The risks of small loans include: 1, and the loan cost is high. Because the application threshold of small loan companies is low, the loan risks they bear are naturally relatively large, so the interest charged will be higher than that of banks; 2. Lending institutions may not be eligible for loans; 3. The collection means of the lending institution may be illegal.

legal ground

Article 667 of the Civil Code is a loan contract in which the borrower borrows money from the lender, repays the loan at maturity and pays interest. Article 668 of the Civil Code provides that a loan contract shall be in written form, unless otherwise agreed between natural persons. The contents of a loan contract generally include terms such as loan type, currency, purpose, amount, interest rate, term and repayment method.