Quickly borrow money  via internet or SMS and have the amount in your account within seconds. You call this type of loan flash credit. It seems attractive if you need money just as quickly, but in practice it appears that there are very high costs involved. In addition, you are not sure whether you are dealing with reliable parties.

What is a flash credit?

A flash loan is a loan with a short duration (15 to 45 days) and a relatively low loan amount (usually 100 to 800 euros). These loans have been offered in the Netherlands since 2007 and were primarily aimed at people with acute money shortages or people who were difficult to take out a loan with the bank because of a BKR listing. BKR testing did not take place with regard to flash loans and you could have access to the money relatively quickly.

Since 2011, however, flash credit providers have been subject to the supervision and rules of the AFM. This means that all flash credit providers are obliged, among other things, to take a BKR test before they grant a loan and they may not, for example, charge advisory fees for the loan.

Pay attention! This does not mean that all providers are also licensed by the AFM. The AFM does supervise these providers.

Flash credit costs

Because the duration of a flash credit is short and the loan amount low, the interest rates that you pay are high. Usually the interest rates for flash loans are around 15 percent! This is the maximum legal loan interest that is permitted for a loan.

Administration and consultancy costs

In addition to the interest costs, the flash credit providers charge many other costs, making these mini loans very expensive. For example, you often pay extra for additional services, such as drawing up a quote and processing the request. You also sometimes receive mandatory advice about the term life insurance. This advice costs 19 to 143 euros depending on your loan amount.

Warranty statement

Flash credit provider Saldodipje.nl also requires you to provide a guarantee. This can be done by, for example, a friend or family member who wants to guarantee your loan. But you can also ‘buy’ a guarantee through the company Global Guarantee. With a loan amount of 100 euros and a duration of 15 days this already costs 22.43 euros. That amount can go up to 242.19 euros with a loan of 800 euros with a term of 45 days.

Flash credit – Alternatives

Because a flash loan is a very expensive form of borrowing that involves many extra costs, it is smarter to take out a loan at the bank, for example by taking out a personal loan or  revolving credit  . By comparing well in advance, you know for sure that you do not pay unnecessarily much, unlike the flash credit.


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