What Are Small Loans?
Small loans are designed to help you tide easily and quickly over small and urgent expenses that come up when you least expect them. Do you need to make some home repairs? Or is it paying off bills and some pending payments that can’t wait? Why not get a small loan with guaranteed quick payment.
PaydayLoansUK and its lenders can help you secure up to £5k in loans with favourable interest rates. Our lenders’ requirements are not hard to meet and they have a high approval rate. Read further to get more insights on what small loans are and how to apply for one.
Small Loans VS Payday Loans
Some small loans are similar to payday loans in some way. Like payday loans, these loans are meant to be paid back over a short period and usually have high APR or interest rates. Other types of small loans work more like running credit accounts or lines of credit in that they allow you to withdraw as many times as possible till you reach your credit ceiling.
However, the objectives of getting small or payday loans remain the same; help you tide over unexpected expenses in the meantime.
Before taking out any loan, it’s recommended that the borrower read through the loan’s conditions carefully and be sure that they can afford to pay it back on time.
How Can a Small Loan Assist You?
Small loans give you a good head start with developmental projects you may want to carry out; examples are home remodelling or fixing damaged plumbing fittings. They also help you stay ahead of unexpected expenses. Since you can spread the cost over time, it may make more financial sense to get one than use up your savings.
When paid on time, small loans can also improve your credit score. So if you have been searching for a way to improve your credit profile, here’s one.
They may also be useful for:
- Consolidating debts
- Taking care of medical emergencies
- Financing small purchases
- Miscellaneous expenses in college
- Business financing
How Can I Take Out Small Loans Fast?
Getting a small loan is easy and fast with PaydayLoansUK. Here’s how:
Get started by completing the application form with your personal and contact information. Our lenders may also require you to upload a government-issued ID and paperwork to prove you are gainfully employed.
Get approved and compare offers
On submission, we will match you with multiple lenders. The lenders run several affordability and credit checks on you and approve you for funding once you pass these checks. Look at the different quotes and compare the loan amounts, interest rates, and repayment terms, then go with the lender whose offer suits you best.
Sign the quote
Once you have chosen a lender, sign the quote given to you. You may also be required to submit some final documentation with your bank account information. Their websites are secure so you can be guaranteed that your details are safe.
Most of our partner lenders will deposit the requested money anything from the moment you submit the signed quote to a couple of hours later. A few other lenders may take an extra day. It’s good practice to ask the lender for the estimated waiting time.
What Are The Eligibility Requirements for Small Loans Online?
The eligibility requirements for small loans are not as stringent with online lenders as they are with banks. They simply don’t require as much as bank loans do. For starters, the borrower must:
- Be at least 18 years old
- Be a citizen of the UK
- Be in a full or part-time employment
- Have a government-issued ID
- Have a regular income
- Have a debit card
- Have a valid bank account
Once you meet the eligibility requirements, you will be considered for funding. Not to worry, PaydayLoansUK lenders have a high approval rate and so should be able to get you enough credit to settle your financial commitments.
Are Small Loans Still Costly?
Small loans aren’t exactly as costly as people perceive them to be. While it is understood that many lenders charge high-interest rates or APR, these loans are only meant to be borrowed for a short time. The total cost of the loan only becomes very high as interest accumulates over time.
Lenders typically charge this high APR to make some return over the short time the loan is borrowed. Once you don’t hold on to the loan for too long, you will see that the total cost of the loan isn’t as ridiculous as misconceptions have made people believe.
What Should I Know Before Getting a Small Loan?
Before picking up a new loan, there are some things you must bear in mind
- The interest rates on small loans can be high. The total cost of the loan gets even higher if you borrow it for a longer-term
- You may incur some fees for missing a repayment
- Defaulting on payment can hurt your credit score
- Small loans are relatively more expensive if you have bad credit
Small loans are versatile and hence, can be used for virtually anything. That said, it is not recommended to be used for sponsoring frivolities. These frivolities are likely not a priority and can wait till you’re boxed up again.
What Are Alternatives to Small Loans?
Short term loans are unsecured loans given out to support a temporary personal need. In most cases, they must be repaid within six to eighteen months. Like small loans, it’s involves lower borrowed amounts.
It’s possible to get a bit more money than what you have in your current account. This additional credit is what is known as an overdraft. An overdraft has a limit usually agreed on by the borrower and lender, hence the name ‘agreed overdraft’. Some agreed overdrafts are expensive, so you may want to look at the total cost of the loan and compare it with the alternatives before getting one.
Money transfer credit cards
A money transfer credit card allows you to borrow money through your credit card and pay into your current account at low introductory rates. The minimum transferable sum is £100, and the maximum you can transfer is 93% of your credit limit. A money transfer is usually subject to approval.
Can getting a loan help to increase my credit score?
There are two sides to the coin. On one side, your credit score can climb up by a few points if you take out a loan and payback on time. On the flip side, your credit score could take a hit if you miss payments or fail to pay back on time. You also risk being charged late payment fees and additional interests
Can I get a small loan if I have bad credit?
Yes, you can. Traditionally, people with good credit are more likely to be approved for a loan than those with bad credit. This rule still applies to banks and a few other lending institutions. The landscape looks a little different now with the emergence of bad credit lenders, though. Bad credit lenders are specially established to fund people with bad credit scores. You get easily get approved for a small loan for bad credit.
Can I receive the money today?
Yes, you can. However, this depends on the time of the day you apply for the loan and how long it takes for your bank to process the deposit. Our lenders typically send out the approved loan a few minutes to hours after you sign their quotes.
What’s the maximum small loans amount I can borrow?
The maximum amount you can borrow depends on what’s being approved by your lender based on their assessment of your employability status, debt-to-income ratio, and income level.
But our partner lenders can get you up to £5k cash.
Can I get small loans without a guarantor?
Yes, you can get loans with no guarantors. That being said, the interest rates are usually higher than if you had one. Also, you must be able to prove through proper documentation and paperwork that you can pay back on time. Getting a guarantor puts you in an ample position to claim higher loan amounts. The interest rates are lower too.