Small loan comparison: who can take one in and where can you get it?

A large proportion of consumers in Germany today use smaller forms of loan. This includes small loans , which can be applied for very easily and are much more manageable than larger installment loans. This has the advantage that you can be paid out very quickly. One speaks here also of a small loan with immediate disbursement or mini loans. You can find out exactly what a small loan is and what you need to know in the following.

Editor’s tip: If the loan amount is at least USD 500, online credit brokers such as Best Bank are more worthwhile than mini loans. You have to pay back the money in smaller installments and from 12 monthly installments – with mini loans, the money must be paid back within 30 days, otherwise there are expensive late fees! Best Bank also pays small loans within 24 hours for Credit bureau entries!

What is a small loan?

What is a small loan?

There is no exact definition for small loans. Especially since there are other distinctions for this term, which we will discuss later. Basically, a loan of a maximum of 10,000 USD is referred to as a small loan. Occasionally, an upper limit of 5,000 USD is also given. In any case, it is a loan with a lower loan amount, which is treated like a normal installment loan.

Small loans are now becoming increasingly popular. According to a study by Credit bureau from 2013, only around 30% of all loans are over 10,000 USD. So the need for smaller loans is increasing. However, small loans are not granted by all banks. Such small sums often do not pay off for the bank due to the resulting fixed costs.

While small loans are capped, the minimum amounts paid out are fairly open. However, a distinction is made here in terms. If a small loan has a loan amount of $ 1,500 or less, it is usually referred to as a mini loan. These behave somewhat differently from the conditions.

What are the differences in small loans?

What are the differences in small loans?

As I said, whether the loan is a regular small loan or a mini loan depends on the loan amount. Mini loans are paid up to a maximum of 1500 USD. Anything above that is a common small loan as long as the loan amount is not more than 10,000 USD.

There is a very clear difference in the term. A small loan is just a normal installment loan. Usual terms here are between 12 and 36 months. A mini loan, on the other hand, is considered to be a bridge to the next salary entry. Accordingly, the terms are usually 15 or 30 days.

Small loans then differ in terms of interest or costs in general. Small loans below 1500 USD usually have significantly higher interest rates, which can well be in the double-digit range. Due to the very short runtime, these are not so clearly noticeable. With a small loan with a longer term, the interest rate is at a common level for installment loans. The cost of mini loans mainly arises with the additional services. Immediate next day payment or a 2-installment option are offered for an additional fee, which can make such a small loan very expensive.

When is which small loan suitable?

When is which small loan suitable?

Based on the different conditions, the various small loans are sometimes more and sometimes less useful. A normal small loan is suitable, for example, for medium-sized purchases, such as expensive electronic items. But always compare the possible offers. In some cases, a hire purchase can also be a cheap option. The small loan can also be used for debt rescheduling, for example to compensate for the credit facility used or to replace other loans.

The mini loan, however, is suitable for short-term financial bottlenecks. You should not use this small loan to purchase consumer goods. This does not pay off in terms of the conditions or a corresponding consumer loan is much more sensible in this case. Mini loans are intended for when money should run out at the end of the month or an unforeseen bill goes into the house, as well as for short-term repairs.

Who grants a small loan?

Who grants a small loan?

There are now numerous providers for small loans. There are slight differences depending on what you want exactly and how high the loan amount should be. You can get an ordinary small loan in installments from many larger banks, for example from Good lenders. There are also special providers for mini loans that specialize purely in this loan offer. At other banks, you are unlikely to receive such low loans, at least not on these terms. The best-known providers of mini loans are Good credit company, Fine Bank and Instant Care Bank.

Editor’s tip: If the loan amount is at least USD 500, online credit brokers such as Best Bank are more worthwhile than mini loans. You have to pay back the money in smaller installments and from 12 monthly installments – with mini loans, the money must be paid back within 30 days, otherwise there are expensive late fees! Best Bank also pays small loans within 24 hours for Credit bureau entries!

Instead of going directly to the bank, you can also get a small loan through a credit intermediary such as Cream Bank or Best bank. They have cooperations with various banks and, based on your financial situation, look for a suitable loan offer for you. A small loan can also be financed by private individuals. There are also credit marketplaces like Best Bank or Agree Bank. Here you describe your loan request, and when enough private investors have been found, the loan will be paid out to you.

Is there a small loan without Credit bureau?

Is there a small loan without Credit bureau?

When lending, German providers are legally obliged to check your credit rating. This is usually done with the help of Credit bureau, so as long as you obtain a loan from a German bank, regardless of which provider, Credit bureau will always be checked. Weak negative characteristics do not automatically lead to rejection. With such small amounts, some are overlooked. For example, this is the case with some providers of mini loans.

However, it is more common for small loans that the taking up of such a loan is not reported to Credit bureau. You can therefore obtain the Credit bureau-neutral small loan without it having any influence on subsequent loans, for example. Mini loans or small loans from private to private are usually not entered in the Credit bureau.

If you really want to have a small loan without Credit bureau check and registration, then you need to contact a credit broker. This then mediates to a bank located abroad, such as in Switzerland or Liechtenstein. Credit bureau is irrelevant to banks based there. Your creditworthiness is assessed in another way. Here, the evaluation criteria, for example in relation to your income, can be much tougher than for loans with a Credit bureau examination.

What are the requirements for a small loan?

The requirements for a small loan are much lower than for a larger loan. Above all, less collateral is required from the bank. The basic conditions are:

  • Minimum age of 18 years
  • A permanent and permanent residence in Germany
  • A regular income

Income is particularly important here, since in most cases it is the main security for small loans. Depending on which form of small loan you apply for, the amount of the minimum income required will be higher or lower. In the case of a small loan through a credit broker, an average of $ 1130 per month is required; with a mini loan, $ 700 is often sufficient.

Even if some providers overlook weak negative entries in the Credit bureau, you should not be able to show any hard features. This includes, for example, private bankruptcy, an affidavit or a garnishment of wages. In such cases, no provider will grant you a loan. Even small loans without Credit bureau are then not possible.

Who gets a small loan?

Who gets a small loan?

As a permanent employee, you always have a very good chance of getting a small loan. As long as your income is within the required range and you have no hard negative characteristics in the Credit bureau, nothing stands in the way of the loan. For many banks, assignment of salary is sufficient as additional security. With a mini loan, this is even eliminated.

Mini-loans are very easy to obtain for the self-employed and freelancers. When it comes to loans, banks always have a hard time with this group of people. Nevertheless, a normal small loan on installments for the self-employed is also possible. Since assignment of salary is not possible, the assignment of life insurance is used as security, for example.

It will be a little more difficult for the unemployed. A small loan without income is not easy to obtain. If in doubt, this is only possible with the help of a guarantor. Offers that advertise unemployed people with a small loan should be viewed with skepticism.

Small loans for students and trainees are also possible as long as you have a corresponding income. A small loan for pensioners can also be applied for in some cases. Credit intermediaries such as receipt credit have no limit on the maximum age. Elsewhere, however, a co-applicant or guarantor is recommended if you want to get a small loan as a pensioner.

Do I get a small loan with a fast payout?

That all depends. Many of the offers for small loans are applied for online. This speeds up some processes when applying, which is why a small loan with an immediate approval is not uncommon. However, this does not mean that the small loan is transferred to the account immediately . It can take a few working days for an application to be fully processed and the money paid out.

You will only receive a small loan with immediate payment if the provider enables a fully digital contract. This makes it possible for you to complete the loan online. You can find out from which providers you get a quick loan in our small loan comparison above.

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