Small Personal Loans
Fundamentals of borrowing a personal loan
A personal loan, also known as a cash loan, is a type of loan that can be borrowed from both public and private banks. Whether small personal loans or big ones, you can use the borrowed amount for any purpose at your own discretion. There was a time when getting a personal loan was more difficult than other types of loans. However, with the changed financial scenario, while millions of people go through financial hardship, getting such loans has become much easier and faster than ever before. Nowadays, many people apply for and take out personal loans to meet their individual financial needs.
Personal loans – Basic facts
Here are some points that you must know before taking out a personal loan and getting a financial supply to manage your financial obligations caused by medical emergencies, college admission, delinquent debts or anything else.
Unsecured loans – Personal loans are unsecured loans that don’t require you to furnish any asset as collateral. Therefore, even if you fail to pay back the loan, your lender can’t seize or garnish your property for loan repayment. However, they can report late payments to the credit bureaus, assign a collection agency or file a lawsuit against they default borrower. Since personal loans are unsecured ones, sometimes borrowers face problems in getting a personal loan.
Fixed rate of interest – A fixed rate of interest is charged for both big and small personal loans. This interest rate doesn’t get changed during the term of the loan. Interest rates on personal loans are charged on the basis of your credit rating. It means, if you have better credit, you’re likely to be charged lower rate of interest and vice versa. However, some personal loans come with an adjustable rate of interest, which changes after a certain interval of time.
Fixed amount – The amount of personal loan that you’re entitled to get depends on your credit rating. It can range anywhere from 1,000 USD to 50,000 USD. If you have better credit rating, you can borrow more money, but if you have poor credit, you’re mostly likely to be eligible for small personal loans. Some banks impose a low cap on personal loan amount. For instance, you’re eligible to borrow a maximum of 15,000 USD. However, you can make a better deal with a bank which you’ve already have worked with.
Fixed term – Most personal loans have a fixed loan repayment term, which is usually stated in months like 12 months, 24 months, 36 months, 48 months and 60 months. Loans with longer payment tenure reduce the monthly repayment amount, but need you paying more in interest than that of a short period personal loan. Short period personal loans are normally come up with lower rate of interest. Personal loans can’t be generally extended beyond 60 months.
Personal loans – How to apply
You can apply for a personal loan in two ways, either from the bank which you already have a savings account with or from an online lender.
1. Bank offered personal loan – It’s better that you take out a personal loan from the bank which you have a relationship with. If you’re looking for a bigger amount of personal loan, you must try to get it from a public bank, even though you may need to meet strict criteria. The bank may want to know the purpose of taking out the loan. They may also offer you a better option than a personal loan for serving your purpose. When it comes to taking out a personal loan, you must be careful about choosing the amount of loan. You should borrow an amount that you can afford to pay off easily.
2. Online personal loan – Online lenders would be better options for borrowing small personal loans. If you’re looking for a smaller amount of loan which doesn’t fall into the category of large traditional loans like a mortgage or a card loan, you can get help on the Internet. This is an excellent resource of coming up with potential lenders interested in lending you money when you really need it. Here are the steps to apply for a personal loan through Internet.
Knowing credit score and credit risk – This is the first and foremost step to apply for a personal loan online. You must know you credit rating. You should also know how the credit risk will be presented to your lender. Get the free copy of your credit report and dispute any sort of inaccuracy to the respective authority. Fix the dispute before applying for a personal loan.
Assessing present market rate – Shop around and conduct a virtual survey to know the present market interest rates. It would help you negotiate with your lender and fix a better deal with lower interest rate. You may also do basic calculations.
Evaluating the options – You may be offered with a number of lending options to choose from. Carefully choose one which suits both your need and affordability to paying off the loan. Compare deals offered by different lenders like a credit union, a local lender, a reputed nationwide lender and a public bank. You can also consider the option of microlending, if you’re interested in small personal loans.
Using online tools – You should always verify the legitimacy of the lender. You can do it using online application tools that help you get all information you need regarding the lender as well as the lending procedure.
Whether looking for online small personal loans or bank-presented big loans, you should always read the offered documents including loan agreement carefully. Avoid working with a lender that offers undue advantages. Make sure you spend the loan amount prudently and pay it back within the stipulated time.
EasyFinance is the most trusted resource of online small personal loans. We offer you loans even without credit check when you really need it.