If you are searching online trying to find information on securing a small loan it can be difficult to know which one to go for and what the process will entail. We will walk you through some suggestions on what to think about before you apply for a small personal loan.
We will cover:
A small loan as the name suggests is generally for £1500 or under. This means that there will be a lot of difference in rates and repayment terms depending on the lender that you go with. They are designed to be quick and easy access money for emergencies or for something where you need the funds straightaway.
This is very similar and almost identical to how the term “payday loan” was coined. Essentially, the best way to use both payday loans and a small personal loan is to bridge the gap between the money that you need now and your next paycheck.
The pros of a small personal loan is that normally you will find it very easy to access the money, this is because it is a relatively small amount.
The cons or the downside of a small personal loan is that in most cases you will need to pay the money back within a few months to a few years, the rates can also be higher because you are borrowing a smaller amount of money over a shorter time period. This essentially means more risk for the lender.
Bear, in mind that every lender is different, and it will depend on your credit score as well as the individual criteria for the lender.
A small personal loan is essentially alone that allows you to get access to funds that you need, super quickly and with a convenient way to pay them back over a short period of time.
There are a few things that you need to look at pertaining to the loan to make sure that you understand your rate and how long it will take to pay back.
This is one of the most important things that you need to consider, this essentially will be the amount of money that you need to pay the loan back. Most decent lenders will give you a complete breakdown on the screen of the payments that you will be making and how long for. For instance, here at MoneyPig, we give you a complete breakdown when you apply, this means that you will not have any confusion around the rate and the amount that you will be paying back.
This stands for “annual percentage rate”, this is a great way of looking at different loans if you are looking to compare. You will find that the least expensive loan will have the lowest APR.
You will be assessed on your credit score and the lenders individual criteria. The main thing to remember here is that with the credit score you will want to make sure that you have a rough idea of your personal credit score. One of the best ways that you can do this is go over to Experian, even with the free account it will give you some idea of your credit score.
Bear in mind that this is the Experian rating, no matter what rating you get here it will be different depending on the criteria that the lenders are looking at.
You should also have an idea of the borrowing requirements made available to you and that can determine your likelihood of qualifying for a loan.
This is talking about how long you need to pay the loan back; this is essentially the repayment terms. Depending on where you are borrowing the money and how much, you will have different terms put forward and you will find that the longer you borrow the money for you will pay more interest. Ideally you want to try and find a term that keeps the payments relatively low and allows you to pay off your debt quicker.
The good news is that if you qualify for a small personal loan, with most lenders you will be able to get the money within a few days or even on the same day. This will vary depending on the lender but if you make sure that you have a good look at the terms you will normally find that it is relatively quick. This is essentially because you will be getting a small personal loan.
Make sure you have a good look at the above factors before you agree to any loan, and it will tell you at a glance everything that you need to know.
The good news is that there are more places than ever to be able to secure a small personal loan. The downside of this, is the choice! As there are many places it also means that you need to do your homework and work out which will be the best choice for you.
We will start with the recommended choice and then walk you through some other choices that you can have a look at as an alternative.
This is the most popular way to secure a small personal loan. As we explored above, you will be able to see all of the information that you need and can take as long as you want while filling in an online application. You are also able to check out reviews of the loan company at your leisure, as well is work out how much money you need in your own time.
The main benefit of an online loan provider is that most of the good ones will compare the best loan options for you, so you are able to see what is out there and available. By comparing some of the best choices you know that you are far more likely to get the best rate for you.
Of course, we provide a loan service here at Money Pig, which will compare you to some of the best options and make sure that you get a loan that is affordable and right for you.
The good old-fashioned way is to secure a loan at a bank. This is the most common method; however, you must bear in mind that with a small personal loan it can be harder to secure the funds. You will normally find if you are borrowing more money that banks have more options available to you.
In recent years, some banks have ventured into small personal loans, and it can be worth having a look if you want to try this option.
For instance, Wells Fargo will offer short-term, small loans of up to $500 dollars. These will normally be paid in three monthly instalments, for more information you can click here.
This may be another option for you but bear in mind that a credit union will look at different criteria than a standard bank to see whether you qualify for a loan and to determine the rate. You can sometimes find alternative loans at credit unions.
We highly recommend the before you apply for a loan you think about the following:
Think about the loan amount that you are looking to apply for. We highly recommend having some idea of the usage for the amount. As this is a short-term small personal loan, you will normally find that the repayment terms will be over a shorter period. If you make sure that you know exactly how much you need to borrow, it can also help to have a few different amounts so you can compare some of the repayment rates.
It is a very good idea to review any existing debt. No matter where you get a loan from existing debt can sometimes affect your credit score. Make sure that you also have a think about your debt-to-income ratio, this is where lenders will be able to see how much of your income goes to debt repayments. They will normally assess this as part of their criteria.
Remember, having any existing debt does not exclude you from being able to secure a loan in most cases but it is a good idea to work out affordability.
As we here at Money Pig, make sure that you have a good look at a loan company that will compare with some of the best options for you. This will give you an idea of different rates and it also ensures that you are able to get a loan that will work for you without being tied to just one set amount.
As long as you have a good idea of the loan amount that you need, any existing debt and you are using a loan application that is able to compare with the best lenders you will be able to get available options and have the best chance of securing a loan that will work for you.
Once you have been through the above steps you will be a really good position to be able to secure the loan that you need and have the best chance of being approved.
Have a look at the options above and pick where you would like to apply for a loan, we recommend getting started with an online loan service that you trust.
As we mentioned above, make sure that any online loan service that you are applying with gives you a complete breakdown, so you are able to see all of the details.
You can of course use the other options such as a bank or a credit union.
We hope this has given you some information on how you can obtain a small personal loan in 2022.
If you would like to have a clear idea of how much you can borrow, competitive rates and a quick and easy decision you can apply here at MoneyPig by clicking the link below: