Coming across a huge variety of options concerning online lending may provoke puzzlement in potential borrowers. They may hesitate about their relevance or claim that something is wrong with them. Actually, the truth lays in their primary purpose. Microcredit is one of the options for people with less time to have cash transferred on a bank account immediately. It is a life-saving solution when all the banks reject you or you have to attach many documents to receive approval. However, even such financial help may contain hidden pitfalls. Check them out.
What Is Microcredit?
This service is aimed to provide people with small amounts of cash for any of their needs without explaining the purposes. For example, borrowers regularly turn to microcredit when they still have time left before their salary, or they need to discharge the previous debt. And, of course, the most commonly it is issued for medical procedures, clothes or home renovations. Accordingly, online lenders are not interested in requesting much documentation. Only Spanish ID, a documented source of income, a bank account number. That’s it. As a result, a person can get a microcredit loan within 15-20 minutes, in case, he managed to fill in out the form without mistakes.
To Choose or Not to Choose?
Let’s speak of both the pros and cons of microcredit programs. Do not be surprised if the benefits prevail, they are designated in the way to not provoke additional problems within borrowers.
Benefits:
- Registration or application process does not take longer than 15 minutes. The user-friendly form for microcredit requires only a few details to proceed including your full name, valid mobile number, email, and bank account.
- More than 90% of approved requests. If you provided accurate data without mistakes, you are most probably automatically approved.
- The online calculator at hand. If a borrower only thinks of choosing the microcredit, he can calculate the possible amount to request, repayment period, and the interest rate on the creditor’s site.
- New applicants have a lower interest rate. And, with times when they boost their credit history, they can apply for large credits.
- People with a bad credit history are eligible. Do not even think of wasting your time on banks. They will first get on your nerves, and then say you are rejected. Online lenders, in turn, encourage such applicants because they understand their needs for microcredit.
Disadvantages:
- Penalties. In case, you missed a deadline to repay the debt, you will face additional charges.
- Small amounts to request. Of course, microcredit does not predetermine a load of cash but people would like to borrow more money with the same requirements. For such purposes, take a look at other options.
As you may see, microcreditos are helpful in terms of speed and conditions. Nevertheless, at all times, a person should read the agreement with online lenders because there are always both reliable and fraud companies. Check for hidden fees or possible penalties. If you understand that, you won’t be able to discharge debt on time, make sure to inform the creditor.