How do fast loans work? Requirements, APR and more

Quick loans are a new kind of financing that has been installed strongly in the Spanish market. Its great accessibility is joined by the fact that they will demand less administrative procedures for its concession. To the point that if everything goes well you will have the amount demanded in your checking account in a few hours. However, in many cases fast loans have an interest rate that is considered excessively high. Here we tell you everything you need to know about a quick loan.

 

What are fast loans, where to hire them, advantages and disadvantages

credit loans

Fast loans are characterized by offering small amounts of money, between 50 and 1,000 and that you can allocate to cover any purpose: from paying off a debt to third parties to giving yourself a small personal whim. You can hire it through the numerous financial platforms that market their services in Spain. Through an operation that is carried out in online format.dollars

Strengths of fast loans:

  • It is not necessary that you have to go to any office, but the management can be done at any time of the day on the Internet.
  • It is a business niche that is not covered by banks as it is a very small amount of financing.
  • The speed to arrange the money in the current account since the requests are resolved in a very short space of time.
  • You can find promotions with 0% interest if it is the first time you ask for a loan with that platform. For example, a fast lending entity such as Moneyman offers the first loan of up to $ 300 without interest to be repaid between 5 and 30 days.

Weaknesses of fast loans:

  • If what you want is to get amounts over 1,000 , you will have to resort to a personal loan.dollars
  • The interest rate they apply to this product is much higher, so interest can skyrocket. Some fast loans offer TAEs of up to 1,000%.
  • In some cases, the platforms are not as transparent as they should be regarding the interests, commissions and penalties that apply. Therefore it is advisable to review the fine print of the contracts.

 

Requirements to apply for a quick loan Can I apply if I am in ASNEF?

quick loan

Access to fast loans can be the last chance to access a loan. If the bank rejects the loan because you do not meet their requirements or are included in a list of delinquents, fast loans can be a solution to find a small liquidity tip for your personal accounts. Of course, you will have to meet a series of basic requirements: to be of legal age and not to have a pending debt on that particular platform.

 

APR in fast loans

quick loans

In all cases, the interest rate you will have to pay on a fast loan is higher than for conventional loans or personal loans. Instead, fast loans are usually exempt from commissions and links.

In any case, the equivalent annual rate, better known as APR, moves in strong oscillations depending on the financial platform responsible for marketing them. In a fork that goes from 20% to four figures. In the current offer of fast loans, a series of proposals with high interests and sometimes exceed 3,000% are concentrated. How is it possible to reach these levels? There are 2 reasons mainly:

  1. In Spain you can lend money without being regulated by the Agree Bank. As a consequence, the platforms are free to make the loan more expensive as the solvency of the claimant is lower. This practice is perfectly legal since they base their strategy on the payment compliance before the penalties for not respecting the return deadlines.
  2. The APR represents an Annual Equivalent Rate, that is, the interest rate applicable for 12 months. As fast loans are contracted only for 1 or 2 months, the APR is multiplied to fit what this same 12-month loan would provide proportionally. If it were hired for 365 days instead of only 30 days, the APR would be reduced.

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