule, banks can choose freely whether a fixed-term monthly installment or a fixed interest rate is desired. As a rule, the interest rate is much lower than, for example, an overdraft. Thus, the repayment of the loan often takes place in only one sum. The duration is between 30 and 180 days. Many banks offer additional, chargeable additional options. These include the payment in two installments or an express payment. Other companies like Kapitus offer equipment financing as one of their short-term financing options.
Advantages and disadvantages
The benefits of this loan clearly include the ease of online application and the immediate decision whether a loan is granted or rejected. The processing is quick and on the same day the money can be received by flash transfer to the account of the applicant. Likewise, bad credit is no reason for rejecting such a loan. The credit application does not affect the personal Schufa (loan calculator) score. A disadvantage is the high fees and high interest rates to be paid for additional services. Another disadvantage is the short term and the additional fees paid for express payments.
Requirements (in many European countries)
For the granting of a short loan, the applicant must have reached the age of 18. Another requirement is a regular monthly income of 600.00 Euros. Short-term loans are also provided by some providers to students and trainees. If the insolvency proceedings have been applied for or an affidavit has been made, it is impossible to obtain such a loan. The same applies if a garnishment or arrest warrant has been issued. The permit is also hopeless for the unemployed or people without a regular income.
When do you get a short loan?
As a rule, the term short credit does not exist. In general usage, a short loan is usually referred to as a loan taken for a short period of time. Once you have decided to take the so-called short loan, an application must be made with a bank. This checks the creditworthiness or the appropriateness of the customer. Have previous loans always been repaid? What is the income? Is income sufficient to earn a living while borrowing? Are other loans currently accepted? These are questions that have to be answered in the first place when borrowing. The accumulated assets also play a role. In the same way, attention is paid to the employment of the customer. Are the job and thus the income secured to ensure a smooth repayment of the loan amount? Once all questions have been answered in the affirmative, there is nothing in the way of borrowing. In principle, any type of loan can be taken as a short loan.