Microcredits: What are they and how can they be requested?

Microcredits are loans of small amounts that do not have too many associated interests. They are amounts that are granted to cover sudden needs. For example, unforeseen expenses that you have to do. There are also people who request it simply to grant themselves a wish or a whim, such as being able to go on vacation.

Online microcredits for own labor financing

Online microcredits for own labor financing

These small amounts are a method of financing that autonomous people and SMEs are also using to give their work projects a boost. Therefore, microcredits are an opportunity, in turn, for all those unemployed people who want to find an exit with which to obtain their own income.

Microcredits are able to avoid social exclusion

With the increase in unemployment, the risk of social exclusion has increased. A microcredit is a way to finance a self-employment initiative that you have in mind. In fact, it is the most used method of financing in this regard, often with the joint help of NGOs or other types of social organizations.

Nowadays, we can affirm that online microcredits are the ideal alternative for entrepreneurs who have ideas, but few resources to start up their work projects. One of the basic problems of current unemployment is that many people have difficulty starting small projects.

The microcredits drive this type of people because the companies that grant them know that, in short, the self-employed and entrepreneurs are the basis of the economy.

Online microcredits versus traditional entities

Later we will tell you what are the advantages of online microcredits compared to those of traditional entities, but in this section we want to highlight another issue: the lack of financing or the difficulties in accessing it that exist in the more traditional sphere. Again, this is a problem for SMEs, self-employed or people who do not have sufficient guarantees.

On the part of the banking entities there is a general refusal to grant credits if you do not have a payroll. And, in addition, sometimes they ask you for your contract to be indefinite. Nor will they finance you if you do not have a guarantee or other requirements that they consider essential when granting credits. However, if you need financing you should know the other alternatives that you have and that are in your favor. And one of them is microcredits.

These amounts, mainly lent to people with less economic resources, are obtained more quickly and with better conditions by companies specialized in microcredit. Because, in the end, the conditions of the banking entities to access the microloans end up being the same as those offered for any other credit.

The characteristics of a microcredit

The characteristics of a microcredit

The main thing is that you know that microcredits are a financial product. As such, they have common characteristics, no matter who the lender is.

First of all, it is usually small amounts that are granted to people with less economic resources who need financing, or want it, and who can not or do not want to access the credits of the usual banking entities due to their restrictive conditions.

Although each particular case will have specific characteristics, it is possible that a person may have access to more credits, but may wish, at a specific time, that the amount borrowed be less, due to a specific expense that he has to make.

The first common feature of online microcredits is that the amount offered to you usually varies between € 1,000 and € 25,000 (those with a higher amount). In addition, another of its attributes that, in turn, becomes one of its advantages, is that you do not need to have a guarantee or any kind of personal guarantee to be granted.

Only, you will need a regular income, which can also come from a pension, a scholarship or similar, etc. The conditions are more advantageous than those of the traditional loan, as you will see later.

How can you request it?

If you want to get a microcredit, you must first think about the use you want to give it. In turn, keep in mind that it is not a gift, so you should be clear about how you will recover the money to return it in the future. You also have to think about the amount you need and, from there, observe all the possibilities you have in your favor to get microcredits.

Online microcredits have the advantage that you do not have to leave home to see conditions or to request them. Your bureaucracy is much smaller. Therefore, you will need much less data to prove, little more than the DNI and the source of your regular income.

Study the resources you have and create a plan, even mental, to know how you will return. Remember that, when the return period is passed, interest usually increases. In this sense, we advise you not to choose a shorter return time to get better interests, if you are not going to be able to return them, because if you finally exceed the term, the increase in those interests will be greater than if you indicate a longer term from the beginning.

Obtaining your microcredit

Obtaining your microcredit

To get a microcredit you will go through the phases of general applications, similar to those of other loans or loans, only that in online microcredits these phases go much faster. The answer can be received from the hour following your request, until 48 hours after, at the latest. The microcredits are also designed for economic emergencies.

First, you request it without even having to justify what you are going to use it for. Later, you credit your ID to prove both your identity and your residence, as well as your regular source of income. Next, they will evaluate your request and you will receive the confirmation or denial in a short period of time.

Microcredits for SMEs and the self-employed

If you want to obtain financing for a business or work project, there are entities in which you are offered another form of application with which you will get better conditions, lower interest rates and longer repayment terms. To get these microcredits, you must first present your business plan, which will be analyzed to verify its viability.

Later, you will have to submit the application with all the documentation that is required. Depending on whether it is a microcredit online or not, you could ask for a personal interview to explain your business idea.

Thereafter, your application would be evaluated, in whose process the experts of each entity would study and rate the viability of your project. This not only depends on you, but also on the economic conditions that are given at the time of the request. Depending on all these factors, they would grant or deny it. In case of confirmation, the microcredit will be formalized.

Why can you use a microcredit?

Why can you use a microcredit?

You can use a microcredit to finance a work project, as we have indicated in the previous section. But you should also know that you may use it both individually and as a group. There are microloans that help businesses that are already in operation. It is not always about starting, but sometimes they are used to boost a business.

An example can be the bar that does not have inventory and needs to be restored if you want to continue with your productive activity. There is also a branch that is designed for women’s projects, in order to facilitate and increase their presence in the business world.

However, microcredit does not exist only for business projects. You can also request one if you need personal financing for an unforeseen event, if you want to treat yourself or if you simply want to reform your home. There are many options available to you.

Do they have a good performance?

There are numerous studies that indicate that microcredits have given good results in the market with enough assiduity. Above all, highlights the period from 2002 to 2008. Later, with the economic crisis conditions could not be equally advantageous, but in these times we are returning to the results that occurred during the aforementioned period.

The interests are greater than those of a traditional loan, but its granting is much faster and less restrictive. These interests can be decreased sometimes if you have endorsement. However, as we have said, having an endorsement is not a requirement to get a microcredit and, in addition, not all entities offer this possibility of reducing interest if you guarantee it.

The result is that microcredit usually helps people who need urgent funding correctly. And that in the cases of business projects, having experts assessing their viability, they usually also give good results.

What are the advantages of microcredits?

What are the advantages of microcredits?

Microloans are one more financing option that you can turn to when you need it, just like with personal loans or credit cards. If an unforeseen event arises that you can not cover with your savings, a microcredit gives you the opportunity to pay for it very quickly.

The financing you need can be used for any purpose: school books, a repair, etc. Since the economic crisis, these microcredits have been the solution for which many families have opted to make ends meet. Therefore, microcredits have ended up becoming an alternative to solve the economic problems of many people, because now it is not difficult to get immediate liquidity if you need it.

In turn, now that we are in a period of economic recovery the microcredit is still very valid if you need fast money, being another of its main advantages that it has hardly any paperwork. Also keep in mind that there is the possibility of applying for microloans online. In this sense, we show you the advantages of online microcredits.

Main benefits of online microcredits

Main benefits of online microcredits

Online microcredits will allow you to combat specific liquidity problems. You can also finance personal projects that do not need a large amount of capital without having to ask for a loan in a traditional financial institution. The return of microcredits over the Internet can be very simple for you, both in terms of fees and in relation to deadlines.

And, if you are an entrepreneur and do not want to present a project, you do not have to. Although there are some that offer you this possibility, in exchange for better conditions, the presentation of a project is not a requirement for granting it. Another of its main advantages is that they have a lower interest rate than other financial products.

In addition, there are online microcredits adapted to the circumstances of each person. For example, those that are focused on young people. Your application process is quick, easy and does not require just paperwork. In turn, you can request them without even getting up from the sofa at home. The availability of your money will be immediate when they confirm your approval in a short time.

Online microcredits if you are in Financial Credit Institutions

Another advantage of online microcredit that deserves a separate consideration is the possibility of financing people who are in Financial Credit Institutions (National Association of Financing Entities), as well as in other reports of delinquency and consumption in our country.

The people who are in this type of lists usually have difficulties to request financing in the banking entities. However, in recent years the possibilities of online financing have opened the doors to all these users. If you find yourself on one of these lists, you can request microcredits online and solve your financial problems and responsibilities.

There are several types of microcredit that you can request when you are in Financial Credit Institutions or in a similar list. This will vary according to the return period and the amount. The most common are scholarships to study, mortgages or personal microcredits to attend family emergencies.

In short, microcredits are the main source of financing for many people today. If you need to cover a punctual expense, without a doubt it is the best way to get liquidity instantly and to be able to continue your life without stress of any kind.

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