The special mini-loans, in which a few hundred euros could be borrowed for a short period of time, are no longer offered in Belgium. How can you borrow a small amount of money? There are still various options available, but usually, borrowing is also more interesting and easier to access as soon as it concerns slightly larger amounts.
Searching for money? Here are installment loan providers
Briefly describe what is meant by a mini loan or a loan credit: A mini loan varies from 50 euros to 800 euros and had to be paid back within a short period of 7 to 30 days. Such small loans, which are also known as a mini credit or microcredit, had the intention to bridge a small period, for example in anticipation of your wages being paid.
Because it concerns a short-term loan of a maximum of 30 days, the Consumer Credit Act also does not apply. Other loans that fall under this law are obliged to express the cost price in the APR and to conduct a credit check.
Small loan: the possibilities
Those who still come across the term minilening will have to take into account the fact that they try to indicate that it is a small loan, but that it will usually be about a personal loan on payment or a loan without a bank. In short: all loans that fall under the Consumer Credit Act. You can easily compare these types of loans because the APR (Annual Cost Percentage) must be mentioned. In other words, you can quickly make an estimate of the total cost of the loan.
Are you looking for a small loan to finance an unexpected expense, or to bridge a period in which it is financially difficult? The start of the school year or a washing machine that suddenly breaks down are traditional examples of situations where people are looking for ways to finance this. You can read more about the options available on the page.
Personal loan (installment loan)
As mentioned earlier, the term minilening is still frequently used to indicate loans for which several hundred euros can be borrowed.
A small loan serves to pay for small expenses. You can usually borrow money for an amount starting from 500 euros. As it will be an installment loan, a distributed repayment plan will, therefore, be proposed which will usually take at least 1 year. This is therefore very similar to a car loan or renovation loan, only the loan amount and the repayment period will be different.
Comparing an installment loan
Always compare different providers! Those who look around online will soon notice that some lenders apply very high rates for small loans.
For small loans, a statutory maximum has been set at 18.50%. This concerns loans for amounts smaller than 1,250 euros. This is very expensive and you should avoid as much as possible. Maybe you can find a cheap installment loan? Push the installment button…
Exception: Digital loan
A digital loan serves to finance small electronic expenses. Think of a computer, a smartphone, a camera, etc … This loan was created by HelloBank. The minimum amount that you can borrow is 500 euros and the APR is considerably lower than other small loan providers. This is mainly because proof has to be provided of the purchase.
Use a money reserve
A cash reserve or revolving credit is in itself a relatively expensive way to finance a purchase, but as the name suggests, it may be useful in certain situations to bridge a temporary period.
With a money reserve, there is a lot of flexibility, which is also the big advantage of this form of credit. A credit limit is agreed in advance that you can freely dispose of. If you pay back the amount withdrawn after one month, you can use it again later.
You only pay interest when you withdraw an amount. It is therefore important to pay back the withdrawn amount as quickly as possible. As an alternative to a small loan, this can be helpful in some cases.
Although a money reserve can be very useful to keep behind, it also comes with its dangers: it is an expensive credit formula and if you become too dependent on this credit, you pay a lot of interest every month.
Try to avoid a revolving credit if you can not repay the borrowed amount quickly (within 3 months). Avoid money reserves even when you get the idea that you are too dependent on it. In that case, have your existing money reserve converted into an installment loan and pay it back in monthly installments at a lower interest rate.
Borrow small amount, try with family?
Borrowing money from friends or family is more common than you might think. It is absolutely no shame to take out a small loan within your acquaintance or with family at unexpected costs. For small amounts, chances are that someone quickly lends you the money you helped with, and you can spread the repayment in a few months.
Good agreements, of course, make good friends and that is why it is important to repay the amount as agreed and always show your goodwill by, for example, signing a confession of guilt spontaneously. For larger amounts, however, we always recommend to draw up a private contract with all formalities.
Click here for more information about private loans.
Crowdfunding for private individuals as an alternative?
Recently, individuals in Belgium can also borrow money through crowdfunding. The first platform that was established is Modero where you can borrow private money. Your creditworthiness will be checked with your registration, but this could possibly be an alternative in your situation?
The modalities are similar to those such as a personal loan. You can borrow money from 1,250 euros.