Contents
What Are Small Loans?
With small loans you can borrow £100 to £5,000 over a period of 1 – 36 months. They're ideal for short-term lending and they're a great option for covering small expenses.
Better still, loans of this type are also available to individuals who would otherwise be unable to get a loan, such as those with bad credit, those who are unemployed, etc.
Why Are They Useful?
Small loans are very popular financing options because they're considered a low-stakes type of lending.
More specifically, they are also known as unsecured loans, which means you don’t need to provide any assets as collateral in order to qualify. They're quick and hassle-free to receive and super easy to repay. Read More »
They’re a great option if you're strapped for cash in an emergency, or for short-term cash flow problems. Most lenders will deposit the money into your account within just hours of your application being accepted, so they’re a really effective way of accessing the cash you need fast. « Show Less
How Do They Work?
Before entering into any financial agreement, it is immensely important to make yourself aware of exactly how the process works. By reading this page you'll find all the information you need to make a well-informed decision as to whether this is the correct loan option for you. From applying to repaying, here is everything you need to know.
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Applications can be made entirely online – simply complete and submit a basic, 1-2 page form and you’re done. You’ll receive a decision in minutes and you could access the money the very same day!
The lender will assess your credit report and financial standing in order to decide whether you’re a suitable candidate for the loan, but don’t worry if your credit score isn't stellar. There are a number of lenders on our panel who will provide loans specifically to people with poor credit histories, so you can still qualify!
Pay back in easily manageable, monthly instalments and choose to spread the cost of your repayments over 1 – 36 months. The amount that you repay is always agreed upfront before any money is exchanged. There are no hidden fees, so you'll never encounter any nasty surprises.
How Do You Get A Small Loan? Are You Elegible?
Before applying for any type of loan, it's strongly advised that you consider whether you will be approved. That being said, the following section will give you all the information you need to know about the qualifying criteria and making an application for small loans.
Make An Online Application
Apply by submitting an online application form. You don’t need to fill out extensive paperwork and there is absolutely no need to make any calls. The form takes just minutes to complete and requires only very basic information, such as:
- Your total income (including a brief account of your monthly expenses)
- Any addresses which you have lived at within the past three years
- Details of your current employment status
Why Choose Us: We will never pass on your information to third parties without your permission. We use 256 bit encryption, to ensure that all of our client's information remains fully protected, so you can be sure that we're a safe choice.
Who Can Apply?
Perhaps the best benefit of small loans is that they boast high approval rates and they're accessible to almost everyone! There is no stringent criteria - just a few, very simple requirements which you need to fulfil in order to qualify: Read More »
- You need to be over 18
- You must be a UK resident
- You’ll need a UK bank account, otherwise the lender will not be able to transfer you the funds « Show Less
How Much Can You Apply For?
Loan amounts start at £100 and go up to £5,000. The amount that you are actually granted is dependant upon your credit score, employment status and income, so bear in mind that the amount you are offered may differ from that which you initially applied for. While you do need to manage your expectations, remember that as a whole, many applicants are successfully granted the full loan amount that they need.
How Long Will It Take To Receive A Decision?
This is where the real benefit of an online application system comes in to play. We use leading technology, to match your application details with the most suitable lender on the market within just seconds. Ultimately this means, that we are able to award clients with an instant online decision and ensure that we deliver the most efficent financial service. Read More »
To put this into perspective, if you were to apply for a loan through a brick and mortar lender, such as a bank, it is highly likely that you will be waiting weeks, even months to find out if you've been approved. The sheer amount of paperwork involved coupled with strict qualifying criteria, means that banks can take a long time just to process your application, let alone return to you with a decision. If you're in need of a loan quickly, this is something that you should definitely consider before applying. « Show Less
Expert Advice: It is strongly advised that you check your elegibility for a loan, prior to applying, using soft search results. This will not affect your credit score and you can do it for free, using Money Saving Expert's loan elegibility calculator
The Benefits And Drawbacks Of Small Loans What Are The Pros & Cons?
When considering what small loans have to offer, you need to examine the benefits as well as the drawbacks. Doing this will equip you with the facts you need to make a confident and sensible choice, that this is the right loan option for you. In this section we take a side-by-side look at all of the pros and cons.
Benefits:
1. You Can Access Funds Quickly And Simply
Small loans are notoriously easy to attain. Approval rates for this type of financial service are very high and many applicants are able to access the money they need the same day! All you have to do is submit an online application form and meet the minimal requirements. Read More »
Better still, this type of funding is also known as an unsecured personal loan, which means that you do not need to provide an asset as collateral to qualify. Ultimately, you can borrow the cash you need quickly and avoid any risk of losing your home, or any of your prize possessions! To find out more about unsecured and secured finance read more below.
Small Loans vs Secured Loans
There are two main types of loan that you can attain; secured loans and unsecured loans.
Unsecured loans, also known as personal loans, are not secured against any of your assets. What does this mean? Well, if you ever find yourself unable to repay, the lender will not be able to repossess your home or take any of your personal possessions to pay off the debt. As there is no collateral, lenders do tend to impose higher interest rates than a secured loan provider would. Because of this, they are sometimes a slightly more expensive means of borrowing, but there is absolutely no risk to your property!
Secured loans are fixed against significant assets such as your car or house, so if you can't keep up with your repayments, the bank will be able to repossess your house in order to cover the amount owed. The interest rate tends to be lower, but the long term risk is far greater.
Overall, unsecured small loans can be fractionally more expensive, but they are definitely the safer option. « Show Less
2. Repayments Are Small And Stress-free
The process of repaying your loan is designed to be as smooth and straightforward as possible. Simply pay back over a period of 1 to 36 months in small, fixed monthly instalments. The full cost of the loan is always pre-agreed and outlined clearly, prior to the exchange of any funds, so you'll never encounter any hidden fees or costly surprises further down the line.
Top Tip: Calculate a representative amount of how much you will need to repay, before applying, to ensure that you can afford the loan. It only takes a couple of minutes, and you can do so using Money Saving Expert’s free personal loans calculator.
3. They’re Available To Those With Bad Credit
The main problem that applicants encounter when looking for a loan, is that their credit score isn’t high enough. A bad score can severely affect your chances of receiving a loan, or at least getting it at a rate that is reasonable. However, with small short-term loans there are options available for those with bad credit! So, it could be the ideal financing solution to help you out in a pinch, regardless of your credit rating.
Drawbacks:
Small loans certainly have their benefits, but if you are considering getting one, then you also need to be aware of the possible drawbacks this option presents.
1. Interest Rates Can Be High
In exchange for the convenience and speed of service, lenders will sometimes charge you a high APR. Like all small short-term loans, the lending company has to make a profit somewhere. Obviously, this will affect the amount that you need to repay, so it’s worth calculating whether you can actually afford this type of finance before applying.
Expert Advice: When considering if you can actually afford a loan, it's really important that you make thorough calculations. Make sure that you factor in any extra fees or charges that come with the loan, to avoid any costly surprises in the future.
2. You Can't Borrow Large Amounts
This is an extremely obvious point to make, but it is worth thinking about – small loans won’t cover large expenses. If you need to make a purchase exceeding the maximum loan amount of £5,000, then you'll need to reconsider your options. For example, a small loan wont cover a major expense, such as purchasing land or real estate, but it can help to cover a loss of income or to contribute towards a wedding.
Top 5 Reasons To Get A Small Loan Deciding If It's Right For You
If you ever find yourself in a financial emergency, small loans are a real lifeline. You can access funding extremely quickly, regardless of your credit score. They can be small personal loans or even small business loans, if that's what you need. Still not sure if this is the right financing solution for you? Take a look at some of the top reasons our clients apply below.
1. Bridge A Sudden Decrease In Income
Most people have a relatively good idea of what they can expect to take home at the end of the month, and will therefore budget their finances accordingly. However, what happens when your expected sum suddenly decreases? Perhaps you have:
- Recently lost your job
- Been hit by a pay cut, or a sudden reduction in your working hours
- Lost a few days pay due to sickness
A small loan can help make up for the financial loss caused by any of the above problems quickly and effectively. It will buy you some extra time, and tide you over financially until you are able to find a more permanent solution.
Expert Advice: When considering a lender always ensure that they are registered with the Financial Conduct Authority before you finalise any loan agreement. The FCA is the main regulatory body for all financial firms across the UK, so the best indicator of a trustworthy and legitimate lender is if they are registered here.
2. Carry Out Emergency Repairs
We've all been there - one minute everything is fine, and the next, your house is flooded because a pipe burst in the kitchen. Perhaps your boiler broke down, or your car needs a very expensive repair? An unforeseen situation like this necessitates an emergency fund to dip into, but not everyone is fortunate enough to have access to spare funds. If you've found yourself in this situation, do not panic. Small loans are an ideal solution: Read More »
- Access the cash you need, without having to make any calls or visit the bank.
- Apply online from the comfort of your own home and receive an instant online decision.
- Have the cash deposited directly into your account. Payout times for this type of finance are so quick that they're also frequently referred to as same day loans. « Show Less
3. Cover Everyday Expenses
Everyday life can be expensive, especially if you have children. Some months we need just a little extra financial help to pay for life's basic necesseties, such as the monthly food shop and paying our bills on time. Well, that's exactly where small loans come in. This type of loan is specifically designed to help cover those months when you just can't seem to make ends meet. You can access the cash you need quickly and repay comfortably, in installments, over a period that suits you best!
Why Choose Us: We find you the best rates and the quickest pay-outs, so you don't have to! We only work with direct lenders and we don't charge any fees. Ever. Just one simple application, one loan amount and one clear cost to repay.
4. Pay For Medical Bills
We know we can't play fast and loose with our health. Medical bills can be prohibitively expensive, especially when it comes to unusual treatments, or even something as mundane as dental work or a pair of prescription glasses. Anything not covered under the NHS is going to cost you a pretty penny, and this isn't an expense you can forgo or keep pushing back forever. After all, your health is the most important thing you can invest in.
5.Improve Your Credit Rating
Many people have a misconception that getting a loan out will negatively impact their credit rating. Well, that's not entirely true. You see, your score is impacted positively or negatively by your actions and financial decisions. It is not the mere act of taking out a loan that affects your credit score, but how you manage it. Read More »
For example, if you are diligent about loan instalments and repay on time, your credit score should actually go up. Prove that you are a reliable customer that takes their financial responsibilities seriously. The more payments you make on time, the better your score will be. Thus, a loan of a small amount could in actual fact be an excellent, and very clever, instrument to improve your credit rating. « Show Less
Small Loans vs Credit Cards Exploring Your Options
Small loans and credit cards are both popular options amongst those looking for additional finances, but which option is best? More specifically, which option is best for you? In this section we consider both options together, drawing comparisons and outlining the pros and cons of both products.
Small Loans Definition:
A personal loan of a small amount of money, usually no more than £5,000, which is then paid off regularly, in small, fixed monthly installments, as part of a repayment plan with the lender.
They are a particularly useful option if you're strapped for cash in an emergency, or for short-term cash flow problems. Most lenders will begin transfering the money to your account within just hours of your application being accepted, and you’ll know in advance exactly how much interest you'll be expected to pay.
Credit Cards Definition:
Unlike a loan, a credit card wont supply you with a cash lump-sum. Instead, it will give you an allowance, otherwise known as a revolving credit limit. The amount you can spend using your card will vary depending on the card provider and you will need to pay back everything you’ve spent, in full, each month to avoid being charged a high interest rate. Read More »
Top Tip: If you are currently struggling with credit card debt, please do not panic. There are lots of things which you can do to help manage your situation better. You can find free and impartial advice on how to effectively combat credit card debt here.
Pros and Cons of Small Loans
There are several pros and cons to getting a small loan, but the main advantages are:
- They are unsecured - You don't have to worry about losing your home if you can't make repayments.
- You can get a small loan with bad credit - As mentioned earlier, there are several lenders who specialise in providing loans for people with bad credit. However, don't forget that making too many applications within a short period of time can damage your credit score even further. To avoid this, compare your options and only apply for the best deal.
- They're incredibly quick - You can receive the cash you need within just hours of submitting an application! Read More »
Pros and Cons of Credit Cards
Some of the main advantages of getting a credit card include:
- They can be used to build up your credit score - If you pay off your credit card in full every month, this will count as a positive on your credit file and will help you to improve your score.
- Purchase protection - Credit cards offer more protection than debit cards, therefore if you receive a faulty or damaged product, you can claim the money back from your credit card provider. Read More »
Overall:
There are a range of factors to take into account when deciding which type of finance to get, but on the whole it's safe to say that despite a higher interest rate, small loans are quicker, simpler, and easier to repay than credit cards.
Do You Need A Perfect Credit Score To Qualify? Small Loans For Bad Credit
If your credit score isn’t currently as good as it could be, you will be happy to hear that bad credit will not stop you from qualifying for this kind of lending. Small loans are available to those with poor credit histories, but they can come with additional limitations. So, you need to consider all the following points carefully before making an application for bad credit loans.
How Could Bad Credit Affect Your Loan Application?
While you may consider yourself to be a great candidate for a small loan – the lender may look at your credit history and decide otherwise. This is usually because of one, or more, of the following reasons: Read More »
- You may have outstanding debt which you are not currently making an effort to repay
- You could have failed to make repayments on time in the past
- You may have failed numerous other applications for credit recently
- It could be the case that you’ve never borrowed before and so you haven’t built up any history of credit for the lender to assess. Loan providers are usually wary of lending to people in this position as they have no way of measuring how reliable you are as a borrower.
If you find yourself in any of the above situations, it is more than likely that a lender will view you as a credit risk. This could result in a higher interest rate, a lower borrowing limit, or a shorter repayment period being imposed, dependent upon what the lender requires to cover the risk. So, whilst there are lenders out there who will accept bad credit applicants, it is always in your very best interest that you take the appropriate steps to start improving your credit score as it will ultimately secure you a better deal. « Show Less
Caution: Beware of lenders who advertise this type of loan as: small loans bad credit no credit check. This is a false claim, designed to lure you in. That's not to say that you can't get a loan with poor credit, but all legitimate lenders will run a credit check when you apply for a loan as standard procedure.
Can Small Loans Improve Your Credit Score?
Yes - if the loan is managed responsibly and you continuously make your repayments on time, then you can definitely start to repair a poor credit score. If you can improve your credit report by demonstrating that you are a reliable borrower, you will undoubtedly stand a better chance of obtaining credit in the future, should you need it. You can check your credit score for free using any of the big three credit agencies:
Furthermore, one of the main attractions for using a small loan when you have a poor credit history is the opportunity to manage your current debts more effectively. You could consolidate all of your existing debts into one with a new loan. Having just one loan, will simplify the repayment process, as you will only have one clear cost to repay each month. This could be of huge help to anyone struggling to repay several loans or credit cards at the same time.
Frequently Asked Questions FAQS
In this section we'll answer all of the most common questions our clients ask about small loans.
How Much Money Can I Apply For?
You can apply for £100 to £5,000 by submitting an online application.
How Am I Approved?
Pre-approval can be awarded in under ten minutes with many applicants receiving an instant online decision. Final approval is subject to several factors including an assessment of your credit history, ability to repay the loan and any supporting documentation which you may need to provide.
Can I Get Small Loans Without Credit Checks?
The short answer is no. Loan providers will always look at your credit history, and you should be wary of any providers who claim that they won't run a credit check on you as this is likely untrue.
However, you can get a loan that takes into consideration your ability to afford and repay the amount borrowed, as well as your credit history.
How Do I Repay?
You can choose to spread the cost of your loan over a period of 1 – 36 months. Repayments are made as small, fixed monthly installments and the amount that you pay back each month will be decided upfront with the lender prior to the exchange of any money. So, you'll never encounter any costly surprises further down the line.
To gain a good understanding of how much you will likely be expected to repay, we suggest using Money Saving Expert's free loan calculator.
What Happens If I Find Myself Unable To Make Repayments?
If you default on repayments, usually a lender will charge you a late fee, or increase the interest rate. The amount that you will be charged depends entirely on which lender you are matched with, so be sure to find this out before finalising the loan agreement. However, to avoid additional charges, it goes without saying that it is in your very best interests to ensure that you always make repayments on time.
Can I Obtain A Small Loan If I Have Bad Credit?
Yes. We work with an extensive panel of direct lenders, most of which are open to lending to those with a poor credit history. However, be mindful of the fact you may have to pay a higher interest rate in comparison to someone with a perfect credit score.
Who Can Apply?
As long as you live in the UK, have a bank account and are 18 years old or above, you can apply.
How Long Will It Take For Me To Receive The Cash?
You can receive the money the exact same day that you apply and the loan amount is deposited direct to your account. Do bear in mind, that the time it takes for you to access the money ultimately depends on your bank provider and how quickly they process the lender's payment.
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