Small loans are perfect if you just want to borrow a small amount (hence the name). Usually with a small loan, you borrow a fixed amount over a fixed term and often pay a fixed amount of interest. This allows you to know exactly what you’re paying each month, which is great if you want to plan it into your monthly budget. In short, that’s just one small loan advantage you can capitalise on.
So: why choose a small personal loan? Read below to learn more about them.
How much is a small loan?
A small personal loan can start from as little as £500. Once you’re approved to receive the loan, you will pay the money back through fixed monthly repayments, including any interest and fees.
Can small loans help my credit score?
Yes and no. Like all borrowing, it all depends on your actions. If you repay your loan in full and keep on top of your monthly repayments, you could potentially improve your credit score. But all borrowing, however small, leaves a footprint on your credit file. So it’s worth taking some time to make sure you can afford the repayments.
I need a small loan – what are my options?
If you’re looking for a small loan, there are a few different options you could consider. Each option has advantages and disadvantages, so be sure to do some research.
Increase your overdraft
Overdrafts can be an alternative to a personal loan. They’re fairly flexible and relatively easy to set up with your current bank account. Just make sure you’re always aware of any fees and charges involved in this form of borrowing.
0% credit card
A 0% interest credit card is an option if you want to avoid paying interest on the money you borrow. However, they’re often only interest-free for a limited time, so make sure you’re aware of all the terms, conditions and costs involved in setting one up.
Ask a friend or relative
If possible, you could ask a relative or friend to help you out before going to a financial provider. This type of financial assistance can be beneficial as it won’t impact your credit score. However, it’s important you both agree on a repayment term before you borrow the money.
Sell things and save money
Most of us have a few things in the back of cupboards or in the garage that we’ve forgotten about. An alternative to borrowing could be to sell these unwanted items and raise some funds. Perhaps even think about cancelling some luxuries like gym memberships or a few nights out until you’ve raised the money you need.
Why is my credit score important?
Your credit score is what everyone looks at. It’s your entire financial history and will affect every financial partnership you get into. Mobile phone contracts, loans, car finance…everything. So, as you’d expect, you should always look after it by making sure you never borrow more than you afford.
How can I check my eligibility for a small personal loan?
To take out a small loan you can check your eligibility online or over the phone through us. We’ll check your eligibility with our panel of UK lenders. Our search doesn’t affect your credit score.