Micro loans are smaller loans that are intended to help in short-term financial situations. The most common is that it is possible to borrow up to USD 3,000 – 5,000 from the lenders. Sometimes there may be opportunities to borrow up to USD 10,000, but the lenders who offer this are in particular many in number.
To think about before borrowing money in the form of micro loans
There are, as always, a number of things to consider before making a decision whether to borrow money or not. Here we will take a closer look at the different parts of the micro-loan.
Compared to all other types of loans, micro loans have a very short maturity. By comparison, private loans have a maturity that starts at 1 year and can then extend to about 12 years. Instead, the micro-loans have a maturity that in most cases is only 30 days. Some lenders offer longer repayment periods and then we can talk about time of up to 3 months. These longer maturities usually apply to the slightly larger micro loans.
Micro loans are, as the name implies, no major loans. They start from USD 500 and extend to a maximum of USD 10,000. However, as we said before, it is most common for lenders to have an upper limit of USD 3,000 – 5,000.
It is also not uncommon for them to have rules that say that you must be a repeat customer in order to have the chance to apply for the various lenders’ largest loans.
As most people know, micro loans are not a cheap form of loan to take, especially if you look at the effective interest rate. Then, effective interest rates are often a pretty bad measure for micro loans, but regardless, you should be aware that you have to pay a fairly high price to borrow a smaller amount for a shorter period of time.
Therefore, before you borrow money, you must carefully plan so that there is money in the account to cover the repayment when the maturity expires. If you do not repay your loan on time, the risk is high that the costs will go away.
Compare micro loans
Before making a decision whether or not to borrow, you should consider what it costs to borrow the amount you intended. On this site you can find price comparisons of micro loans that can help you with this.
Quite quickly it is then noticed that the costs vary greatly between the different lenders. Which means you can save quite large sums on choosing the right lender if you decide to borrow money.
How to apply for a micro loan
It is very easy to apply for this type of loan. The simplest way is to go to the desired lender’s website and fill in the application form that is available.
If you want to borrow via mobile, which you then call SMS loan, this also goes smoothly. In the same way, you go to the lender’s website and there you find what you need to write in the SMS that you send in.
This was the simple explanation of how you borrow. More information on how it works is always available on the lenders’ websites.