What is a mini loan and/or flash loan?

In recent years, mini loans and/or flash loans have become increasingly popular and more and more people seem to be taking out one. This often concerns a loan of a relatively small amount of money for a short period. It is mainly younger people who are more than happy to take advantage of this.

Mini loan/flash loan

A mini loan is gradually becoming an increasingly popular form of loan. It is mainly characterized by the relatively small amounts. This includes amounts between 50 and 300 euros. Another feature is the term of the loan. A normal loan often involves a minimum of one year, but a mini loan often involves days. Most terms are between 10 and 30 days. Finally, it is characteristic of a mini loan that you do not pay interest. Instead of interest, you pay treatment costs and/or administration costs. Converted this way you pay a higher percentage in interest, it is just called differently.

Why take out a mini loan?

A mini loan is often taken out by young people and is intended more as a bridge for a short period. Most people take out the MNI loan at the end of the month in order to meet their obligations and then pay off this loan at the beginning of the new month. The loan is therefore not intended for a longer period.

How does the loan work?

The big difference between a mini loan and a regular loan is mainly the speed with which you can take out a mini loan. Most mini loans can be taken out within an hour, while a regular loan can often take days. A mini loan can be taken out with a simple text message and often some documents are required, such as a copy of the passport, bank statement and pay slip, but this is not necessary for everyone.

What are the risks of a mini loan?

The biggest risk of taking out a mini loan is not being able to repay the loan within the set period. When taking out the loan, you agree to the conditions and costs. You agree to repay the loan within a period of time. However, if you are unable to do this, administrative costs or fines will be charged, which can quickly add up. The risk for most people is that this will become a structural problem and they will have to borrow money again every month.

General terms and conditions of a mini loan

There are a number of general conditions that apply when taking out a mini loan. You must be 21 years old when taking out the loan and you may not take out a loan if you are bankrupt or in default of repaying a loan. You must live in the Netherlands and be legally competent.

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