If the bank rejects the request for a microcredit because of a negative entry in the credit bureau file of the interested consumer, there is the possibility of receiving a so-called credit bureau-free loan via the Internet. However, these small loan offers should always be viewed with caution: the application contains the same information as for a higher loan amount. The customer receives the advance credit decision immediately and only has to send the application and the necessary documents to the bank. At the same time, however, you do not always need an expansive installment loan, which must be taken over a longer period of time and at high interest expense.
Small lender in Austria
Not all purchases need to be several thousands of USD. Then a cheap micro-credit can take over the promotion! It is important for borrowers to borrow as cheaply as possible. The decisive factor here is the loan amount. The loan term is shorter, the lower it is.
For the banks, small amounts also mean a relatively low default risk. This lowers interest rates on loans – both in absolute and relative terms. A small bond is just that: a loan with a small loan amount. This makes the type of loan extremely economical and at the same time enables the financing of important purchases.
And what is a small loan? There is no statutory provision for microcredit. In practice, however, these installment loans will be referred to as small loans with loan amounts between USD 100 and USD 10,000. In most cases, however, the loan amount is more at the bottom end of this scale. The most common loan amounts are between 500 and 2,500 USD.
As a rule, up to 84 months are possible, the term is always based on the individual agreement with the house bank. Interestingly enough, well over 60% of all loans granted in Austria are microloans. Only a small part of the funds will be used for larger projects such as real estate financing or car buying.
Small loans should not be confused with microcredit.
The only thing that both types of loans have in common is that they have small amounts of credit. Small farmers or other craftsmen receive the loans from the federal government or from foreign associations, and in some cases also from companies, to raise significant investment projects. Is it possible to take out a small loan at any house bank? Many banks grant only from 5,000 or even 10,000 USD.
A value below USD 1,000 is only possible with very few banks, as the internal consumption usually does not stand for it. Because: If a financial institution grants a loan, fixed costs. Economically, they only pay off if the amount of the absolute loan amounts to at least a few thousand USD. Finally, the house bank must open a credit account, manage the credit itself, pay off potential consultants.
The fixed costs are usually lower for direct banks than for the branches. Properly cheap microcredit providers are therefore almost exclusively available on the internet, in particular BuyNe. There are also service providers who are really on mini and micro loans.
Microcredits can be easily and quickly awarded. The amount of the loan is of course limited. This type of loan is therefore used primarily for the following financing operations: A rescheduling of the current account credit can quickly lead to an overdraft of their own account. For the use of the current account credit, the banks demand between 7 and 14% interest.
It definitely pays off to take out a cheap micro-loan here. Especially the vehicle is too significant to save on repair costs. Consumer goods Of course, consumer durables can of course also be co-financed with small loans. The loan must ultimately be repaid. Is the small loan business really cheap?
Direct bank loans are usually cheaper than conventional bank loans or current account borrowing. This applies in particular to such financing, the sum of which does not exceed the 1,000 USD mark. However, the annual percentage of the fee is usually larger, depending on your creditworthiness. If the loan amount increases, the term of the loan is usually extended as well.
The effective interest rate then drops, but the loan itself will of course be higher. Because the interest on the plant is over several years. However, in absolute terms, small loan expenditure is still significantly lower than other types of credit. What are the conditions for the loan? It is also pleasing that the credit conditions for micro-credit are very low.
Even if the income is slightly above the deposit limit, borrowing is no obstacle. The only important thing is that no negative entries can be found in the MLM information. Otherwise, many credit institutions will reject the loan application on a broad front. The necessary deposit for the lending business is guaranteed exclusively by the income.
Since the loan amount is so low, the borrowers do not have to bring in any further security features such as a mortgage. For the income relationship, it is important that the borrower is in a fixed position or with a pension above the pledge limit. For the self-employed and self-employed it is much more difficult to have a small loan.
The pledge of other securities, such as life insurance or the use of a guarantor, are also means to realize the lending business. Online loan application procedure – how it works! Borrowers examine the offers and select the most favorable banks for the appropriate trade credit. You will find an application form on the home page of the house bank where you can apply for the loan offer.
As a rule, banks only need a small amount of personal data for lending. The bank checks the loan application and your creditworthiness. If the application is accepted, it makes a binding bid and sends a loan agreement. The house bank may have further questions to ask you during the loan application process and will contact you.
This loan agreement can now be rejected or accepted by the borrowers. However, if the borrower decides to sign the loan agreement, it must nevertheless be legitimized. Of course, for small loans, as an applicant, you also need to submit a few documents before the loan can be finalized. They are not required to prove their own income and are therefore of minor importance to the banks.
As a rule, upon presentation of the proof of residence, the current registration certificates or declarations of the energy suppliers of the past three months are required. For some credit institutions, it is important that the driver’s license is not recognized as a valid badge. Rent purchase is a good way to small loans? Small loans are often used to finance consumer goods. Especially in the pre-Christmas period, but also in the course of the year, the consumer buys television, jewels and smartphones with credit.
But is this really a great way to start small loans? The effective interest rates are mentioned only in small print, but are usually larger than small loans. According to a study by the Vienna Chamber of Commerce, the big department stores can settle rent purchase with a return of between 7 and 15 percentage points per year. 1.65 percentage points per month have little effect, but make an impressive 21.7 percentage points per year.
In addition, consumers often do not pay enough attention to the actual cost price when buying in installments.