What are microcredits?
Today we want to introduce you a little more to Microcredits or «Payroll Advances», a concept that is still somewhat new in our country. It is often confused with other financial services or the needs it can cover are not well identified, so we are going to explain where they come from: Microcredits, also called microloans or fast loans, are a practical product that provides a solution to a specific problem of lack of liquidity (a breakdown, a fine, a spill, the electricity bill, the mobile or any other unexpected expense) in a fast and easy way.
This product is designed for people who value urgency and flexibility and it has been in developed markets (such as the United Kingdom or the United States) where they have established themselves as a real alternative for many situations. In English they are called Payday Loans whose literal translation would be «Payroll Advances». They are personal loans of a not high amount (between € 1 and € 500) that are repaid at once in a maximum period of one month. The interests or fees are mainly linked to the costs related to the management of the loan (payment of transfer costs and other bank commissions, unit cost of the customer's credit assessment, etc.). Its main advantage lies in its speed and the application process is simple, without cumbersome procedures or explanations to third parties: A phone call, an online management or an SMS message, will be enough for our application. Anyone can apply for these quick loans , you just need to have a checking account to be able to pay the requested amount and not be part of any "list of defaulters" such as ASNEF from Equifax or Badexcug from Experian. The most generalized use that is given to mini-credits is usually as an emergency measure in the face of expenses that require immediate liquidity and whose financing cannot be resolved through other conventional means, such as an unforeseen expense or an opportunity that does not it can be missed (like booking a plane or paying a fine on time, for example).