Installment loan, consumer payday loan,”no matter what” – loan, small credit or even short-term loan and etc., lenders often use their own names in terms of their loan offers. In practice, it is often difficult to distinguish between small loans and mini-loans. These terms are not legally protected. In addition, there is no stipulation up to which amount of credit the respective terms may apply. Nevertheless, the concept of micro-credit and mini-credit differ significantly from each other. With the following guide we would like to explain the differences between the two types of credit.
Micro-credit as a General term
The concept of micro-credit is relatively common in practice. In general, these are loans, the amount of which is in the manageable range. While, for example, several hundred thousand dollars are issued as loans within the framework of real estate financing, this does not apply to small loans. Their credit amount is usually limited to 10,000 dollars, whereby such a credit is often possible from a sum of 1,000 dollars. However, each credit institution shall determine the exact minimum or maximum amounts independently.
Due to their relatively small amount of credit, small loans are often provided by credit institutions rather uncomplicated. Most institutions offer their small loans mainly for consumption purposes. This is why consumer credit is often referred to as consumer credit, which is ultimately nothing more than a small credit.
Regardless of its exact name, the small loan is offered by numerous banks and savings banks. For this reason, we recommend a thorough loan comparison, which filters out the best online payday loan offers.
The following documents are required to apply for a small loan:
– Proof of income (current; Mostly last two or three months)
– Proof of identity (e.g. ID card, passport with registration confirmation)
– positive credit score (if credit institutions are used for credit assessment)
New Product: Mini Loans
The mini-loan is usually advertised as an independent product and is characterized by an extremely small loan amount. This is usually a sum of up to 1,000 dollars, so that the minimum loan in most cases only has a three-digit loan sum. In fact, the mini-loan fills a gap that classic credit institutions in the past often did not close with their small loans in the amount of at least 1,000 euros. As a result, there are now several providers who have specialised in the provision of mini-loans. Due to the significantly lower amount of credit compared to the small loan, the maturity of the mini loan is correspondingly shorter. This also makes a significant difference between these types of loans. While the small loan is usually paid in instalments over at least 12 monthly instalments, the mini loan in practice allows significantly shorter maturities. The terms range from 7 to a maximum of 60 days – depending on the lender. For this reason, the mini-loan is also advertised as a so-called Short-Term Loan.
There are some situations in which one can help the completion of a mini credit. For example, the borrowing of such a loan is particularly suitable for bridging short-term financial bottlenecks. At least if their size is not too pronounced. In this case, the mini-loan may also be a financially worthwhile Alternative to the classic overdraft facility. At least it is worth a thorough loan comparison.