You might be a meticulous saver, carefully sorting out your monthly expenses. Sometimes, unexpected expenses can crop up and you might not have sufficient cash to pay for them.
Overview of Small Loans
If you are not familiar with how small loans work, then you might want to upgrade your knowledge. Small loans are small-term loans that can be used to pay off unexpected expenses such as repairs, bills, or medical expenses.
Looking for a small cash loan? If yes, then you can check out small loans offered by companies such as PM Loans situated in Manchester, UK. The company aims at reducing all your hassles of finding the right lender for small loans.
Based on your requirement, they will match you up with credible lenders, fill out the applications online and you are good to go.
When it comes to small loans, you first need to know your eligibility criteria. If you are a UK resident and above 18 years of age, then you are eligible for small loans.
In addition to this, you also need to have the required income that can prove to the loan companies that you are in a position to pay off your loans.
Now, you might be wondering about the proof required by loan companies to grant you small loans.
- Have an active bank account and debit cards
- Prove to the bank that you are not on the verge of bankruptcy
- Provide a valid email address and contact details
- Address of proof of the last 3 years
Once you have submitted the above-mentioned proof along with your application form. The loan companies will validate the same and approve your loan.
Types of Small Loans
Small loans can be classified into:
- Personal loans
- Guarantor loans
- Payday loans
- Line of Credit
- High street loans
- Credit card loans
Personal loans are money that you borrow from banks or other loan companies and can be used for any type of repayment. These can also be used to pay off debts. The repayment timelines for such loans can range from 3 months to 2 years.
In the case of guarantor loans, you borrow money from your friends or family who act as a guarantor on your behalf. Under payday loans, the bank will provide you the loan for a short period, which you need to repay once you received your salary.
Line of credit loans, allow you to borrow specific amounts of cash with a high-interest rate. You need to have a good credit rating to apply for such loans.
High street loans are nothing, but money borrowed from pawn shops or brokers to pay off unexpected expenses. Credit card loans are pre-approved loans on your credit cards. Your bank will look at your repayment history and credit history before giving you such loans.
Understand what type of loan would be suitable for you. Ensure that you are aware of the total loan amount along with the interest that you need to pay. If you are unable to secure loans, you can check for Credit Unions in your locality and seek their help.
When it comes to applying for small loans, ensure that you do your homework. Avoid applying for loans at the spur of the moment and become a victim of paying off loans all your lifetime.