With a mini loan, flash credit or flex credit you can borrow a limited amount of 100 to 1500 euros to meet small and unexpected expenses. The loan must be repaid quickly and the costs can be very high, making other formulas such as a revolving credit or a credit card much more interesting.
The flash credits are especially popular with people who cannot borrow anywhere else because of a negative BKR. It is therefore mainly about very vulnerable consumers who see their debts rising at a very fast pace due to these flash loans.
Features flash credits
The mini loan or payday loan gives you a small amount and therefore no control is performed by the lender to the BKR. Your application is almost always approved almost immediately, but a guarantee is required. Or you choose a personal guarantor: a person who wants to guarantee your loan. This is free of charge but requires a lot of hassle. In addition, few people are eager to guarantee someone else, while the borrower usually does not dare to ask someone in his environment. Most customers opt for a guarantee from a party such as Global Guarantee, but this is very expensive. If you want to borrow 400 euros on 30 days, the guarantee costs no less than 110.10 euros.
The interest that the lender may charge is limited to 14% on an annual basis. A few years ago, considerably higher costs were charged, but this is no longer legally possible. If you now borrow € 400, you will pay back € 404.32 after 30 days. But the guarantee of a party like Global Guarantee is in fact hidden costs that still make the mini-loan very expensive. To borrow 400 euros you end up paying 115 euros in costs!
Vulnerable consumers soon end up in a negative spiral because of the mini loans. For example, they must take out a new flash credit in order to be able to pay off the costs of a previous flash credit.
The regulators believe that flash credit providers have very unethical practices. But because they offer their services from abroad, they fall outside the stricter Dutch legislation and the AFM barely grasps these lenders.
- The money is in your account quickly
- No BKR assessment
- Maximum permitted interest rate is used
- Very expensive guarantee (but these high flash credit costs are on the slope)
- Reimbursement very quickly: within 30, 45 or 60 days
- Due to the very fast way in which you can take out a loan, there is a high risk that you will end up in a debt spiral