If you decide to take out a loan because perhaps a long-standing wish is to be fulfilled or because an urgent investment cannot wait for a delay, then taking out a small payday loan can be the right choice.

A small payday loan provides a loan amount of up to $ 5,000, which can then be used individually, depending on the type of loan. So that the desire to take out a small payday loan is not a wish but becomes a reality, it is important that some prerequisites can be met.

Compare interest rates

Compare interest rates

Even if loans are offered at every nook and corner, you shouldn’t take out a small payday loan without comparing different offers in advance. Do not fall for the lure offers of the banks, but always get your own impression of the offers. This is the only way to determine whether the loan offer is good or not.

With a small payday loan, the interest rates are usually relatively low. It always depends on where you apply for the loan and what credit rating you can show for it. With a little luck, you will find offers that have an effective interest rate of less than 3 percent. However, there are also offers where the effective interest rate is over 10 percent. This would be an issue if, for example, you have a negative Credit bureau and therefore cannot take out a conventional installment loan from a traditional bank.

However, since installment loans are one of the most lucrative loans for banks, they will always endeavor to make you a good offer. A guarantor or second borrower is only necessary to take out small payday loans if you have problems with the credit rating. It’s best to clarify this in advance so that you don’t end up without a loan. Simply check your income and expenses and query the Credit bureau. You can do this free of charge once a year. This means that you already know what requirements you have before you take out the loan and can search for suitable offers in a targeted manner.

Is the overdraft facility worth it?

Is the overdraft facility worth it?

Some consumers think that when taking out small payday loans, they can simply use their overdraft facility. It does not have to be applied for separately and there is no need to query the Credit bureau or prove the income.

However, we are of the opinion that the overdraft facility should only be used at very short notice and is therefore not ideal for taking out small payday loans. The costs around the overdraft facility are very high and are significantly higher than the costs of a conventional loan. If the overdraft facility is used over a longer period of time, this becomes a very expensive matter.

However, we can recommend the consumer loan. You will receive this if you buy something from a dealer and want to finance what you have bought. Technology markets and furniture stores in particular make use of this type of financing and thus make shopping easier for their customers. Small payday loans are also not a problem here and are granted on a daily basis. However, unlike small payday loans through the bank, you cannot determine yourself how much the loan amount should be. This is always based on the items purchased and flows directly into the purchase. You will therefore not receive the money.

Is a surety needed?

Is a surety needed?

As a rule, you do not need a guarantor if you want to take out a small payday loan. Just make sure that your Credit bureau is positive and your income is stable. Then you can easily get a small payday loan.

And if there are problems with the Credit bureau, you can also take out the small payday loan abroad. For example, up to 5000 USD will be provided by the Sigma credit bank from Liechtenstein if you can prove a fixed income.