The loan figures that you have previously been able to read about here on the site have been about slightly smaller sums. Now that we have come up with loans of USD 10,000, we have also started to approach the threshold between micro loans and the classic private loans.
Here we will therefore look at both alternatives. If you want to get a quick idea of the costs, you can look at the bottom of the page as we compare the costs for both micro loans and private loans.
Micro loans – Large but possible
When the first version of this article was written in 2009, there were no lenders who offered their customers micro loans of USD 10,000. The highest sum then was around USD 5,000 and very few offered it.
But as this form of loan has developed, lenders have also emerged where it is possible to take a micro loan that is so large. The big difference compared to private loans is the maturity. Here we no longer talk about years, but instead it is the question of months. Most common on large micro loans is a maturity of 60 or 90 days. This means two or three repayments. Therefore, expect to be able to repay USD 3,333 or USD 5,000 per month, to which is added the interest cost. Which is pretty high on large micro loans.
Borrow USD 10,000 – Private loan
When you want to borrow USD 10,000, a private loan is perhaps the best option. Private loans or lent loans that they are also called are simply the word that describes loans that are normally between USD 10,000 – 350,000. A private loan is also a loan that is unsecured.
If you want to read more about unsecured loans and what it means, you can do this here.
Very short, security means that the lender cannot repay anything as payment unless you are able to repay the loan. For a mortgage, for example, the home is a security. This means that there will be a greater risk for the bank and thus you often have to pay more in interest.
When it comes to the maturity of a loan of this kind, you can expect at least one year but also that there are good opportunities to repay the money of up to five years. The rules are a bit different among the lenders.