Mini loan for flash credit – Want to borrow 50, 100, 200 or 500 euros quickly?
A flash credit is nowadays very popular and is also called a mini loan, flash loan or SMS credit. A flash loan has a low loan amount and a very short duration. With a mini loan it is often not possible to borrow more than seven hundred euros and the term is often set at a maximum of one month or at most three months.
Due to the short duration and the low maximum loan amount, these lenders are not supervised by the AFM. That is the abbreviation for Financial Markets Authority.
Merratu from Finland is the first lender to offer this type of loan in the Netherlands on 1 July 2007. Nowadays, the market has several lenders for mini-loans, such as Cashtor, Advance payment and Mini-loan.
The maximum statutory interest payment was set at fifteen percent,
Yes, but the credit providers of mini-loans do not charge interest, but charge treatment costs. These costs often exceed the maximum interest rate set by law. If the treatment costs were converted into an interest payment, the level of the interest rate on an annual basis could amount to as much as six hundred percent.
A change has been made to the Financial Supervision Act, which means that flash loans and mini-loans will now also fall under the supervision of the AFM. The change would not be implemented until June 11, 2010, but there has been a delay in implementing the Consumer Credit Directive, which includes the flash loan. With the amendment of the law, the rules regarding expressions of advertising for flash loans will become stricter, but the creditworthiness assessment of applicants for flash loans will also apply. In addition, the lenders who provide flash loans must state the annual percentage rate of charge on their website.
Similar loans are available in the United States, which are provided under the name pay day loan. This term is used to indicate that the loan can serve to bridge the time until the next wage payment. After all, pay day means the day on which the wage is received.