Microloans are small, usually short-term consumer loans. They are issued by microfinance companies working both online and offline. It is much easier and quicker to borrow money urgently from a bank, but the rates are higher. In some companies the interest can reach 2.5% per day, and if the borrower violates the terms of repayment, it rises to 3-4% per day. However, with the right choice of micro-loan and a responsible attitude, this type of urgent micro-lending becomes an effective, profitable and indispensable financial tool. You just have to choose a reliable borrow money app.
What kinds of microloans there are and how they’re beneficial
The most popular type of quick loan is the “payday microloan”. Its amount is usually small, and the repayment period is one month. These loans are also called short-term loans and are repaid in one payment – the loan principal plus the accrued interest. A favorable variant of “payday loans” is the proposal to borrow money at a minimum rate of 0.01% per day. This is a marketing ploy to attract new customers to payday loan companies. As a rule, the preferential rate is valid only if a number of mandatory conditions are met:
- The client first obtains a loan from this company;
- Repayment must be made on time, without delays;
- The amount and term of such a microloan are limited.
Another offer from companies of this type is “long-term loans”. They are available for the period from 1 to 12 months. The amounts here are somewhat higher. There are no interest-free preferential loans, but the rates are somewhat lower. These offers are comparable to consumer loans from banks. More details at the link: https://apps.apple.com/us/app/cash-advance-tsaip-loan-app/id1492828465. But their registration is easier and faster, as the companies have minimal requirements for borrowers and the package of necessary documents.
Advantages of microloans
Today, there is no full-fledged alternative to microloans. They could be replaced by bank loans, which are more profitable in terms of rates and larger in amounts. But banks don’t give money without verification and don’t cooperate with clients who have a bad credit history. In addition, most of them do not work remotely online, nor do they work around the clock. Another option for fast lending is pawnshops. But here loans are available only offline and on the security of liquid property. An important feature of microloans is the ability to borrow exactly the amount of money you need and for exactly the period for which it is realistic to pay it back. This allows you to control the level of overpayment on the loan. And the possibility of prolongation helps to avoid penalties and fines.