The pros and cons of a mini-loan

A mini loan is a loan with a short term. Often it is between 7 and a maximum of 28 days. 

The amount to be borrowed is usually between € 50 and € 750 at a time. Such a mini loan is usually easy to close, sometimes the money is even after 10 minutes on your bank account. This is of course very useful when you need some extra money quickly.

In this article, I want to give more thought to the pros and cons of a mini-loan. As is also apparent from the above paragraph, a miniature loan is of course very easy and convenient at first glance. This can be closed quickly and they are small amounts, so that almost everyone can take out such a small loan.

Benefits of closing Mini Loan;

  1. Quickly borrow a few hundred euros, for example as an advance on income;
  2. Requesting a mini loan is quickly arranged and is often paid the same day;
  3. The costs of a mini loan are known in advance, you know where you stand;
  4. The mini loan can be requested quickly via the internet or SMS

In addition to these advantages, there are also some drawbacks to a mini-loan that certainly needs to be stopped;

  1. Generally high costs in relation to what you lend;
  2. Repaying the loan too late is very expensive;
  3. Pay attention to extra service costs.
  4. This differs completely per provider, for more details see the closing page

So a mini-loan has its advantages, but certainly also its disadvantages. On the one hand there is the ease and speed with which a mini-loan can be requested. Also the amount is often quickly on your account. On the other hand, these loans are expensive in relation to what you borrow. If you want to take out a mini loan, that is of course your right.

It can certainly be a godsend to quickly borrow some extra money for the holidays or when something important in the household breaks down which needs to be replaced quickly. However, I would like to emphasize that you are well aware in advance that these mini-loans also cost money.

What is perhaps even more important, make sure that when you take out a mini-loan, you can always pay it back within the set time limit!

Is it possible to take out a second mortgage?

Closing the second mortgage.

Taking out a first mortgage is one thing, a second is closing another, via a second mortgage an extra loan is actually taken on the same collateral. Did you borrow as much as possible with the first mortgage? Then you will have to prove for the new mortgage that the house has increased in value. In other words: that there is now an overvalue on the house.

Closing a mortgage is actually very simple. Indicate to a lender that you want a second mortgage, and they will see if you are eligible. On average, a mortgage is always taken out with the same lender as the first mortgage.

This follows from the protection rules of mortgage creditors. In the event of any defaults, the first mortgage lender has priority over any subsequent mortgage creditors. This means that the mortgage lender would fish behind the net, and in the worst case would see nothing more of his money.

Such a “higher risk” is then usually translated into a higher mortgage rate. As a result, the interest rate is lower than the interest rate on a personal loan , but still higher than that of a first mortgage.

Renovate your home?

Planning to renovate a house? Then an extra mortgage is an excellent opportunity. Because the interest on the second mortgage can be tax deductible for renovations, remodeling is often a lot cheaper.

Sour-earned savings can also remain unrelated to the savings account. The credit mortgage is a frequently used form of credit for renovations. The borrower can freely withdraw the amount up to his limit and repay the credit at his own pace.

Crossing the existing mortgage is an alternative to taking out a new mortgage. The disadvantage, of course, is that you will have to pay a penalty amount, compensation for termination. Comparing the termination compensation and searching for the best mortgage lender is therefore recommended.

Are there no snakes in the grass?

A mortgage, of course, also entails some costs:

  1. Closing costs for a new mortgage
  2. Notary fees for any purchase of a second home
  3. Costs for valuation. In order to show that the house on which the first mortgage runs has increased in value, the home will have to be valued. Such a valuation is of course not free of charge.

Mortgage for a second home:

A holiday home from thousands found? Before you make an offer on the house with your savings, it is good to know that a second mortgage is also possible. A disadvantage, however, is that the interest on the mortgage of the second house is not tax deductible.

There are also many lenders who want to take out a second home financing. Also browse through the range of credit providers in the holiday countries themselves. They often have attractive rates for second homes, and they can estimate the risks better than Dutch or Belgian banks.

The fact that certain countries, such as Spain, work with variable mortgage rates is all the best. Comparing mortgage rates for a second mortgage is a must.