Mini loan or overdraft facility? Which loan is better?

Interest rates are low, and short-term expenses are higher than expected because the washing machine has given up its ghost or Christmas and the gift purchase is just around the corner.

How quickly did you overdraw your account?

How quickly did you overdraw your account?

If the bank has set up an overdraft facility, that’s no problem at first.  Finally, the loan is available relatively quickly and just as easily. Just go to the nearest ATM, enter the desired amount and the credit is available! And the whole thing completely detached from any opening times of the bank. Another advantage: no lengthy discussions with the bank advisor, no submission of any documents or a long explanation of why you need a loan right now. The overdraft facility sounds like the non-plus-ultra – right?

But what if the bank changes its mind and quits? Or is it simply realized that the overdraft facility is too expensive? What would be an alternative to the current overdraft facility? Wouldn’t a mini loan for unexpected or temporarily higher expenses than usual be better? Questions we want to get to the bottom of.

Why a mini loan is better than an overdraft facility

Why a mini loan is better than an overdraft facility

The advantages of a mini loan start with interest. With a mini loan, you benefit from a permanently fixed interest rate. Where, however, the overdraft facility can become expensive due to its generally high interest rate and the risk of a short-term adjustment of the interest rate to the market. The timed repayment of the mini loan also ensures that you can really get out of the temporary lack of liquidity and not nestle in it. The bank can also simply shorten or terminate a overdraft facility in the event of permanent non-repayment or lower cash receipts. A situation that then leads to the next problem: either pay everything at once or reschedule.

This risk can be avoided from the outset with a mini loan and its specified credit terms. Approving a mini loan is quick and easy. Why the loan applied for usually arrives in your own account within two to three working days. Without using any additional options that are subject to a fee. Especially in times when interest rates are very customer-friendly, mini-loans also offer the advantage that interest rates remain the same throughout the term. The overdraft rate, on the other hand, fluctuates and is also sometimes significantly higher than the average interest rate for a mini loan, which also affects the amount to be repaid.

 

What to look out for with mini credit

What to look out for with mini credit

Because of their profitability, mini-loans are often given primarily by direct banks and financial institutions specializing in this type of loan, less often by traditional branch banks. Therefore, when applying for a mini loan, you should pay attention not only to the interest rate, but also to the rate amount and the term length. In addition, providers should be preferred who have a corresponding banking license and are therefore allowed to carry out the credit business in Germany. If the money is needed particularly urgently, you should check whether an instant payment, a so-called lightning loan, is offered.

But also here applies: Check the loan offer for hidden costs and think carefully whether you can not wait a day longer for the borrowed money. Some providers of mini loans still secure themselves through Credit Bureau, despite their speed and unbureaucratic allocation. This can also play a role in the approval. Basically, it should be borne in mind that the lower the loan, the faster the processing time. The terms are also significantly shorter.

When the mini loan is worth it

Above all, it is of course always better to be able to access reserves in order to avoid debts in general. If you have no reserves and need a little financial injection, you can get a mini loan quickly and easily. Taking out a mini loan is particularly worthwhile if short-term liquidity problems are to be solved easily and without long-term commitment.

The online credit: affordable and quickly available.

The reasons to take out a loan these days are often very simple. In the household there is a large purchase to be made, a new car should be financed cheaply or a long-awaited vacation trip should finally be put into practice. While the reasons for taking out a loan are often quite simple and, above all, easy to understand, it is unfortunately not always the right loan offer.

The offer becomes clear and understandable with the online loan

The offer becomes clear and understandable with the online loan

Thanks to the Internet, it has become increasingly clear in the recent past that it is anything but cumbersome and difficult to apply for and subsequently obtain a loan. This applies at least if this is a classic consumer loan. A loan where the loan amount is quite manageable and the loan installments are repaid in a relatively short time.

Individuals who are looking for a loan that is in the four or low five-digit range and can be repaid within five or a maximum of seven years can find numerous loan offers today. But online loans in particular often have significantly better terms than, for example, the classic installment loan from your own bank.

The reason for this is that the entire credit process, such as application, credit check, loan processing and credit approval, is implemented online and is therefore extremely cost-effective. Thanks to the automation of an online loan offer, the structural costs saved in the installment loan offer become a customer benefit. Because the sums saved in comparison to the costs of a traditional bank are subsequently passed on to potential credit customers as part of improved (cheaper) loan terms.

High acceptance of the online loan

High acceptance of the online loan

It is therefore not surprising that in Germany more and more, also thanks to a steadily increasing acceptance on the part of consumers of corresponding loans, are being granted online to prospective customers.

But especially with one, due to a variety of corresponding online loan offers, the market is rather confusing. In addition, the market constantly updates itself due to constantly changing offers. Difficult to keep an overview under such conditions. Before you start looking for a cheap online loan, there should be a basic consideration in the first place. What you actually need when you plan to take out an online loan.

In addition to the criteria of the loan amount, the term and the expected interest burden, it is of particular importance for a large number of those interested in credit that the selection of the “suitable” loan is an online loan with an immediate approval because it is usually the expectation that you will find out immediately whether the loan is approved or not.

This is what to look out for with an online loan!

This is what to look out for with an online loan!

When choosing the right loan, the loan amount, the payment amount, the monthly installments, the term and the options for repayment are particularly important. For example, you should make sure that the amount paid out for an online loan also corresponds to the loan amount. It is not uncommon for two percent of the loan amount to be charged as fees, for example. In addition, the amount of the monthly installments and the term are relevant. Because this information is often more meaningful than the amount of the pure interest rate.

Any fees should also be visible in the installments. And when it comes to repayment options, you should pay attention to whether, for example, special repayments are possible without a surcharge. If you take these parameters into account when choosing the right loan, you will quickly find what you are looking for when choosing a loan with an immediate approval.

There is now a large number of individually fitting online loans from renowned providers. It is therefore always advisable to use a specialized credit comparison portal when choosing an appropriate online loan offer. By giving a few, but relevant, information, consumers get a first overview. In this way, the total of all possible providers can be limited based on your own assessment.

A private equity loan can help you.

Getting money fast is an emergency for many people and families who need liquidity in these days where the loan is so difficult to get, sometimes expenses arise that must be met in the shortest possible time, so a contribution of money is essential to be able to make ends meet and deal with invoices, unforeseen payments, etc. fast credit to get urgent money is a good alternative, it allows many users to get the money they need.

Take a private company that offers quick loan.

Take a private company that offers quick loan.

To get fast money it is better to go to a private lender company since private credit allows you to obtain a line of financing without having to meet as many requirements as the bank asks, specifically, our private equity company provides its clients with fast loans with the only guarantee of a property that can be of the real estate type or of any other class. The meaning of this is very simple; our users can guarantee their loans with real estate, vehicles, art collections, etc. Any property that has the value to get the urgent amount of money they need, the only exception is jewelry.

Provide a guarantee

Provide a guarantee

That is, if a client needs money, we can give him the loan as long as he provides us with a guarantee whose value is sufficient to obtain the amount he asks for, in such a way that our clients can get up to 20% of the value of appraisal of said property, which can be real property or any other valuable object. The quality of these guarantees is the most important point to get the necessary money.

In addition to this, there is another option, we give money in exchange for the customer’s vehicle, that is, we appraise the user’s car and subsequently provide him with an amount that can reach up to 30% or 40% of the appraised value. It is a formula that we apply in the same way to motorcycles, trucks, vans, etc.

Perhaps the most interesting thing about our fast loans is the speed with which the transactions are processed, since our team of professionals always tries to take care of as many procedures as possible, this makes the procedures go faster and the client has the possibility of obtaining this credit in a very short period of time, approximately 72 hours.

Other advantages also include the fact that it is not necessary to have a stable job and have a payroll, nor does it matter if you have had previous debts or appear on a list of defaulters such as Financial Credit Institutions; it is the guarantee that allows us to give you the money you need.

Conditions to meet real state guarantees

Conditions to meet real state guarantees

As for real estate guarantees, it is very important to keep in mind that they must meet an indispensable condition, they must be totally free of charges and mortgages to be valid and we accept flats, houses, premises, etc. plots, plots of land are not valid.

As real estate and financial experts that we are, we can carry out free studies of each of the operations and we never charge anything in advance, we also carry out the official appraisal of the home and process it at a very low cost for the user, the client must feel totally safe since it is completely legal and always signed before a notary. Furthermore, our operations are regulated by the Ministry of Health and Consumption and we comply with the existing regulations regarding private loans and financial services. A private equity loan can help you Rate this page

What is a pledged loan guarantee?

Probably if you have ever applied for a loan you have found yourself faced with the need to present certain guarantees to the lender. No doubt you have heard of guarantees and mortgage guarantees, but the pledged guarantee may not sound so much to you.

The pledged guarantee of a loan

The pledged guarantee of a loan

When we speak of pledged collateral we do so to refer to that in which the client uses a financial asset as collateral. Whether it is your participation in a deposit or fund or even stocks. This type of guarantee has the advantage of not having to leave a property as collateral for the loan. In this way, in case of not being able to meet the agreed payments, the house will not be lost but a financial asset.

Requirements to use a financial asset as a pledged guarantee of a loan

Requirements to use a financial asset as a pledged guarantee of a loan

In order to use a financial asset as a pledged guarantee it is necessary that it can be liquidated without problems if necessary. Hence, we can use shares, investment funds or deposits for this purpose. These guarantees are born as a guarantee capable of replacing the classic mortgage guarantee in which it is necessary to have a property.

For the financial asset to function as collateral, it must be disabled throughout the repayment period of the loan. In other words, we will not be able to sell it or change it if we find ourselves in an interesting situation. However, using a financial asset to pledge a loan does not prevent us from continuing to obtain profitability from said asset.

The amount that the financial institution offers the customer as a loan will be directly linked to the value of the financial asset that is used as collateral. And also to its possible fluctuation.

Advantages and disadvantages of a pledged loan guarantee

Advantages and disadvantages of a pledged loan guarantee

This financial product, like any other type of guarantee, has both its pros and its cons. Let’s see what they are below.

Advantage

  • Lower formalization costs. In general, this type of loan is characterized by lower costs when formalizing it.
  • Good credit conditions. It is common for financial institutions to offer loans with better interests and more attractive terms if a pledged guarantee is used.
  • We will not fall into decapitalization. Unlike what can happen if we contract a loan whose guarantee is a home. It is true that we cannot do anything with the investment product that we have used as a guarantee. But this does not prevent us from continuing to collect the benefits it generates.

Disadvantages

  • Hard to find. Very few credit institutions offer the customer the opportunity to use this type of guarantee.
  • We cannot operate with our financial assets. Until the loan has been amortized, the assets used as collateral will remain on standby. In addition, they must be deposited in the entity that offers us the loan.

The installment loan: when does admission make sense and when does it not?

How times change! While it was not too long ago to take out an installment loan and get into debt, the topic of credit is now a good thing. There is nothing left with negative comments or an incredulous, critical “shake your head” when you speak openly about credit. Without a doubt: The installment loan has significantly improved its reputation in recent years.

There is hardly a product that cannot be financed cheaply – be it the smartphone, the food processor, the vacation, or traditionally just the car or the longingly desired home. Life is really easy. Taking out and using a loan is just as easy today as going “shopping”. Only sometimes should you ask yourself whether taking out an installment loan really makes sense – right?

Taking out an installment loan means assuming financial responsibility

Taking out an installment loan means assuming financial responsibility

There is no question that everyone wants to fulfill certain wishes somewhere or to strike at a particularly cheap bargain. Even if your own funds are not sufficient for the purchase. So a loan is needed to satisfy the need to “want”. But does that have to be? Does an installment loan really make sense? And the question of meaning has its justification, because many people are often not sure whether it makes sense in an individual situation to take out a loan or not. Admittedly – in principle, every adult should be able to estimate when it is necessary to take out a loan. But if that were the case in full, a not inconsiderable part of the population would not be in debt.

Installment loan only for really important purchases

Installment loan only for really important purchases

So again the question: When does an installment loan actually make sense? But making a general statement on this question would be a mistake. Because each installment of an installment loan is based on an individual need and so each individual case must be viewed in exactly the same way. Basically, however, the following applies: If something is to be purchased using an installment loan, then it should, or rather must, be a really important purchase. Conversely, borrowing makes a lot less sense for a product that you would like to have but that is not absolutely necessary.

Other ways to borrow

Other ways to borrow

As a rule of thumb, only durable, value-stable products justify taking out an installment loan. Classic examples are certainly a new motor vehicle, motorcycle or high-quality furnishings. This can also apply to technical devices to a limited extent. However, it should be borne in mind here that technical progress is now progressing very quickly and the loss in value of those devices is therefore very high. In such a case, it is advisable to choose a shorter loan term than the expected service life of the device. A cheap loan can also be used very well to replace existing, more expensive loans, such as the overdraft facility.