What is a flash loan?

A flash loan is a loan for a low amount and with a very short duration. Think of a loan of a few ten to several hundred euros. The duration is a maximum of 3 months.

Advantage of a flash loan

The biggest advantage is the speed with which you can arrange the loan. Within a few minutes you can apply and a few minutes later you have the loan amount on your account. Another advantage may be that a number of providers of these flash loans do not carry out a BKR check, and therefore you can also apply for a mini loan with a BKR Registration from these lenders.

Disadvantage of a minilening

The costs associated with this form of borrowing are often much higher than with a personal loan or revolving loan. Although providers of such loans must comply with the legal requirements, they do not all do that. They charge extremely high percentages that can reach more than 30% per year.

Flash loan and the AFM

Until May 2011, providers of mini-loans and flash loans could proceed undisturbed because they fell outside the supervision of the AFM (Financial Markets Authority). From that date, legislation has been tightened and providers of short-term loans must also comply with these conditions. For example, they may charge a maximum of the statutory interest plus a surcharge percentage of 12%. That is a maximum of 15% in total.

Loan tip

If you need a small amount quickly, a loan loan or mini loan can be a solution. But think carefully whether you can and do want to pay the extra costs before you take out such a loan.