What Can I Use Small Loans For
A loan can be spent whatever way you want, but it should be seen more as a temporary and emergency measure. You must be prepared to try to repay it as quickly as possible to free yourself from the debt.
Such a loan you can consider if you have an unexpected expense, say, your car broke down, you need to fix it, and you are still a week away from your next salary check or, for example, retirement payment.
Typically, small loans are characterized by high-interest rates, so they are not suitable for long-term loans.
How Do We Keep Our Small Loan Fees As Low As Possible
In Australia, the establishment and monthly fees for small loans up to $2,000 are legally capped at set limits, known as the cap.
Youll find most small loan lenders charge the highest possible fees as a matter of course, regardless of your credit rating, history or situation, even the ones who say they offer cheap small loans or low interest small loans.
At Fair Go, we dont think this is fair. As one of the biggest non-bank lenders in Australia, were in it for the long term, not to make a quick buck. Thats why we have tiered fees, based on your credit rating. The better your credit score, the lower your fees.
Our approach is not only fairer, but saves our customers hundreds of dollars in fees, potentially halving the cost of your small personal loan. Find out more about our tiered small loan fees.
How To Get A Loan Online
Pre-qualify. Check rates with multiple online lenders and compare offers to find the lowest interest rate. The pre-qualification process involves a soft credit check, which doesnt affect your credit score.
Select a lender and loan option. Pick the online loan with the rate, monthly payment, loan amount and term that best fit your budget and financial needs.
Collect loan documents. Upload the required documents, which may include a form of identification and proof of income such as a pay stub or W-2.
Complete the application and submit. Once youve read and understand the fine print of your loan, submit the application. Once approved, you may receive your loan within a day or two, depending on the lender.
Also Check: What Credit Score For Va Home Loan
Are Small Loans Guaranteed To Be Approved
No, we cannot guarantee any application will be successful. Each applicant is subject to credit and affordability checks first. This is to ensure the loan, no matter how small, is affordable and you are not in current financial difficulties. Whilst we do perform a credit check, we base our lending decision on your current finances and what you can afford to pay. Only then can we provide a lending decision.
Our Editorial Review Policy
Our site is committed to publishing independent, accurate content guided by strict editorial guidelines. Before articles and reviews are published on our site, they undergo a thorough review process performed by a team of independent editors and subject-matter experts to ensure the contents accuracy, timeliness, and impartiality. Our editorial team is separate and independent of our sites advertisers, and the opinions they express on our site are their own. To read more about our team members and their editorial backgrounds, please visit our sites About page.
Also Check: How To Pay Off Student Loan Debt Fast
What Is A Payday Loan
A payday loan otherwise known as a cash advance loan is a short term loan that is designed to act as a bridge to your next payday. As a result, online payday lenders will expect repayment in full typically within seven to 30 days.
This isnt a traditional loan that allows you to satisfy your debt through a series of monthly payments. These loans are often far more expensive than a personal loan.
You can expect to pay a finance charge of around $15 for every $100 you borrow, which can amount to an APR of over 400%. And some states allow interest rates much higher than that, as pictured in the following map :
If you cannot repay the loan on time, the lender may roll your debt into a new loan with a penalty charge and a higher interest rate. This can result in thousands of dollars in finance charges for a small loan of only a few hundred dollars and is why loan rollovers arent allowed in every state.
Thats why we only recommend a payday loan if you have no other option and desperately need money fast. These loans may not require a credit check for approval if you can provide proof of enough income to repay the loan on time. Still, this convenience comes at a high cost.
Even if you have poor credit, you may still qualify for a more affordable personal loan through the online lending networks listed above.
How To Apply For A Small Cash Loan
Below are the steps to apply for the loan.
- Just log on to loanbaba.com, choose Small Cash Loan as the product and fill up the required details and complete the steps. We will get in touch with you in case we need any additional information. On loan approval, you will receive the loan amount instantly in your bank account.
- You can also download our official Android Application now available on the Play Store for free. Click on Small Cash Loan on the home screen of the android application and complete the steps to submit the loan application.
- You may be required to link your social media profiles and verify net banking account so that we can process the loan faster.
- You can even re-apply for this loan after successfully closing the previous small cash loan taken. Re-applying will be much easier and quicker, you can get funds in as little as 30 mins.
- You can get in touch with the support team for any loan queries via the or by emailing your query to .
You May Like: How To Qualify For Bridge Loan
What Is The Difference Between A Small Loan And A Payday Loan
The main difference between a small loan and a payday loan is in the repayment requirements. A payday loan has to be paid in full when you next receive your wages. A small loan has a minimum repayment term of three months making it more flexible and sometimes more affordable than a payday loan. Keep in mind that due to the longer repayment terms can be a more expensive option in the long term than a payday loan.
What Credit Unions Offer Personal Loans
Your best bet for very low-dollar loans is going to a , a non-profit type of financial cooperative that provides traditional banking services. While you might need to join to qualify for a personal loancredit unions are member-owned organizationsthis is relatively easy and cheap to do and once you’re a member, youll be able to borrow what you need with a low APR.
Don’t Miss: How To Secure An Sba Loan
Which Online Loan Site Is Best
The best online loan site for anyone seeking an affordable loan is one you can trust. Its also one that offers the type of loan that best fits your financial needs. While that may seem obvious, too many people turn to the first online lender they come across and take their chances.
Its important to keep in mind that most online loan websites are not direct lenders, but are loan marketplaces that partner with a network of lenders. As such, the rates and terms are seldom advertised on the website, since they are determined by the individual lenders that ultimately make the loan offer.
The things you can learn from a website have more to do with reputation, length of time theyve been operating, actual customer reviews, etc. Its this information that will give you a start in deciding which online loan site is best for you.
Other things to consider when making a decision include:
- Do they offer different loan types?
- Do they operate in all 50 states?
- Do they list a range of APRs and loan terms available?
- Do they offer a secure online application with 256-bit encryption?
- Do they have an A+ BBB rating?
- Do they charge a fee to apply?
- Do they list their minimum qualifications or requirements for applying?
- Do they have a direct customer service number?
Finding answers to these questions will give you a good indication of which online lenders to trust, and which to avoid. Using any of the lenders weve recommended in this guide is a great place to start.
When Would You Use A Small Loan
A small loan could be useful in a variety of situations:
- Paying an urgent bill
- Medical treatment
- Home improvements
Because these loans are usually just a few hundred pounds in value and paid back over a few months, they are perfect for cash emergencies.
Saving for emergencies can be very challenging, especially when we dont see them coming.
MoneyHelper recommends saving at least 3 months of your monthly salary.
This can be hard to do with expensive living costs.
Using a low amount of short term finance means you can resolve the issue quickly and then repay the loan in a structured repayment schedule.
Representative 49.9% APR
Recommended Reading: Where Can I Get Instant Loan Online
How To Apply For A Small Loan Online
There are two ways to apply for a small loan online through a direct lender or a broker. Applying directly to a lender can be the obvious choice for some, but if you get declined and apply to even more direct lenders, your credit history may be damaged and hurt your chances of getting approved.
Applying through a broker like us is different. We have access to a panel of different lenders who specialise in a different type of customers. If one lender is not interested in working with you, another one might be. Hence applying with a broker like us improves your chances of being accepted.
Another benefit of using a broker like us is that you will be subject to a single credit check, and that is only if you decide to proceed with a full application with the lender most likely to approve your application.
Small Personal Loans For Bad Credit
When you are young, you dont often think about the long-term consequences of your decisions. When you took out your first small personal loan, you may not have been prepared to repay it on time. And if you failed to make those payments, your credit history suffered.
Small personal loans for poor credit are designed for consumers who have had issues with debt repayment in the past and are now grappling with lower credit scores. Even if you werent the most responsible borrower in the past, you still deserve a chance to receive financial assistance in times of crisis to help you start a fresh financial outlook.
However, many borrowers dont know where to look to get that emergency financial assistance. The majority of conventional lending institutions arent willing to deal with borrowers with poor credit because they see them as a risk. So, if you have poor credit, you may be wondering if there is a solution for you.
You can spend time often months or years repairing your credit so that you qualify for personal loans from the local banks. Or, for a faster solution, you can get small personal loans with bad credit on the web today.
Don’t Miss: Can I Pay Off Home Equity Loan Early
What Is The Eligibility Criteria For A Small Personal Loan
For starters, if you think that small loans online by Tata Capital require you to have an excellent credit score, it’s not true. Since this loan is customised for low-salaried individuals and new business owners, you can apply for one with limited or low credit history and have real chances of approval.
This relaxation on credit score often comes as a substantial relief for potential borrowers of small instant loans.
Other than this, you must fulfil the following personal loan eligibility criteria to get an instant personal loan from Tata Capitals:
The applicant must have a minimum salary of Rs. 15,000 per month.
They should be working for at least 1 year.
The ideal age of the applicant should fall between 22 to 58 years.
Get instant personal loan at Tata Capital if you fulfil these eligibility criteria. We extend instant loans to salaried professionals, housewives, pensioners, self-employed professionals, and more. So, if you have urgent financial needs to meet, get in touch today!
How Do I Find The Right Loan For Me
As with all short term loans, these types of little loans can be customised to your requirements giving you the freedom to choose how much you borrow and what kind of repayment plan you need. While most small loans often feature a fast repayment period, such as those offered by small payday loans, there are always exceptions.
Therefore, you should always look around to see which lender offers the best terms for you.
Don’t Miss: Can You Add Onto An Existing Loan
Best For A Lower Credit Score
Who’s this for? Upgrade loans approve qualified borrowers with fair or good credit, which makes it an appealing choice for those with a credit score that’s less than ideal. These loans are fast and easy to secure, and all the funds will arrive to your checking account within one business day of submitting the required documents. All Upgrade personal loans have an origination fee of up to 8%, which is deducted directly from your loan proceeds so if you know you’ll need $1,000, you should account for the origination fee and apply for a loan amount closer to $1,080.
Upgrade doesn’t have any repayment penalties, but it does have a late fee: if you pay late or miss a payment, you could be hit with a $10 late fee if your payment is not received in full within 15 calendar days of the due date.
And, like most of the other lenders on this list, Upgrade personal loans start at just $1,000, but qualified applicants can apply for as much as $50,000. Upgrade loans come with repayment terms of 24 to 84 months.
Best For Debt Consolidation
Who’s this for? offers personal loans for debt consolidation, among other purposes such as home improvements, weddings, vacations or moving costs. Marcus is an arm of Goldman Sachs and actually doesn’t have a physical location, so customers must handle all account openings and loan applications online.
When it comes to debt consolidation, some lenders may only send funds directly to your creditors or deposit funds directly into your account, however Marcus by Goldman Sachs provides even more options. When you’re approved for a Marcus debt consolidation loan, the company will ask if you’d like to use direct payments to send money to up to 10 creditors, ensuring the funds are actually being used to wipe out your debt. This also takes some of the hassle out of your hands since you won’t have to worry about manually sending each payment to each creditor on your own.
If this option works for you, you’ll need to provide your creditors’ account numbers and addresses as well as the amount or amounts you’d like to be paid. Marcus then deposits anything that’s left over into your connected bank account. Best of all, using this direct payment option comes at no extra cost.
Applicants can qualify to borrow up to $40,000 while term lengths vary from 36 to 72 months. Keep in mind the best way to qualify for an interest rate on the lower end of the lender’s range is to apply with the highest credit score you can.
Recommended Reading: How To Figure Out Loan To Value Ratio
Loan Response And Receipt Of Money
The first reply will be provided immediately after completing your application on our website. If the answer is positive and you are satisfied with our offer, you can also sign the loan agreement remotely right away.Whereas, if we need additional documents for assessment of your application, we will contact you. In this case we will give the final reply within one working day.
The money will be deposited into your account within 2 working days after signing the agreement.Swedbank clients will receive the loan amount into their bank account within one working day after signing the agreement, whereas clients of other banks within 2 working days.
No, we deposit the loan only into a Latvian bank account that is indicated in the application and belongs to the applicant.
What Types Of Small Loan Are Available
Whilst smaller, unsecured, online loans are quite common, they are not the only type of low value loan available.
Other credit options include:
- Lines of Credit
Whatever type of credit you are considering, make sure you fully understand what your obligations are and what the true cost of borrowing is.
How To Streamline Your Small Loan Application
First and foremost, theres no point in applying if your application is likely to be denied immediately on eligibility grounds. To qualify for a small loan, youll have to meet the following criteria:
- 18 years of age or older
- Australian citizen or permanent resident
- Earned a stable income over the past 90 days
Borrow within your means
Its always important to have an idea of the amount youre capable of repaying before applying to maximise your chances of success. You can gain a rough estimate of your disposable income by subtracting your expenses from your total monthly income.
As a general rule, your loan repayments shouldnt exceed a quarter of your disposable income.
Know the documents youll need
- Your passport, drivers licence, other valid photo ID or a combination of multiple
- 90 days worth of bank statements to show your income over that period
- Any Centrelink statements if applicable
- Proof of address via a recent bill
Dont make multiple applications
While applying for as many small loans as you can in the hope one pays off may seem like itd help you save time, what it actually can do is make it more difficult to be approved.Each application will show up on your credit file, so if youve been applying unsuccessfully multiple times in quick succession, lenders will be able to see that. Always focus on putting everything into your first application and, if its unsuccessful, work out where you can improve for next time.