Small Personal Loans: What You Should Know
Table of Contents
We all need a little help sometimes. Maybe you need a little extra money and you don’t have time to save up the entire amount on your own. Other times, you may run into unexpected emergency expenses, such as an expensive car repair or hospital visit, that you have to cover immediately but you don’t have the cash on hand. These are situations when small personal loans are the perfect solution.
Small loans and short-term loans are simple to request and receive, especially if you’re looking for small personal loans online. Let’s look at the details of this type of personal financing to better understand how you can apply.
What Are Small Personal Loans?
Small personal loans can range from as little as a few hundred dollars to upwards of a few thousand dollars. Average amounts tend to fall between a 2,000 dollar loan and a 3,000 dollar loan. This type of financing is typically chosen when there is an immediate need for cash to pay unexpected expenses. Sometimes people use this type of financing to consolidate their other debts with a lower interest rate or to make specific home renovations. Other times, there may be a larger-than-usual bill that you don’t have enough money to cover. If you find yourself in any of these situations, a short-term personal loan can help you avoid late payment penalties by providing the cash immediately to cover the expense.
What Are the Best Short-Term Loans?
If you’re looking at the options available for small personal loans, there are a few things you should consider in order to ensure you get the best deal for your needs. It’s absolutely vital to understand all of the loan’s terms and conditions so you don’t end up committing to something that may cause you more financial hardship. The best short-term loans are ones that help you achieve your immediate goals by giving you liquidity, without putting an undue economic burden on your monthly budget.
Here are some of the factors to consider when deciding between short-term loans:
- Only take out a loan for the amount you need; don’t over-finance. If you only need a $2,500 loan, it makes no sense to take out a $4,000 loan.
- Try to find a lender that specializes in this type of financing. Lenders catering to clients who need smaller amounts can often give you a better rate and more flexible terms.
- Consider taking on the highest monthly payment you can afford based on your established monthly budget. This way, you can pay the loan back faster and ultimately pay less interest.
How Do You Apply for Small Personal Loans Online?
It’s easy to apply for small personal loans online, because nowadays there are various different lenders who specialize in this type of financing. One of the first steps in applying for this type of loan online is to do a search for lenders who offer the loan amount you’re seeking.
Once you have an initial list of potential lenders, compare their offers. Look at the differences in interest rates, monthly payment amounts, and the length of the loan term.
Ways to Filter Loan Options
You can usually search for a short-term loan online by filtering results based on the lowest annual percentage rate (APR), which is the annualized representation of the amount of interest you will pay on the loan, or based on the lowest monthly loan payment. Keep in mind that the lower the payment you select, the longer it will take for you to pay back the loan and thus, the more interest you will pay.
Average APR for Small Personal Loans
You may be wondering what a reasonable APR would be for this type of financing. There is quite a range of options on the market, and APRs for small personal loans can vary from as low as around 6% to as high as 35% (or even higher). Of course, if you have a low credit score (generally under 580), you’re likely to be charged a higher APR. However, don’t let that discourage you from applying for this type of loan.
Steer Clear of Predatory Lenders
Not all lenders are reputable or charge reasonable interest rates. For example, short-term high APR loan lenders often charge exorbitantly high rates, such as $15 for every $100 borrowed, with very short time frames for payback. These lenders typically cater to people with low credit scores, but there are other alternatives you should explore.
Work With Tower Loan
The financial experts at Tower Loan are ready to help you find the perfect small personal loan for your needs. You can apply quickly online, and with the fixed monthly payments over a fixed period of time, you can easily integrate this type of financing into your current overall budget. If you need a little financial help in your life today, apply at Tower Loan for a fast, reliable solution.