Sometimes, just because you’re a little short on cash – doesn’t mean you want to get yourself into a huge debt with excessive loans. Many people find themselves in positions wherein they only require a small loan to help them boost their balance and pay for an essential item. However, many customers find that they struggle to not only find the right small loan for their needs, but ensure that they’re getting the cheapest option in terms of interest rates and more.
In this article, we’ll be taking a brief look at some of the best solutions for small loans, from unsecured options, to credit cards, and various other choices that you might not have considered when it comes to giving you that extra boost of cash that you need. With a little luck, one of the following solutions will help you to get your hands on that cash you need, without having to spend a huge amount on obscene interest rates.
Small Unsecured Loans
In some cases, you may find that you’re capable of applying for a small, unsecured loan. These are simply small amounts of money that you borrow without having to place any collateral up to keep the bank safe. Of course, your chances of getting a small unsecured loan will balance largely on exactly how much you want to borrow, and what your average credit rating looks like. While some borrowers will give minimal loans, you may find that the amount you want to borrow comes with an extremely high APR.
With a little comparison shopping, you may discover that some other lenders will give you small amounts of money for rates that are more competitive – but these providers may only be willing to go as low as £1000 on their offers, while others can go as low as £250. Deciding if an unsecured loan is the right option for your needs is right for your needs will depend on how much you need to borrow exactly, and what deals are available at any given time for that amount.
Remember, no matter where you go, if you want to borrow through an unsecured loan, you will need to have a good credit rating. The nature of an unsecured loan means that many lenders want to look for ways to minimise the risk that they have to take on as much as possible.
Payday or Short Term Small Loans
For some people, payday loans seem like the ideal option for small, short-term access to cash. After all, these loans allow you to access a small amount of money for either a few weeks, or a few days until you are next paid. Unfortunately, payday loan companies can charge a great deal in terms of interest rates, which could mean that you end up getting yourself into quite a lot of debt. Fortunately, the Financial Conduct Authority have taken some steps to reduce the unfairness of these loans by capping the interest rate at no more than 0.8% per day.
Even though you cannot pay as much interest as you once may have on payday loans, the truth is that these options should often be used only as an emergency option when there are no other choices available to you. If you can look elsewhere for a small loan or borrow your money using a different strategy then it’s usually best simply to do this.
Getting a Small Credit Card Loan
If you have a credit card, then you may be able to sort your small loan needs out very easily. Using a credit card to get your hands on a little extra cash can be incredibly cost effective, particularly if you use your card wisely. Remember, there are a wide range of different credit cards on the market today that offer 0% on some purchases and if you pay the amount of money you borrow during your period for interest-free spending your little loan will not cost anything at all.
Just remember that in most cases the 0% rate will only apply to the purchases that you make with your credit card. This means that you can’t simply withdraw cash – you need to use your card to make the purchases you need. Alternatively, if you cannot pay off the balance that you borrow during your credit card period you might be able to transfer the balance owed onto a 0% balance transfer card, and this will often mean paying a transfer fee, but your small loan should remain interest free for a longer period of time.
Another option is to use a money transfer to get access to extra cash from your credit card. Some credit cards will offer transfers that are free from fees to your current account, and all you need to do for this is pay a small handling fee.