Small Loans – How They Work
Small loans are extremely small loans, typically under €3,000. These loans are disbursed extremely quickly because they’re designed to meet small, immediate needs.
Small loans without paychecks are one of the most popular financing options. Today, Italians’ needs have changed dramatically. While in the past, credit was used to make major purchases (such as buying a car or renovating a home), today, people need to cover small daily expenses.
This is why small, fast loans are among the most sought after . But what exactly are they and how do they work? Let’s try to understand a little more in this short mini-guide.
Small Loans – How They Work
Small loans are extremely small loans, typically under €3,000. These loans are disbursed extremely quickly because they’re designed to meet small, immediate needs.
This type of financing is provided both upon presentation of the standard income guarantees required by banks (pay slip, tax return, pension slip, etc.) and also in the form of unsecured loans .
In the first case, interest rates are limited, ranging from 8% to 10%, while in the second case, i.e., in the absence of income guarantees, they are granted at interest rates very close to the legally established limits. This is because the bank assigns a higher risk to a higher profit. Essentially, the higher the risk profile of the borrower, the higher the interest rate applied.
However, even though they may sometimes be inconvenient, these loans represent the only way for many people to access credit, and for this very reason, they are extremely important.
Small, fast, unsecured loans
As we’ve mentioned, it’s possible to apply for small loans without any specific collateral . However, be careful: this doesn’t mean that even those without any collateral can get financing.
We’ve heard from people who’ve had very difficult situations, making it nearly impossible to access credit. That’s why we want to set the record straight: without even the slightest guarantee, it’s nearly impossible to get a loan!
What we wanted to say is that when it comes to small loans, banks are decidedly more flexible and, therefore, will grant loans even if all the collateral isn’t available. Obviously, the particular economic period we’re experiencing doesn’t make things any easier for those experiencing difficulties, and therefore, we must recognize that accessing financing is difficult.
Small promissory note loans
As we’ve already seen in our guide to promissory note loans, these loans are very specific products that, until a few years ago, were not widely used, but are now starting to attract considerable interest from customers.
Essentially, the difference with a normal personal loan is simply that instead of the traditional repayment installments that the bank allows you to pay by debiting your current account or by paying bills, we have bills of exchange .
Obviously, this type of loan is suitable for both small amounts up to 5,000 euros and larger amounts.
Small Findomestic loans
Findomestic is one of Italy’s leading financial institutions, offering a truly wide range of small personal loans . Its geographical distribution (practically present throughout Italy) makes it a very solid and attractive option, also due to the excellent solutions it offers.
In recent months, we’ve discovered numerous promotions that allow you to obtain financing at truly favorable conditions compared to those offered by other banks or financial institutions.
Precisely for this reason, I recommend you take a look at our review of Fidnomestic loans , where we analyze the bank’s offers for housewives, public and private employees, retirees, freelancers, and entrepreneurs.
Small loans for housewives
Loans for housewives are a classic example of a small loan . In practice, many lenders offer specific products designed to finance the needs of housewives.
These are small loans that allow even those who don’t have a regular, permanent job to access credit. However, alternative guarantees must be provided, such as a guarantor’s signature (the most popular solution because it’s also the simplest and fastest).
In the past, small loans for housewives were granted relatively easily, especially by finance companies, but now we find that many things have changed for this category of customers as well.
Small, fast loans for those with bad credit
Let’s start with a clear point to dispel any doubts: if you’re a bad payer or have a bad credit history and don’t have a permanent pay slip or a guarantor, you can’t access credit. Even if you need a small loan, lenders require solid collateral.
As I mentioned for housewives, until 2008, things were decidedly simpler, and it was easier to get a loan even when the situation wasn’t 100% compliant. Over the past few years, however, things have changed dramatically , and today it’s almost impossible to get a small loan without even the slightest guarantee.
If you’re under a bad credit record and have a payslip, you can easily apply for a salary-secured loan (CAD) . If you don’t have a payslip, you’ll need a guarantor. A separate discussion applies to personal loans reserved for government employees , which we’ve discussed in depth in our guide.
What are the best small loans?
Below we see some interesting products that fall into this category:
CreditExpress Mini : This is Unicredit’s small loan, offering loans ranging from €1,000 to €3,000, repayable in small monthly installments (up to 36 months). This is a very attractive product with rapid disbursement and a very favorable interest rate.
SpecialCash Postepay : This loan is offered by Poste Italiane, allowing you to obtain up to €1,500 credited to your Postpay account. The interest rate is very high (APR ranges from 15.46% to 18.21%), but the loan can be applied for quickly and with virtually no additional collateral.
Cofidis : This financial company offers small loans up to €5,000, repayable in installments starting from €30. Very convenient and fast, the costs depend on the terms you can secure, which vary based on your personal profile.
AgosDucato : This major financial institution also offers small loans. Among the advantages of AgosDucato products are the ability to customize financing options and the presence of branches throughout Italy.
These banking products are some of the best solutions that will allow you to quickly obtain small amounts of money to meet your needs. For more information, you can contact the relevant lenders directly and schedule an appointment to discuss the feasibility of a small loan to meet your needs.