Such a loan offers numerous advantages, since these are relatively small sums of money. Small credit is often used to bridge financial bottlenecks or to buy something. People who opt for such a loan, have acted reasonably, since it is much cheaper to take a small loan than to overdraw his current account. An overdraft on account of the high interest rates causes considerable costs and is actually intended only for emergencies or for short-term use.
Cheap microcredit through credit comparison
As there are numerous small credit providers, finding the best one is not always easy. Especially if you do this project at various banks on the ground, because it costs time and nerves. Also not to forget the resulting costs when this action is performed by car.
Of course, it is also possible to make such a credit comparison by telephone. However, this method also costs and takes time.
Best option to conduct credit comparison online
The fastest and easiest way to do this is to make a comparison on the internet. In this regard, there are numerous service providers who provide their services here free of charge and without obligation.
The interested party only has to access one of the numerous comparison portals.
On this, the matter is settled in a few minutes and you can find out which provider is eligible for small loan.
Using a so-called comparison calculator, one learns which provider of microcredit offers the lowest interest rates and best terms.
Term and annual interest for small loan
Loans of less than 1000 € are given on different terms than for loans with several 1000 €. Since a mini-loan is usually needed only in the short term, for example, to survive a financial shortage, the terms are therefore also correspondingly shorter than for normal loans.
Many of the so-called small loans therefore have a term of one to three months. If longer terms are desired, this usually results in additional fees.
The annual rate of interest on small loans is almost always higher than that of traditional consumer and consumer loans. But since the interest is only incurred for a short time, the total cost is relatively low.
For consumer loans over € 1000 the average duration is twelve months. With individual offerers it is even possible to agree on a term of up to ten years. The rule is that the longer the term, the lower the monthly rate. If a higher loan installment is agreed, it will be paid off more quickly and the total cost will be much lower.
Requirements for borrowing small loans
The legal bases for a loan of this kind are the same as for larger loans. The application or applicants must be of legal age, have a permanent residence in Germany, have a regular income and a negative private credit entry should also be absent.
In the case of a microcredit, however, a so-called private credit information is not absolutely necessary, while the other three conditions apply to each credit.
Certain banks have specialized in so-called small loans, these also take customers to ordinary banks have no luck. In addition to the low credit sums and short maturities, they minimize their risks primarily by the fact that liquid customers can lend higher sums than the so-called new customers.
Thus, borrowers can prove their solvency directly. Borrowing is then no longer a major problem.
What collateral is possible
For employees, a salary assignment is required as collateral for the microcredit. For this proof of income of the last three months are needed, the applicant may usually not be in the probationary period. Retirees normally have a valid pension notice.
It’s not that easy for the self-employed or freelancers, who often have to resort to other collateral, including the ceding of a life insurance policy.
Low earners are not easily awarded a microcredit, but can specify a second borrower in the application. This gives the bank or lender greater assurance that the loan can be properly repaid. In addition, two borrowers are often given more lucrative interest rates.
Apply for small loan
Small loans can be requested online at any bank, or simply from home. When applying for the same information is required as a higher loan amount. Online customers receive the preliminary decision immediately and only have to send the completed application and the required documents to the bank, this is usually done by mail. This is followed by a so-called identification check and an examination of all documents by the lender. If everything is alright, a transfer of the approved loan amount to the account specified by the borrower usually takes place.
The same procedure is also carried out at a local bank, but the identification check is faster here. A valid identity card or passport as well as a pay slip are usually sufficient here (some banks require payroll accounting for the last three months).
Conclusion: A small loan is in any case preferable to an overdraft. This is mainly due to the much lower interest rates that are valid for a small loan. Over a period of a few months, this can amount to several hundred euros more. In addition, small loans usually have only a short term and monthly small installments anyway. Quite different with the so-called collection-credit, here are almost always over 10% interest charged. This can be very expensive over a long period of time, so it all comes down to a loan anyway.
A small loan is also appropriate when different bills are open at various mail order companies or stores. Here it often happens that those affected quickly lose the overview and the payments fall into oblivion. The consequence thereof, dunning notices plus dunning costs. Again, a small loan is often the ideal way out of this rather confusing situation.
The easiest way to make a small loan at the house bank. If you have been a customer here for a long time, then there is a certain relationship of trust between the bank and the customer. Here it is usually sufficient to complete an application form, to submit the application, the rest is a formality that is usually done quickly by the bank. In this case, the bank also likes to waive a private credit information, this is especially true if a regular cash receipt takes place and the account is not constantly in the target.
This matter at the house bank is usually completed within a few days and the money is then in the customer’s account