You need not borrow thousands of pounds if you want to borrow a small amount of money. But most of the lenders offer loans that start from £1,000. How do you find a loan that will fit your pockets without burning a hole in it? Restricted access to funds can cause financial strain and that may affect your financial well-being as well. By borrowing the money you can pay for buying a car, you can fund your holidays, as that allows you to get what you want right away. There are many ways to borrow money when you need it and an unsecured loan is one of them. These loans are also termed as personal loans and are not secured against any of your valuables, but legally, you must repay the loan.
In this article, we will discuss:
- What are small cash loans?
- The alternatives
- Where can you get a small loan?
- Key things to think about
What are Small Cash Loans?
Small cash loans are short-term loans that can be taken out by you for a brief period of time – mostly between three to twelve months. These loans are unsecured and hence, as a borrower, you do not have to provide any kind of security to avail the loan. Also, most of the lenders do not require any co-signor or guarantor. Yes. Nothing is at stake but your credit score. You are legally responsible to repay the loan within the agreed date. You can take out a Small Cash Loan in the UK from £100 to £1,000. That is the typical range most of the lenders offer. However, the minimum and maximum limit can vary depending on the lender. You can apply for a loan easily online by filling up the application form and the lender will then verify the details provided by you to make a decision whether to extend you a loan offer.
In times of need, we all need quick access to money, without any delay. However, while stuck in an emergency, we must also consider the alternatives that are available. It is always wise to make a firm decision after weighing each and every available option to choose the best. Listed below are some of the alternatives to a small loan:
- Credit Cards
If you have not yet maxed out your credit card limit and the amount that is required by you is available on the card, you may use the card. But remember, you have to make a lump sum payment on the next due date to avoid heavy interest charges.
- Credit Union
There are several credit unions who offer personal loans to their members. The rate of interest will be comparatively lower than a loan that is availed online. But it works the best only if you have a recognized banking relationship.
- Payday Advance
You may ask your employer to pay you in advance. Discuss your situation with them and maybe they will agree to help you. However, ask them their payment expectation. They may want the money in a lump sum.
- Friends and Family
Your loved ones may help you out in such situations only if they are not equally cash-strapped. Ask them for a favour and return their favour timely.
Where Can You Get a Small Loan?
There are plenty of choices available online if you search for these Instalment Loans in the UK. These loans need not be repaid at one go. You can spread the cost of repayments over several months. Find lenders or credit providers who are registered by the financial regulator – the Financial Conduct Authority (FCA) to avoid falling prey to any scam. Check the details of the financial firm on the Financial Services Register. Also, review the feedback given by the previous borrowers to know what you are dealing with. Choose the lender, amount and loan tenure and fill in the application form. The lenders will verify the information that you have provided in the form and will offer you initial quotes for the loan. Lenders associated with Loan Broker run a soft credit check to offer the initial quotes. A soft credit check doesn’t harm your credit score. However, a hard credit check is mandatory to be run by the lender, by law. That will be conducted once you agree to proceed with any of the initial quotes. If your loan application is approved, the lender will transfer the money to your bank account within a few hours – it depends on the lender and your bank.
Key Things to Think About
Before you borrow a loan, you must consider a few things that may impact your personal finance management. Finding the right financing option needs research and planning. The financing option may be a lifesaver or it may create financial chaos in your life – it completely depends on you. Consider the below-mentioned points before taking out a loan:
- Credit Score
When you apply for a loan, the lender will run a credit check to know your loan eligibility and how well you manage your finances in order to make a decision. Your credit score is what will help the lender to set the interest rate.
- Loan Tenure
Consider the length of time for the loan you are taking. Evaluate how long you wish to commit yourself to pay back the loan. How comfortable will you feel if the burden of the debt will be hanging over your head for a longer duration?
- Repayment Affordability
Think carefully whether you can afford to make all the repayments. Check the interest rate and APR and evaluate the total cost of borrowing and then determine whether or not you can afford it.
The Bottom Line
Always compare loans before making your decision. Explore and shop around to find multiple options. And when you are comparing loans, ensure you are taking into consideration the APR to find the overall cost of the loan. Understand the Terms & Conditions of your borrowing agreement before signing on the dotted line. And if you are not clear about something, ask questions to your lender and do not sign the agreement until you feel satisfied.
To apply for a small cash loan with us, click here.