Anyone who needs additional liquidity in the short term to bridge a financial bottleneck, for example, caused by an urgently needed repair to their own vehicle, usually falls back on overdraft facilities. However, overdraft facilities in particular are considered very expensive and also a potential debt trap. But more and more people are turning to so-called mini-credit offers – for good reason.
For some time now, financing has no longer been based exclusively on the classic standard loans granted by banks, such as instalment loans or overdraft facilities. In addition, the range of offers has increased and it is no longer only the classic credit institutions that grant loans. One example is the loans from private individuals, which are made available by private individuals via appropriate intermediary platforms. Another type of credit that has become increasingly popular in recent years is the so-called mini-loans.
Three classic standard loans from banks
If you take a look around the banking landscape and inquire about loans, you will quickly notice that most banks offer three standard types of loans:
- Instalment loan
Of course, there are often some other types of loans offered, but in more than 80 per cent of the cases, the loan taken out is one of the three previously mentioned loans. Although the banks can usually cover over 80 per cent of their customers’ financing needs with these three types of loans, the respective solution is not always the optimal one. This is one of the reasons why some specialist providers now offer so-called payday loans, which certainly fill a gap in the market that has existed until now.
What is a payday loan
The essential characteristic of the payday loan or short-term loan can already be deduced from the name. This loan is made available for a short period of time for very small loan amounts, which usually start at 100 GBP. In addition, there is a limit, because with most payday loans providers the loan amount may not exceed 1,500 GBP.
Another feature of payday loans is that this form of lending is not offered by ordinary banks. Another typical feature of payday loans is that the maturities are very short. They usually range from one to three months.
In the overview, the following are the main characteristics that make payday loans stand out and distinguish them from other types of loans:
- Small loan amounts between mostly 100 and 1,500 GBP
- Specialist provider as a lender
- Short maturities of one to three months (in exceptional cases even longer)
Who offers payday loans?
As mentioned before, it is not the usual banks that offer payday loans. Instead, there are special providers, whose business is mostly even exclusively cash advances, as payday loans are also called.
Currently, the following active providers specialising in payday loans are on the market:
Before you decide on a payday loan provider, it is definitely a good idea to compare the offers. Therefore you should, of course, pay attention to the loan interest, but also to available additional services such as
- Multiple rate option
- Express bank transfers
- Costs of late repayment
- New customer campaigns
With some lenders, additional costs must be incurred for certain services. This has become a typical feature of payday loans, especially if you are not satisfied with the standard offers. Nevertheless, there are considerable differences in the costs of the so-called additional options between the lenders.
The loan interest rate: What do payday loans cost?
The main cost factor for a payday loan does not necessarily have to be the loan interest rate, although it is, of course, payable by every borrower. The average interest rates for payday loans are about the same as for overdraft facilities, so that you as a customer usually pay between 7.95% and 145% interest. Because the terms are usually between one and three months, the interest sum is relatively low despite the high interest rates. If, for example, you take out a mini loan of 1,000 GBP with a term of two months, you only pay a total of around 18 GBP in interest at an interest rate of 11%. From this point of view, the payday loan would be favourable, if the additional options with costs were not added.
Chargeable additional options are not uncommon with payday loans
As already mentioned, there are additional options for many payday loans, apart from the loan interest rates, which are subject to costs. Of course, the borrower does not have to make use of these, but in some cases, the additional offers are an interesting and attractive solution. As a rule, these are more flexible and improved services, if you compare the options with the standard offer of the respective lender.
Depending on which lender is involved, the following fee-based additional options, in particular, can be found:
- Instant payout
- Multi-rate option
- Higher loan amounts
- Faster execution time
In order to make these additional options more attractive for the customer, some lenders may have deliberately designed their standard conditions not to be very customer-friendly.
For example, some lenders offer a processing time that is usually between 3 and 10 working days. If the customer wants to receive his money much faster, which would not be surprising given this standard processing time, he can choose one of the additional options mentioned. However, it is not uncommon for between 50 and 100 GBP in additional costs to be put on the table.
The situation is quite similar with other additional offers with costs, such as the multi-rate option. The borrower has the option of repaying the loan within four or five months, for example. If you need a slightly larger amount, you can also find a chargeable additional option with some providers.
Whether you just have a few questions or need advice – we are here for you.
Negative interest rates, exclusive terms or loans without checks: the credit market is highly competitive. Many providers often advertise vociferously with conditions and offers that at first glance appear very favourable. These advertising promises sound tempting when it comes to realising one’s own wishes and achieving set goals. And yet it is advisable not only to pay attention to the interest rates when choosing a lender. In addition to fair conditions, our Credit company offers excellent service, on-site and online advice and other attractive features. Find out more now.
MORE PERSONALLY – The range of advisory services for Credit company
It all starts with a fair consultation. No matter whether you just have a few questions or would like some advice – we are there for you. As individual as your credit wishes are, we would like to tailor our advice to you. Therefore, in addition to our customer hotline, we also offer online chat, video advice or e-mail communication. Our service hours are Monday to Friday from 8 to 19 o’clock and Saturday from 10 to 18 o’clock. If you prefer a local contact person, you can find one at one of our 10,000 partner bank branches. Regardless of the channel, our advice is always free of charge. Benefit from our excellent service.
If you would first like to compare different credit options yourself, our free credit calculator is just what you need. Here you can immediately find and compare the optimal rate for your installment credit online, simply and transparently, based on your desired amount and term – of course, without any obligation.
MORE FAST – The Credit company with account view
The Credit company with account view offers a credit conclusion when things have to go particularly fast. Within only 10 minutes you can complete your credit completely online, without any paperwork or postal delivery. With a single glance at your current account, your credit is decided immediately. Thanks to the instant decision, the money is usually in your account on the next working day, if you wish to borrow up to 25,000 GBP. The contract is concluded completely online via video legitimation and digital contract signature.
Do you need more than 25,000 GBP? We also offer you Credit company up to 75,000 GBP, online or on site at one of our partner banks. The following applies to both options: Credit company is not earmarked for a specific purpose.
For more information about the Credit company with account view, please read our blog article on this topic.
Common credit reasons of our customers
- Car & Motorcycle: A mobile set of wheels can be an expensive undertaking. That’s why Credit company customers are happy to take out loans to afford the car or motorcycle of their dreams. Advantage in contrast to the classic car loan: You receive the vehicle title directly, it does not have to be deposited as loan collateral.
- (Further) education: Your education is worth an investment. That’s why Credit company helps you if, for example, you have to pay for further training out of your own pocket.
- Health: You shouldn’t save on your health. If your health insurance does not cover a desired service for your well-being, we can help you.
- Celebrations & Family: Invest in what is dear to you. Whether family or graduation parties, gifts for weddings or round birthdays – for celebrations you sometimes have to dig deep into your pockets. A loan from Credit company is always a way to support you.
- Travel: Maybe you shouldn’t finance every holiday, but the one big dream trip you’ve been wanting for so long? With effective protection against over-indebtedness, we make you a responsible globetrotter.
- Funeral: But even for less pleasant credit occasions, such as financing funeral expenses, we at Credit company are there for you and can help you in these difficult times.
MORE FAIR – The Credit company Financial Compass
Transparency and fairness are not only our motto, they are actively lived. In the event of a credit rejection, you will receive your personal Credit company financial compass. This contains a detailed overview of your financial situation. We describe your individual reasons for refusing a loan and explain in a transparent and comprehensible manner the data on which we base our calculations. You will receive the Credit company Financial Compass by post if you make an online inquiry or by your advisor if you make an inquiry via one of our partner banks. In this way, we offer you partnership-based support in all financial situations.
MORE BEQUEM – Your personal customer portal
After completing your Credit company, you will already receive the access data for the customer portal, a fair companion always and everywhere. Here you will receive a personal account overview of your Credit company products and a customer mailbox with archive function around the clock, 7 days a week. You can also easily make changes to the instalment plan, make a special repayment or increase the instalment. In addition to free account statements, interest certificates and redemption schedules, you can also request information on the redemption amount. As a special service, the customer portal gives you an overview of your personal situation and individual options at a glance, as well as further offers for your financial freedom.
MORE EASY – The Credit company financial reserve
The Credit company financial reserve offers you a clever extension to your credit. If the planned investments exceed your credit amount, you can borrow up to an additional 15,000 GBP, depending on your credit rating, with the financial reserve activated. Quickly and unbureaucratically you will receive the desired amount on your account immediately after calling up the financial reserve.
A further credit decision is just as unnecessary as a visit to the bank. Because you can call up the financial reserve at any time and from anywhere – by telephone or with just one click on the customer portal. Of course, you can also have your customer advisor take care of the direct retrieval. You decide whether you want to call up the financial reserve in partial amounts or in one piece.
With immediate effect, Credit company offers SEPA real-time transfers for the financial reserve. If your bank also supports instant payment, you can now transfer your financial reserve to your own current account in seconds. This service is of course free of charge.
Additionally, the Financial Reserve can be combined with your credit card at participating Volksbanken Raiffeisenbanken. This requires no borrowing and you can conveniently pay and withdraw money worldwide without cash. Furthermore, purchases can be financed flexibly at any time in fixed monthly instalments.
Detailed information on the Credit company financial reserve is available in our blog article “The Credit company financial reserve at a glance”.
Better safe than sorry – The Credit company protection certificate
An important piece of security without hidden costs and small print: By taking out an Credit company protection certificate, you prevent the consequences of unforeseeable events in your life. Incapacity to work, unemployment, short-time work, divorce or even death can endanger the repayment of a current loan. We recommend that you take out residual credit insurance – the Credit company protection certificate – to prevent this. Whether and to what extent you insure yourself with the residual credit insurance of our partner R+V Versicherung is of course up to you. You can flexibly select the risks you want to prevent with our four service packages.
By taking out an Credit company protection certificate, you also remain flexible. This can be revoked within the first 30 days. It can also be cancelled at any time. Whether you decide for or against a cover letter has no effect on the actual credit decision.
Credit company – Power financing as relaxed as never before
Credit company does not define itself through attention-grabbing minus interest policies, exclusive promises or the cheapest conditions on the market. For us, the focus is on secure performance in order to offer our customers security and financial flexibility. In doing so, we want to accompany you not only before and during the conclusion of the contract, but also during the repayment phase as a reliable partner at your side and make financing as convenient as possible for you.
For us, fairness means giving you the necessary attention. Whether on the telephone, in video consultation or in our in-house Customer Service Centre, together with over 10,000 branches of our partners, we are always attentive and helpful contact partners.
Being fair means keeping up with the times. Our digital solutions are designed to make both the loan agreement and the subsequent administration as easy as possible for you. That’s why we offer you two excellent digital companions: the customer portal and the Credit company app.
But being fair also means communicating with each other at eye level. When making a credit decision, for example, we make sure that you can repay your instalments without any problems. As a matter of principle, transparency is our top priority. That’s why we also show you in our customer portal how much interest you could save if you could repay your loan more quickly.