Small loans or little loans are low-value loans. These are short term loans which help you to take care of some unexpected financial expense. The amount of small loans can range from £100 to £3000.
These types of loan are important in situations where you have to take care of some situation which needs financial support. The situation can be house renovation work, mobile or electricity bills, Vehicle servicing, etc
You can handle this situation if you have any money in your savings account. This will help you go through the situation without the need to borrow money. However, if you are short of cash and also don’t have much in the savings account you can opt for a small loan.
The reason that small loans can be a good solution to your problem is that the repayments don’t go on for years. Like whenever you apply for a long-term loan, the amount is huge compared to small loans. The installments for these loans go on forever. This is not helpful to you as you cannot make any financial adjustments or savings.
Although in small loans the repayments are done within months according to the plan you select. You can choose to repay in 1, 3, 6 or 12 months. It can be further increased depending on your credit score.
Who All Can Get Small Loans?
The most common question that pops up in people’s mind is “Can I get a small loan if I have a bad credit score?”.
The answer to that question is “Yes”.
Getting small loans for bad credit is not that difficult as it used to be. Lenders are now providing loans to people for bad credit (Bad Credit Loans). Most of the lenders would look for a guarantor who could back the borrower in case he fails to make the repayment. But now you can get a small loan without any guarantor as well (No guarantor loans). Now you don’t have to worry about getting help from someone to get a loan.
Besides this you have to fit in the below criteria to apply for small loans:
- Their age must be 18 years or above
- They must be a UK resident
- They must have an active bank account for the transaction
If you meet the above requirement you can apply for a small loan.
Advantages and Disadvantages of Small Loans
The advantages of going for small loans are:
- You can get a small loan even for a bad credit
- No guarantor is needed for small loans
- The small loan amount gets credited within minutes of application
- No need of paperwork as all the process is done online
Though there are a lot of advantages when going for a small loan, there are few disadvantages too.
- The interest rates are higher than other loans.
- You have to repay the amount in a short period, this can be disadvantageous if you are not financially capable to make the repayment.