Like any other loan, a small loan with immediate payment must be repaid in monthly installments. Jump to What is a microcredit? The loan will also be repaid within a short time, by default after thirty days and at one installment. The extra cost of microcredit can even exceed the loan amount for very small amounts of credit and the choice of multiple benefits: interest rates are higher than traditional banks, but not so important for very short maturities such as contracts that run for months and years. The swift loan decision is also due to the low lending volume.
Are you looking for a micro-loan?
Are you looking for a micro-loan? We have compared the best microcredit providers. Microcredits are today understood as micro-credits for micro-loans up to an amount of 3,000 dollars. However, the term microcredit has a different dimension. In the following it will now be discussed in more detail what a micro-loan is in the strict sense.
And what is a micro-loan? The micro-loan will be used to finance self-employment and start-ups and will be supported by the ESF and KfW Bank. Freelancers, small businesses and company founders usually do not have the necessary coverage or creditworthiness to properly co-finance at the credit institutions with a favorable microcredit.
On the other hand, there is no specific concern of the banks to grant micro-credit to micro-entrepreneurs and start-ups. To finance microcredit, the fund will provide about $ 100 million to startups and small businesses for purchases, operational resources, equity investments and liquidity support. How much does microcredit cost? The current interest rate is 9.9% with a connection fee of $ 100 per loan.
For example, with a small loan of 5,000 USD, monthly payments are below 200 USD. Although these conditions are set the same, practice such as counseling practice may differ from the institutions concerned. What to look for when granting microcredit? In the first place, you should ensure that your project has a suitable microfinance provider in your area.
If the loan has been awarded successfully, you must inform your supervisor about the course of business on a monthly basis. This has the opportunity to intervene when the project gets out of hand. In some cases, the care of the microfinance provider is subject to a fee. However, it is possible that the expenses incurred will be covered by a corresponding subsidy program by the federal or state governments.
For whom is there a small loan?
Employees usually have no difficulty getting a loan. Almost every one of the banks grants loans to their employees. If you already have multiple loans or your monthly income is insufficient, the situation is different. Then your custodian bank may not approve your loan application.
Anyone who still needs a small amount, is best served with a mini loan. You must meet certain requirements, such as a minimum age of 18 years (some banks 21 years), a monthly income of at least 600 USD and your place of residence in the Federal Republic of Germany to receive a mini-credit.
In the case of bankruptcy proceedings, the presentation of a sworn statement, the seizure of wages and salaries and a warrant, the mini-loan is rejected in advance. Most of the time, a mini-loan is the only place to even have a loan. As a rule, small loans amount to $ 3,000, sometimes up to $ 5,000.
Due to the economic situation during the training, however, loan amounts of 5,000 dollars are almost unmanageable. For example, guarantees can help cut costs and increase the amount of mini-credit. Students who are under the age of majority can not apply for a small loan without further ado. Among other things, they require the consent of both parents and the family court in order to be able to claim a small loan.
Quite different is the case with students of age who, for example, have a regular job with adequate income. Then it is quite possible to get a mini loan. Even though these are given, they do not receive large sums. A mini loan is the optimal design. Due to a small amount of credit, monthly payments can usually be reimbursed by pupils and students without any problems.
Because also students and students have certain wishes, for example the driving license or directly a small vehicle. With the small loan they have the opportunity to meet these demands and not to fall into the trap with low interest rates. When is a micro-loan suitable? Microcredits are always suitable when it comes to a corporate project, eg to locate new companies, to increase (eg the warehouse) or to compensate for seasonal fluctuations.
Microcredits are granted to both legal and natural persons.
Freelancers and self-employed people have the opportunity to take out a small loan. Are microcredits possible even without the use of the new school? In the case of a microcredit, the Credit Bureau information is not necessarily the focus. Nevertheless, a Credit Bureau query is provided to protect the borrower in the event of negative information from further over-indebtedness.
For microcredits, however, this is assessed differently. A negative Credit Bureau entry is therefore not a reason for rejection. Nevertheless, a certain creditworthiness should be granted, because a grant without the submission of microcredits is not possible even with a small loan, but very well a small loan despite negative Credit Bureau entry.
Mini-credit has been used for over 30 years to combat poverty in Europe, America and the US. A fundamental problem that arises in the states is that, for example, self-employed tailors or small farmers have no opportunity to obtain a loan from the credit institutions. A loan of less than $ 1,000 can be called a mini-loan.
Without lending, microcredit is the optimal financing solution for start-ups, start-ups, but also for old companies that want to grow and eventually close funding gaps. With a micro-loan, new projects and orders can be realized much easier. Finally, the liquidity situation of companies can be significantly increased by microcredits.
Apprentices, students and students who want to realize small concerns benefit from the mini-credit. Due to a short and small monthly installment, they are also able to repay a small loan amount.