What is an express loan?
The express loan gives borrowers the opportunity to overcome short-term financial bottlenecks. In everyday life there are always unforeseen situations that require quick credit. The fridge breaks down, the car has a breakdown or there simply isn't enough pocket money for a much-anticipated vacation. If the financial situation does not allow for a timely payment of outstanding amounts, the express loan can be the perfect solution. In this guide we explain how an express or emergency loan works and how it can be applied for.
What distinguishes an express loan?
Normally loans take a relatively long time until applications are processed and the loan amounts are ultimately transferred. In most cases the loan request involves a detailed check of the Schufa data to verify the borrower's creditworthiness. For long-term investments such as a house, a car or an apartment this is no problem, but when things need to happen quickly, the express loan is the perfect solution for the customer. The express loan is sometimes also referred to as an emergency loan, instant loan or quick loan due to its short-term availability.
- Short terms
- maximum limit of €5,000 (as a rule)
- quickly available
- fixed interest rate
- uncomplicated processing on the same day
- Only available to consumers (personal loan)
How does an express loan work?
Everyday life is becoming increasingly hectic. It can happen quickly: an invoice remains unpaid longer than planned, the car's maintenance is overlooked in the hustle and bustle and shortly afterwards a major repair is needed. Right then many people find themselves in a tight financial spot, because if there are no reserves but the car is needed to get to work, the question arises:
How do you finance an unexpected bill at short notice?
The solution is obvious and is now used by many banks and credit institutions. The express or emergency loan fills exactly this gap and provides quick relief for financial bottlenecks.
Express loan is made up of the words express and loan. A certain sum of money should therefore be available within a short time. For this reason the application for a short-term loan can be completed within a few minutes. The MAXDA loan without Schufa also falls into the category of express loans. From the online application to the disbursement of the loan amount, ideally only a few days pass. The entire process is simple and fast:
The loan application: In the application form all requested data for the loan must be entered. This information serves as the first contact with MAXDA. Questions are asked here about address, age and the desired loan amount, but of course also about existing income.
The current financial situation is particularly decisive for the further processing of the express loan. The borrower must be able to repay this instant loan within the desired term. At the same time it is an important concern of MAXDA that the amount of loans granted does not overstretch the financial possibilities of the borrowers.
In addition to some information on employment status and the resulting monthly income, monthly expenses and obligations must of course not be missing. Only if all information is complete and entered as requested can the online application for the emergency loan be processed quickly and without further queries.
Submitting the loan application: Once all data has been truthfully entered into the application form, the borrower only needs to click "Submit application". MAXDA immediately receives a notification and the loan application is processed. In most cases all relevant key data is checked within a short time. If there are further questions, applicants are contacted personally by an employee to smoothly complete missing data.
Disbursement of the express loan: If the express loan is approved, the loan amount is disbursed at short notice. The instant loan can, for example, be paid out via instant transfer within a few seconds. When finances are tight, the express loan is the perfect solution.
Repayment of the loan amount: Naturally, after a successful loan application there comes a point when the repayment of the monthly installments must be made. In most cases the installments are debited on the 1st or 15th of the month, as the majority of borrowers receive their salary on these dates. Many banks now also offer individual debit dates and adapt even better to the customer's wishes.
Who is an express loan suitable for?
In principle an express loan is not tailored to a specific target group, because anyone can experience a temporary gap in their household budget sooner or later. Nevertheless the instant loan is only available to private individuals who want to use the money to fulfill a long-cherished wish or, for example, to pay an outstanding bill. A refinancing of an expiring loan is also possible in some cases by taking out an express loan.
It is important that a regular income exists that allows the quick repayment of the loans. Thus students, pensioners and housewives are also able to apply for an express loan. Only a regular income must be present. Many banks, for example, already accept a monthly income of €500 net. Other credit institutions may have higher thresholds; it depends on the individual case. A comparison of different banks and offers can be worthwhile here.
Is an express loan also possible without a Schufa report?
You need to understand what is meant by a loan without Schufa. Because even with a loan without Schufa, the lender must inform themselves about the borrower's creditworthiness before a loan is approved. Therefore a query of the Schufa score — or a query at another scoring agency — is carried out by the credit institution. However, when approving an express loan this credit is not recorded with Schufa. As a result, there is no deterioration of the borrower's current Schufa score for the borrower.
There are certainly companies that also grant consumer loans without a Schufa report. Consumers should avoid such offers, which are to be judged as rather dubious. If the customer's Schufa entries lead to a rejection of the express loan, the financial situation may even be so strained that repayment is hardly to be expected. The emergency loan is intended to provide short-term financial relief. If it were granted despite a negative Schufa, it would more likely lead to further indebtedness of the customer. This must definitely be avoided.
MAXDA's express loans are only granted after prior verification of the Schufa score in order to protect both borrowers and lenders from unwanted hurdles. With the MAXDA loan without Schufa, however, the customer's Schufa account is not burdened, as the loan we grant is not recorded with Schufa.
What is the maximum loan amount for an express loan?
Conditions for express loans vary widely when different providers are compared. Comparisons are important to find the best conditions for your needs. To compare emergency loans, all conditions must be presented transparently. Generally an express loan refers to an amount between €500 and €5,000. Within this range personal loans are referred to as instant loan, express loan, emergency loan or quick loan. Due to the low amount of loan sums the risk for banks is kept within a manageable range. Of course, however, almost every German bank still obtains a Schufa report to check the applicant's creditworthiness.
It is also important to know that people looking for an express loan tend to be in a situation that has arisen spontaneously. For this reason these emergency loans are limited in amount so as not to worsen the borrower's situation further. Fair and transparent handling is therefore an important quality feature for a professional provider of express loans.
What are the interest rates for an express loan?
The level of interest rates depends on the credit institution where the express loan was taken out and, of course, on the current market situation. Since an express loan is a very short-term small loan that is repaid within a few weeks to months, interest rates are usually somewhat higher to make issuing express loans attractive for banks. At the same time, since the sums are relatively small — between €500 and €5,000 — the costs for the higher interest rates remain manageable. It is best for the borrower to conduct a comprehensive express loan comparison in order to compare the best conditions and the best services.
Does the agreed interest rate remain the same over the loan term?
Different loans have different terms. The longer the term of a loan, the more likely it is that new interest rates can be negotiated after a set period. The interest rate is based on the key interest rate or the current market situation. If a loan is concluded at a particularly high interest rate, this can be advantageous if, at the time of renegotiation, interest rates are lower. An express loan can possibly be used for refinancing in such cases.
For an express loan there is a fixed interest rate over the entire duration. Since instant loans usually have fairly short terms, the bank can guarantee a fixed annual interest rate. In general, very small loan amounts are repaid after 30 days. Other small loans run, for example, 3, 6, 9 or 12 months.
Disbursement of the express loan
How is an express loan without Schufa disbursed?
Providers that enable instant loans without Schufa are usually based in other European countries. For German banks, the Schufa report has now become a routine step in the entire application process. If there is a negative Schufa scoring, taking out a loan in Germany is almost impossible unless the necessary collateral or even appropriate guarantors are provided. Express loans without Schufa usually also have a very short term, which is calculated according to individual specifications. Sometimes the disbursement is made in cash at the respective credit institution, sometimes the money is delivered directly by post in a neutral envelope. Repayment works the same way. Borrowers with an express loan without Schufa therefore have to go to the bank for each installment or send a letter with the required amount. When it comes to instant loans, there are certainly also bad actors in the industry, so consumers should always be on their guard and carefully examine and compare the offers.
At MAXDA we work exclusively with reputable German and European credit institutions to always offer our customers an affordable and suitable offer. We rely on many years of experience, fairness and always transparent and comprehensible conditions.
How long does the disbursement of an express loan take?
This question cannot be answered in general, as it depends on several factors. In principle, however, loan applications for emergency loans are processed very quickly. Since loan amounts for an express loan are mainly applied for from a financial emergency, it is particularly important to keep the form processing times as short as possible.
After applying for the money, it usually takes a few hours to receive feedback from the bank. If the answer is positive and the express loan has been granted, a short-term and uncomplicated disbursement can take place. The amount of the monthly installment is derived from the desired loan amount and the term, as well as the annual interest rate. Depending on the contract, special repayments can also be made.
If the customer chooses instant transfer as an additional feature for the transfer of funds, the money can be in the applicant's account on the same day. In particularly difficult financial situations, there is often no alternative to the express loan.
However, if data is missing from the loan application or was accidentally entered incorrectly in the application form, this can lead to delays in the disbursement of the loan amount. Sometimes additional forms must be submitted. Often it is enough to scan the required documents and then upload them or send them by email to the responsible banker. Originals can then be submitted by post at leisure. Normally processing for an express loan should take a minimum of 1 and a maximum of 5 days.
Why can the disbursement of an express loan be delayed?
As mentioned above, there are some factors over which MAXDA has no influence. If data was submitted incomplete or incorrectly, or if obtaining important documents takes too much time, the disbursement of the instant loan can be delayed. However, processing is usually quick so that the customer can soon breathe easier financially.
Expired identification documents (ID card, passport) can also lead to loan inquiries taking considerably longer than planned. Once all questions have been clarified, the funds can be disbursed quickly.
All data is verified to grant the express loan. This often takes place via the Post-Ident procedure. This of course also requires a certain amount of time. Many banks also have a time threshold. For example, they may decide on the emergency loan application on the same day if all documents are submitted correctly by 2 p.m.
Repayment of the express loan
How can the express loan be repaid?
In principle the emergency loan is repaid in the same way it was taken out. In most cases the loan amount is transferred to a desired bank account so that the borrower can access it immediately.
Depending on the agreement, the monthly installments must either be transferred manually or debited by the lender. This is the usual method of repayment.
As already mentioned in the first part of the article, companies that offer express loans without Schufa often prefer a personal handover of the money or sending the loan amount by letter. In this case repayment would also have to be made in person on site or by letter.
Are special repayments possible for the express loan?
Although the possibility of special repayments depends heavily on the requirements of the lending institution, in most cases it is possible to repay the express loan early with special repayments. In contrast are larger loans and mortgages that run for 20, 30 or 40 years and are subject to corresponding interest calculations. For these loans a prepayment penalty is charged. This compensates the banks for losses due to the shortened loan term.
How to recognize a reputable provider of an express loan?
In most cases reputable providers are easy to recognize by their transparent way of working. Nevertheless there are always bad actors in the financial industry who deceive consumers and lure them with dubious contracts. A reputable provider has the following characteristics:
- Schufa check of creditworthiness -> Can the borrower afford the repayment?
- Transparent loan conditions -> Can the consumer easily find and understand all information?
- Maximum limit for express loans -> The lender thus assumes responsibility and prevents the borrower from becoming over-indebted
- Flexible conditions -> The express loan contract can be individually adapted and optimized
If you are still unsure which provider to work with, you can either contact a consumer protection agency or leave the selection to an independent financial service provider. They are able to compare the most important contract conditions and thus obtain the optimum for the borrower.
Are there alternatives to an express loan?
Of course there are many alternatives to an express loan. If the household budget unexpectedly gets out of balance, there are various options to compensate for this:
Personal loan
If there is someone in the family who has a larger sum of money, a private loan can be arranged. Family member 1 lends family member 2 the desired amount and gets it back after an agreed period. Of course there are hurdles here as well. The threshold to ask a family member for a loan is relatively high. If there are problems with repayment, the family relationship can suffer. Taking out a private express loan should therefore be carefully considered.
Overdraft as an express loan
The overdraft is an express loan granted by the bank. Depending on the credit limit, the bank customer can overdraw their account and thus use the bank's service when needed. Unfortunately, very high interest rates often apply to this variant, often between 12 and 15%. If the account is overdrawn too far, high fees and interest can result. Unfortunately, the overdraft is a vicious circle for many people. Once in the red, it is difficult to get out of that situation again by "saving".
Private money lending
Everyone surely knows the term "loan shark". This usually refers to unscrupulous providers of financial services. The interest rates are very high and the collection methods of such providers are more than questionable. It is therefore not advisable to use such a service.
Why the express loan is the best solution for most situations
The express loan is ideally suited to bridge financial bottlenecks, whether such a bottleneck arises from a short-term purchase or from refinancing or repaying an existing loan. Before the borrower borrows money from family or simply overdraws their account, it is much better to perform a loan comparison. This way the conditions can be easily compared.
The express loan is a quick and uncomplicated solution for those who spontaneously need a certain amount of money. It is very easy to apply for and requires hardly any waiting time until final approval by the credit institution. Repayment of installments can be agreed flexibly, while the amount of the monthly burden is individually adapted to the borrower's financial possibilities. MAXDA offers a convenient online form to apply for the express loan.