What are Small Loans and When Should You Get One?
We all need to borrow money from time to time. In today’s complicated economy, you won’t always have the cash you need to buy crucial items immediately. However, that doesn’t necessarily mean that you’ll need to borrow a lot of money either. Some people need to borrow huge amounts of cash over a long period to help them pay for things like a business, or a new home. On the other hand, some people just need a little extra cash to get things done, like £50 to replace a tyre.
Small loans are designed for people who don’t want to commit themselves to paying off a debt over a long period of time, when they only need to get their hands on a little bit of cash. Today, we’re going to explain what a small loan is, and when you might need to consider one to support your financial situation.
How much would you like to borrow?
Representative Example: Rates from 49.9% APR to max 1333% APR. Minimum Loan Length is 1 month. Maximum Loan Length is 36 months. Representative Example: £250 borrowed for 30 days. Total amount repayable is £310.00. Interest charged is £60.00, annual interest rate of 292% (fixed). Representative 669.35% APR (variable).
Defining Small Loans and Payday Loans
Quick loans, or “little loans” are named for their nature. While some loans, like mortgages, can last for thirty years at a time, these mini fast loans are intended to be delivered quickly, and paid off just as fast. That means that you can get out of debt as soon as possible. With a smaller loan, you’re not locked into constant monthly repayments. That’s a huge benefit for people who aren’t 100% sure how much money they’re going to be bringing into their home each month.
After all, just because you know you can afford to pay back a loan next month, doesn’t mean that you know you’ll feel comfortable making the same repayments once a month for the next three to five years.
Smaller loans aren’t just different because they’re intended for short-term lending – they also offer borrowers a smaller amount of cash too. For instance, instead of letting you access thousands of pounds for a big purchase like a new kitchen or a car, these lending solutions are intended for quick mini purchases of under £1,000. Some little loan providers only offer loans of up to £500. You’ll need to see what the limits are for your provider before you make your applications.
If you’re wondering whether there’s a significant difference between a little loan and a payday lending solution, then there isn’t one. However, most people prefer to avoid using the words “payday loans” these days because the term has gained a bad reputation. Like payday loans, your little loans will need to be paid off as quickly as possible, often by your next payday, or as soon as possible after.
When Would You Need a Little Loan?
You might be wondering why you would bother with getting a mini loan at all. After all, more often than not, if you just need £50 for something, then you’ll usually be able to wait until your next payday to get it. However, these loan types are generally intended for people who need to access money in an emergency. If you’ve got nothing left over in your emergency savings and you’re suddenly left with a flat tyre on your way to work, then you can’t exactly wait until next month before you get back on the road. The same applies if you need a couple of hundred pounds for a new boiler. You wouldn’t want to leave your family without heat or hot water until your next payday.
A small loan means that you can deal with unexpected expenses and painful financial problems quickly and effectively, without the unnecessary stress. Additionally, the great thing about loan brokers like Boutell, is that we won’t ask you to explain your need for a little loan to us. We’re not going to make you jump through hoops to get the cash that you need like a traditional provider might. Instead, we’re going to focus on helping you to solve your problem as fast as possible, so you can move on with your life.
With a tiny loan, you’re not going to be dealing with the repercussions of the emergency in your life for several years either, worrying about how it’s going to affect your future budget. For one month after you take out your loan, you might have to deal with a little extra cash when you pay back what you owe, then you’ll be back on track again with nothing to be anxious about.
Is it Easy to Get a Small Loan?
So, are little loans easy to access, or do you need to deal with a complicated application process like you would for a typical lending solution? Well, the good news is that with small loans, most lenders aren’t taking on nearly as much risk as they would be with a typical personal loan or mortgage. This means that they can offer you the money you need quickly without having to put so much time into making thorough risk assessments.
Although the loan companies we partner with will still need to check your credit history, you won’t necessarily be rejected from a loan just because you have bad credit. We can still approve you with a poor credit background, because you’re only borrowing a small amount of money for a limited time.
Aside from being open to practically anyone, smaller loans are easier to access than most traditional loans because you can usually apply for the money that you need online too. All you need to do is quickly fill out a form that asks some basic questions about how much you want to borrow, and your income. You will need a regular source of income to ensure that you can pay back the money that you lend. What’s more, all loan providers in the UK need their borrowers to be over the age of 18 to access a loan – it’s the law.
The application process is quick and simple, with as few questions as possible to answer, so you can focus on getting the money that you need fast. However, it’s a good idea to approach the application process with information with you, just so that you can keep your responses accurate. Any mistakes in your application could mean that it takes longer to get the loan that you need.
How do Little Loans Affect your Credit?
One of the biggest benefits of short-term mini loans like weekend payday loans, is that they’re available to people who don’t have the best credit rating. Why jump through all the hoops of trying to apply for a traditional loan when you only want to borrow a small amount of cash after all? Our lenders take other things beside your credit rating into account when deciding whether to give you the money you need. For instance, we’ll look at your affordability and how regular your income is too!
What’s more, since you’ll be paying off the money that you borrow quickly, you could even find that taking out these little loans helps you to start improving your reputation with the lending bodies again. While we would never recommend taking out a loan just to improve your credit rating, the nature of these short-term lending solutions mean that you can be in debt for as little time as possible.
You’ll be able to pay back whatever you owe quickly, prove that you can be trusted, and ramp up your credit score quickly. What’s more, because it’s easier to apply and be approved for a little loan, you’re at less risk of ending up with a black mark on your history too.
Borrowing Small Loans
There’s never any one-size-fits-all strategy to getting the right lending solution when you need to borrow money fast. The loan that’s right for you will depend on your situation, how much you want to borrow, and how quickly you want to pay your cashback. However, if you’re looking for a way to access a small amount of money quickly and pay it back over a short period of time, then payday lending could be an ideal solution. Little loans:
- Require you to take very little risk, because you know that you’re not going to be in debt for very long. You can get rid of your loan within as little as one month.
- Offer you approval very quickly: These loans are usually easier to apply for and be approved for than traditional loans.
- Are easy to understand: You’ll be able to arrange a repayment date for the money you owe and get the loan out of your life as fast as you like.
- Are fast: When you need money in a hurry, credit brokers like Boutell can get the cash you apply for into your account within a matter of hours!
Are Small Loans Safe?
Ultimately, if you’re dealing with an emergency expense and you need money fast, there are plenty of upsides to applying for a little loan. These loan types are perfectly safe thanks to the approval of the FCA, and when you work with someone like Boutell, you know that you’re getting a company that’s committed to customer satisfaction and support.
Remember, if you have any questions, you can always talk to us before you begin your loan application.