What are Small Loans?
Small loans are quick loans that are designed to quickly provide people with small amounts of money. Ideally, these loans are used when unexpected things come up, like a car repairment bill or when you are in need of emergency funding.
Small loans are for amounts typically no more than £5000 but it’s mostly lower depending on how long you choose to spread the term. Normally, lenders give you options whether you want to repay the debt in one payment or you want to do it weekly or even monthly. The longer the term, the higher interest rates applied. So, it is recommended to choose the shorter term possible for your situation.
Why May a Small Loan Help You?
While most people take out small loans as a way out of financial crises, the fund can actually be used for various necessities, such as financing your special holiday or replacing an old car.
A small loan can also be a kick-start to begin your personal project or even as additional funds to keep your small business going. However, using it this way can cause you to extend the repayment terms which may be difficult to complete in the long run. So, always take out a loan in the amount and terms that you know you can afford.
Am I Eligible For Small Loans?
The eligibility requirements are quite lenient. Anyone that meets the following conditions can qualify for small loans.
- Age: At least 18 years old, stated on your ID.
- Residence: A UK resident.
- Have a valid bank account and debit card: Many lenders don’t give cash and prefer to directly deposit the funds into your bank account.
- Employment status: Can be full-time, part-time, or self-employed.
- Have a stable income: You can prove this by showing related documents such as your previous paycheque.
How Can I Get a Small Loan?
The fastest way is by using the service of UKBadCreditLoans. As an established loan broker, we help speed up your loan process by connecting you to your potential lenders that most likely have the right offer for your situation. How? Simply follow the steps below:
- Fill in your information: Apply your loan request on our website so we know what kinds of lenders you are looking for.
- Instant Decision: Receive your decision from the lender and review the payment terms.
- Receive money: Sign the agreement and get the money within a few days.
Looking to Borrow Money Easily?
Representative Example: Rates from 43.1% APR to 1333% APR. Minimum Loan Length is 1 month. Maximum Loan Length is 36 months. Representative Example: £1,200 borrowed for up to 75 days. Total amount repayable is: £1506. Interest charged is 0.34% per day, amounting to £306, annual interest rate of 124% (variable). Representative APR: 49.7% (variable).
Is It Costly to Get a Small Loan?
The answer is both yes and no. Small loans may tend to have high-interest rates but these loans are mostly short-term that averagely can be completed in three to four times payments. So, the total cost won’t be so high compared to loans with longer repayment terms.
However, if you miss a payment, lenders would charge you with late repayment fees, and doing it repeatedly could be quite expensive. Furthermore, it could also extend your repayment terms that cause a higher interest, and lead to a significant increase in the total cost. So, it is best to only take out loans that you know you can repay on time.
Is It Possible To Get a Small Loan with Bad Credit?
Yes, it is possible to get a bad credit small loans. While lenders are legally required to run credit checks on whoever applies for loans, many of them are willing to overlook your bad credit. This is because lenders begin to realise that people have bad credit for various reasons, many of which may not be their fault.
These days, many lenders begin to disregard the traditional credit score criteria and instead focus on other criteria such as employment status and stable income. So, bad credit won’t matter much as long as you can convince lenders with your capability to pay back.
|How much can I apply for?||£100 to £5,000||Zero-obligation quote|
|Length of the repayment||1-36 months||Quick payout|
|Interest rates (variable)||49.7%||Zero paperwork|
|Can I apply with poor credit standing?||Yes||Bad/low credit considered|
|Do I have to pay a lump sum?||No||Flexible repayment|
|When am I allowed to apply?||24/7||2-min simple application|
Alternatives to Small Loans
Small loans tend to have high-interest rates and depending on your circumstances they may not be good options for you. Look at possible alternatives below before making any decision!
- Purchase credit cards: You can take advantage of the low interest rates for purchases offered by many credit cards during the first few months of using the cards.
- Money transfer credit card: Borrow cash from a new credit card and immediately transfer it to your current account at a low promotional interest rate. Try to clear your balance before the rate rises.
- Agreed overdraft: Some agreed overdrafts offer a small authorised short-term loan with interest as low as 0%.
Can I borrow small loans on UKBadCreditLoans today?
Getting loans can take much time, especially if you still don’t know where to go. UKBadCreditLoans provides a solution by instantly matching your loan application to reliable lenders, and if you are approved, you may receive the money as soon as the same day.
What should I know before applying for a small loan?
Always consider the following points to decide if a small loan is good for you.
- Interest rates tend to be high
- The total cost may be more expensive if you have bad credit
- Lenders would charge a late payment fee for every payment you miss.
- Falling behind on repayments can damage your credit score.
Can borrowing a small loan improve my credit score?
Having no existing credit could be considered a risk by lenders since they won’t have information to judge your financial situation. In this case, borrowing a small loan and making payments on time can improve your credit score. On the flip side, missing payments would harm your credit score.
What are the differences between small loans and payday loans?
Small loans and payday loans have similar characteristics as they both are short-term and mostly used for urgent situations. However, small loans may provide funds that can be withdrawn multiple times up to a set limit, while payday loans tend to provide quick funds in one go.