An advance loan is a short-term loan of a maximum of € 500 to € 1500 and was originally intended to serve as an advance on the salary at the end of the month. Once the wage payment has been received, the advance must be repaid, including administrative costs. However, an advance loan can also be used for other purposes, such as unexpected setbacks such as repairs of washing machines and cars, but also for the purchase of offers such as new LCD screens or down payments for holidays. The big advantage of an advance loan is that it can be applied for and assessed quickly and easily. Unlike regular loans, no BKR assessment is carried out.
Borrowing costs money. You pay an interest payment for borrowing the money and you must also repay the borrowed amount at a given time. The advantage of borrowing is that you are given the opportunity to solve unexpected problems (for example Damages) and to realize fun things quickly (buy a new motorcycle, for example).
The internet has changed the entire loan market: where traditional lenders used to dominate the market and market transparency was minimal, consumers can now request quotes for free and without obligation, compare interest rates with each other and no longer depend on local advisors, but one can do business nationwide. Research has shown that the differences between traditional lenders and online lenders are large, there is a lot to gain for the average consumer due to differences in interest rates and additional costs. Sometimes there are thousands of euros that can be saved by asking for the cheapest provider. The Consumers’ Association also advises to request several non-binding quotes in order to have better comparison material. We also advise you to request multiple quotes.
In addition to the legal conditions that lenders must set, there are additional conditions for borrowing money; however, these differ from money provider to money provider. Overall, at least 95% of the ‘small print’ is identical. One of the most important elements of the conditions for granting a loan is the assessment at the Bureau for Credit Registration (BKR), where all current Dutch loans are registered as well as their (repayment) payment behavior. If a consumer has a negative registration with the BKR, the chance of being able to take out a loan becomes very small. Read more about borrowing conditions here and about BKR conditions here.
When purchasing goods, you often have the option of taking out financing for this. Although this seems easy, the loans are often expensive with high interest rates and administration costs are often charged. Make sure you request at least 1 alternative quote to be able to evaluate the seller’s offer.