Are you in need of quick cash?
Is your pay still a few days away but you have to pay your bills right now? Getting a traditional personal loan is out of the question – approval takes too long and there’s no guarantee you’ll get the loan.
For one thing, your credit score might not be ideal. Approximately 30% of people in the country suffer from mediocre credit and this can cripple your chances of a reliable financial solution.
This is where small personal loans come in.
Not sure how these loans work? Uncertain if you qualify or how to find the right small personal loan for your specific needs?
We’ve got you covered. Read on below to discover all you need to know about these loans and how they can help you:
What are Small Personal Loans?
Small personal loans are for short use. They won’t help you launch a business or make a major investment. The intention is to use these loans to pay emergency medical bills, late mortgage payments, utility bills, and due credit payments.
Don’t expect these loans to offer a large amount. You can expect most small loans to be between $300 and $3,000. The amount you qualify for depends on several factors, which we will discuss below.
It’s also important to note that these small loans have a quick turnaround. Unlike traditional loans, you must pay these loans within a few weeks. Some lenders require you to pay as early as your next payday, bridging the lines between payday loans and personal bank loans.
What are the Requirements?
Do you qualify for a small loan?
The requirements may change from lender to lender but there are common standards you should keep in mind. For one thing, you need to have a stable source of income.
This could be from a regular job or paychecks coming in from government support or from a spouse.
You should be of legal age and some lenders will require you to have a valid, active bank account. This ensures there is an account they can deposit the money to.
Your bank may also be accountable in case you’re not able to pay the loan back.
Valid identification is also a common requirement. This guarantees the lender you use your real name. Black hats use a different name and this makes it difficult for lenders if the applicant won’t pay back the loan.
Identification also proves your address as well as connection to your bank and income source. It also proves you are of legal age.
What About Credit Score?
Another requirement is a good credit score. If you don’t know how credit scores work or how your spending habit affects it, you should speak to a financial adviser. A simple budget discussion and credit explanation can help you build a better credit score.
An excellent credit score is above 650 to a perfect 850 and anything below 400 is horrible. You will need something along the middle to qualify for the smallest personal loan available. Your credit score will determine how much the lender is willing to give you.
What if you don’t have a good credit score or no score at all?
Not all lenders will give you a chance but there are a few who offer an alternative.
Instead of looking at your credit score, they’ll ask for a collateral. This could be your phone or the documents for your car. If you can’t pay your loan by the due date, they’ll take your item as payment.
Other lenders will give you a loan without asking for a collateral.
They are the ideal solution for someone in need of a quick loan and have the income to pay for it. You can learn more about this type of small loan, which requires no credit check, at Bonsai Finance.
Pros and Cons of a Small Personal Loan
Is a personal loan the right solution for you? Here’s a quick rundown of the benefits and disadvantages you need to consider before signing the dotted line.
Some of the pros include:
- Higher chance of getting a loan
- Quicker process
- Credit score may not be a factor
- Great for people with a new bank account
- Ideal solution for quick financial emergencies
As for the disadvantages, you should consider the following:
- High-interest fees
- High penalties
- Can’t loan a large amount
- A collateral may be a risk
If you look over the pros and cons, small personal loans appear as a great solution. You’re only at risk if you don’t commit to paying the loan off. If you take financial advice to heed and pay the loan on your next paycheck, you should be in the clear.
How to Get a Small Loan
Great, so a small loan is a viable solution in case you have a sudden emergency to pay off. Do you have to pay your Internet bill or a hospital bill a few days before your paycheck comes in? These are the ideal loans for you then.
But how do you apply for one?
Traditional loans take forever. You have to go to the bank, fall in line, and speak to a bank representative to apply for a loan. The process can take days or even weeks, even if the loan is only for a small amount.
Online small personal loans don’t take this long. You don’t even have to step out of your house.
Remember Bonsai Finance, the folks we mentioned above?
With a few clicks of a mouse, we can help you find the ideal lender for your specific needs. Bonsai Finance helps you find all of the lenders available online and you can reach out to them after filling up a simple form.
Get a Small Personal Loan Today!
What are you waiting for? If you have to pay something off quickly, apply for small personal loans now. These loans could help stabilize your finances until you’re back on your feet.
But financial advice doesn’t end here. We have a lot more to help you with.
If you feel like you’re in a financial rut or you simply don’t understand some of the more complex jargon in the industry, we’re here to clear the path. Feel free to contact us and we can get you started on a better financial future.