SMS loan is one of the most popular small loan types in the world due to the convenience and speed of its application. If money is needed quickly to cover unexpected expenses, sms loan can be the right solution. Did you break the car and need repairs quickly? Was the washing machine broken and you need to buy a new one? Your favorite shop has a weekend pricing and a long sought after product? Would you like to go on a trip, but there is a bit of a travel allowance? Smslaen helps with various short-term expenditures and is good if you want a quick loan that won’t be on your shoulders for years, but the repayment time is only a few months. Sms loan, however, is distinguished by several factors from other types of loan, so it is reasonable to familiarize yourself with the features of an SMS loan before borrowing.All loans
What is an SMS loan?
Sms Loan Loan or simply Sms Loan is a type of unsecured fast loan that is characterized by the process of applying for a loan via a mobile message or SMS. To receive a loan, you must send a message to the lender and the money will be credited to the applicant’s current account almost immediately. It is only possible to get a loan by phone if the applicant already has an account opened with a particular lender, which has received a positive loan decision, ie the loan limit has been opened for the applicant.
Sms loan should also not be confused with quick loan. The best way to distinguish between sms loan and quick loan is as follows: all sms loans are quick loans, but all quick loans are not sms loans. You know the Sms loan by being able to apply for a loan by mobile message, the normal quick loan application is done only through the web portal.
One of the biggest features of SMS loans compared to other types of loans is the higher interest rate. Since the loan repayment period is short and the loan is not secured by the assets of the borrower, the lender smslaen higher risk for the lender and thus dissipates your risk of higher interest rates. However, the interest rate on a sms loan is not significantly higher than that of a regular loan, and as a new customer, there are often promotional offers that allow you to borrow at additional costs close to zero. The golden rule also applies: the sooner the loan is repaid, the less interest is payable.
Who can apply for a loan?
To apply for an Sms loan, the loan applicant must meet certain conditions. In most cases, the applicant must meet the following requirements:
- The applicant must be at least 18 years old (minimum age for some loan companies is higher) Estonian citizen or person with permanent residence permit. Sms loans do not usually have an age limit because the repayment period is short;
- For the first time, the applicant must undergo a personal identification at the Omniva post office or the lender’s office;
- The Applicant shall not have any payment defaults in the Credit Report;
- The applicant has a personal bank account – the loan amount cannot be transferred to a bank account on behalf of someone else. Some lenders can make a loan in cash, but for the most part it is only possible to get a loan to a current account. This is necessary to prevent fraud and ensure security.
Often the applicant’s financial situation is not thoroughly checked and only Krediidiinfo’s data, which proves the absence of payment defaults, are sufficient and sometimes proof of income is also required. However, when applying for a sms loan, you should remember that even if you have an account with the lender, you may not be able to get a loan if you have a Krediidiinfos payment default entry in the meantime. The lender will check the solvency of the applicant each time to verify the applicant’s ability to pay.
How can I apply for an SMS loan?
Applying for a loan is done in exactly the same way as for other loan types. Although it was possible to apply for money by a message ten years ago without special contracts and unconditional terms, nowadays sms loans are secure and similar in application to all loan products. Therefore, sms loan is as safe as a consumer loan or a quick loan, but in case of fast cash demand it is possible to get the loan amount faster than it would be in case of consumer loan.
In order to apply for a sms loan, you must submit a standard loan application, fill in all the necessary fields in the application form and, if necessary, submit your income statement, ie a bank account statement. The lender then reviews the employee’s application and makes a loan decision. There is usually no need for a salary certificate at the time of application, but a bank statement is mandatory almost always. This is necessary to prevent the loan being given to a person who has no income. Only Krediidiinfo data may not provide the lender with enough information to prove that the applicant is a solvent person.
In case of a positive loan decision, you have to go through the identification. For this, you need to go to either the Omniva post office or the lender’s office, where you need to submit an identity document. This will take only a few minutes and then you will have a credit limit with your lender. The personal identification procedure is important to prevent fraudsters – so you can make sure that the borrower is the one who claims to be.
If you have a credit limit open, you can use that amount at any time just as you want. For example, if your personal loan limit is € 500 but you need € 100, you can apply for € 100 via SMS. The remaining € 400 will remain at your limit and you will be able to use it once your loan has been repaid and you need money again.
If you take the money several times and always pay back the loan amount on time, your loan limit will also be increased – you become a loyal customer. Sms loans in this form are similar to credit accounts and virtual credit cards and allow you to flexibly manage your financial affairs.
If your loan application has not been accepted, the most common reason is insufficient solvency. Even if you do not have any payment defaults, the application response may not be positive if your income is too low to cope with loan payments. For example, if your six-month average income is € 300 and you want to borrow € 600, with a monthly charge of € 150, it’s likely that you won’t get a loan because your loan payment would make up 50% of your income. According to the usual rule, the loan amount should not exceed 40% of the applicant’s remaining available funds, ie if you have more than 200 euros per month after covering all monthly expenses, the loan payment should not exceed 80 euros.
How Much Can You Borrow Money With an SMS Loan?
The loan amounts are usually lower than in a regular loan
The Sms loan is almost always in the range of € 50 – € 1000, sometimes up to € 2000 – € 3,000, but it is not possible to borrow more than € 300-500 for initial lending. After the timely payment of the first loan, the borrower becomes a loyal customer and a larger loan limit is opened, which can then reach a thousand or even several thousand euros. It is not possible to borrow less than 50 € from any loan company, as well as remember that it is not possible to borrow 50 euros for a long time. The higher the amount, the longer the repayment period you can apply for.
Sms loan also differs from other loans in terms of additional loan costs. Because sms loans are very flexible and fast, these are the main products for lenders that are issued to new customers. Therefore, the extra costs of sms loans are close to zero to rejoice new customers. For some loan companies, the loan contract fee is only € 1, some do not have any surcharges, and the lender has to pay only the specified interest.
If you take a sms loan for a short period of time, the amount of interest is also remarkably small: for a 5-15 day loan, the interest is just a few euros. That is why smslaen is one of the best solutions when the payday is still far away, but money is urgently needed.
Suitable for short-term needs and for solving smaller money problems
Having a loan for a longer period of time, the amount of interest is also higher and can be overwhelming. A fast and flexible sms loan is designed primarily for people who have an unexpected outflow and who can be sure that they will not be able to repay the loan.
The sms loan amount also accrues relatively quickly, depending on the time of sending the message and your and the lender’s bank. If the message is sent to the lender during the business hours and both parties have a current account in the same bank, the amount will be credited to your bank account within 15 minutes of sending the message! Loan applications and messages can be sent around the clock, but as loan applications are reviewed only during the working day, the lender’s working hours should be monitored. In some cases, the loan can even be on Sunday: if the lender looks through the applications over the weekend and both have an account with the same bank, you can get a loan even on the weekend, so you can get quick cash troubles right away without having to wait several days.
SMS loan repayment
The repayment period for an SMS loan is usually short: 5 days to 6 months. For some lenders, the repayment period is 30 days to one year, but most typically the maximum repayment term is half a year. This can be explained by the relatively small amounts of loans – sms loans do not reach more than 1000 euro, so a longer period than 6 months is not necessary. Lenders who lend a few thousand loans allow the loan to be repaid over a longer period, but this should take into account the fact that high interest rates go hand in hand with a long period.
The loan can also be repaid early
You have to make a separate statement for this and the lender has to pay interest only for the days when the loan was in your possession. So you pay back less than you originally agreed. Early repayment will not result in any contractual penalties or additional costs.
If it is not possible to repay the loan for a specified period, it is possible to extend the loan period. The terms of the extension are different between the lenders, but usually the loan period is extended by 15 or 30 days. An additional fee of twenty euros, depending on the individual lender and the amount borrowed, must be paid for this operation. In some cases, loan extension is free.
If it is not possible to repay the loan even after the expiration of the extended period, you should definitely contact the lender, not avoid the worry. It is always possible to make a payment agreement that would allow you to pay the loan amount correctly. So if you get stuck with the payment or the expected income didn’t come to you, contact the lender and talk about the worry. There is always a solution for every situation!
Sms loans are tempting thanks to the speed of loan receipts and a convenient application process, but it should also be kept in mind that the loan obligation should not be taken lightly and the loan should only be applied if you have a stable income and sufficient funds to repay the loan on time. Delaying the repayment of the loan amount may result in additional interest, debt bill costs, and later court fees, which may result in a small loan becoming a major financial burden. The loan decision should always be carefully considered and the amount of the loan and the repayment period appropriate to the solvency should be chosen.
You shouldn’t be afraid of a loan
Over the past few years, the loan market has been adjusted by law and lending has become secure. There is no longer any risk that the issuer of an SMS loan is a fraudster or collects data from applicants for the implementation of evil plans, because the SMS loan can only be issued by companies approved by the Financial Supervision Authority and for whom an authorization has been issued. That’s why sms loans are secure and a good help in critical situations.