What are mini loans and when to apply for them

Nowadays, many people or families face a long period of economic crisis and do not always manage to make ends meet. More and more people find themselves without a permanent job that allows them to have a solid and decent monthly income and in many cases they are forced to apply for a small loan.

In order to obtain small loans, it is important that we know all their characteristics , starting with the requirements and how we can receive them without the need for payroll. What is a mini loan?

If we are in need of some type of financing, banks and financial institutions offer a large number of proposals to obtain them. On the internet, we will also find many interesting solutions according to the needs of each one, among which the mini loans stand out, which are aimed at an increasingly numerous clientele .

It is a financing option that allows us to have access to a relatively small amount of money . You might think that for this reason they are not very useful, however, the frequency of applications for mini loans in Spain is increasing, and it has become the ideal solution for all those who need a small amount of money to cover an expense unexpected.

This is the case, for example, of dental expenses or other medical problems, but also of the mechanic's expenses after a breakdown of our car. We can also choose the mini loan if we want to make a trip for which we do not have all the money available immediately and therefore we prefer to pay in installments.

This procedure is about unfinished financing, perfect for needs of various kinds, coupled with the fact that a cost is not too high. When we talk about mini loans, normally the amount of money that we can request ranges from a loan of 500 euros to a maximum of 1,500 euros , although in some cases the maximum threshold is higher and reaches up to 3,000 euros.

What are mini loans and when to apply for them
What are mini loans and when to apply for them

Characteristic of minimum loans

The main characteristic of mini loans is precisely the amount of money that we can disburse. Various advantages derive from this characteristic, which have certainly favored diffusion.

For a credit institution the disbursement of the mini loan is a minimal risk . This lower risk translates into an easier grant of financing. It does not mean that the mini loan is granted to anyone without distinction, but there are certainly fewer restrictions than financing larger amounts of money.

For this reason, even those who are not working and therefore do not have a payroll, have the opportunity to receive a small loan in which they are interested .

The mini loan is, in fact, the fastest financing in history , since in many cases it provides an immediate disbursement. For this reason, it is the ideal solution for those who have to face an unexpected expense for which a loan of 1000 euros may be enough.

Mini loan without payroll and without guarantees: how to apply

One of the advantages of the fact that the amount of money that we are going to ask is quite low, is that fewer restrictions imposed by the banks are needed . In this sense, we very often talk about mini unsecured loans, but is this really possible?

Of course, there is no credit institution willing to provide financing without first providing any collateral, simply because it would be too high an unjustified risk for the company. For this reason, although minimal, these online entities have to request some kind of proof that certifies that the money can be returned.

The guarantees to which we refer about mini loans, as well as other forms of financing, are real estate, which are based on owning a property, or the presentation of a guarantor , that is, a person who in our place take care of the monthly installments that we have not paid.

If we have the opportunity to demonstrate to the bank that we have a guaranteed monthly income, which can be a salary or a pension, then we can have access to financing even without having other additional guarantees . As for mini loans without payroll, the main companies offer the possibility of requesting them online without too many problems.

In particular, this form of loan is aimed at the self-employed. However, if we belong to this category of applicants, it is not always possible to receive financing without a paycheck, but in this case we are offered an excellent opportunity.

If we are self-employed, we can receive the small loan that we need even without guarantees , presenting the last income statement. It should be noted that in some cases, this option is also available for personal loans of higher sums of money.

However, problems can arise at the time of application, as the income of a self-employed worker is not as constant over time as that of an employee and, therefore, if the request is too high, it may not be accept . If this is your case, we recommend you see our guide to loans for freelancers where we explain all the alternatives that this group has, with their advantages and disadvantages in hiring loans.

This type of problem does not usually arise in the case of mini loans, since the monthly payments are very low, even those who do not have a particularly high income will be entitled to receive the desired financing . For the unemployed who are looking for work and are interested in a mini loan without salary, the situation will obviously be more complicated in this case.

How to apply for a fast disbursement online mini loan: the best financing

Applying for this financing is very simple and most companies offer us the opportunity to do it directly online. This means that we can make the request simply by entering our bank's page and accessing it through our credentials.

At this point we will have the possibility of comparing different solutions thanks to free simulators, which will allow us to calculate the repayment fee and the interest rates of each loan based on the amount that we have entered and the duration chosen for our financing.

Once the ideal financing option has been chosen according to our needs, we can proceed immediately with the application for the mini loan that interests us . Taking into account that the amount of money is relatively low, in many cases the disbursement will be immediate, and therefore the money that we will need will be immediately available in our checking account.

Quick disbursement is definitely one of the strengths of mini loans. Another service offered by several credit institutions and that further streamlines the way we request, is through the Apps that can be downloaded on both smartphones and tablets .

In this way we will have the opportunity to manage our account wherever we are, and in the same way submit the financing request with a simple touch on the screen.

What should we take into account when applying for a loan?

When trying to apply for a loan, it is good to take into account several factors:

We must carefully evaluate all available offers, without dwelling on the first one we find and on its contractual conditions. Both interest rates and additional costs can vary greatly from one institution to another , and if we do not want to have bad surprises it is better that we take a little more time to consider all the options.

Never request liquidity

Because the purpose is generic and we could go to pay debts related to other open credit positions with other financial institutions. For this reason, banks, feeling exposed to greater risk, tend to apply much higher interest rates to these types of loans .

Always specify the purpose

Banks and financial institutions package ad hoc products depending on whether the loan finances one project or another. If we already have one or more open loans, we must request the “consolidation” purpose , a form of customer loyalty that refers to a single interlocutor, often with a repayment installment that is easier to manage.

Consolidation can be a solution that meets the needs of families and those who have more than one open line of credit, perhaps without being fully aware of it. We are talking, for example, of some mini-loans such as the one that opens with the purchase of a mobile phone in installments or an appliance.

By merging or redefining the debt with a single entity, we can benefit from a delay in the time of payment and a reduction in the number of individual payments .

Attention to the profile

Before each transfer, we must know that the bank or financial institution evaluates the risk profile of the person and the applicant's history, that is. Our financial history in the event of insolvency or weakness, which will increase the risk factor and lead to a denial of financing or higher rates.

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