Moolr.co.uk | Short term loans

Ways To Borrow Small Amounts

Borrowing money is commonplace. We’ve all done it at one point or another, and almost all of us are currently repaying debt. It could be a loan, a mortgage, a new automobile, or something else else. It’s nothing to be embarrassed about. Many people require a short-term loan when something unexpected occurs in their lives. With that in mind, Moolr has examined four options for those looking to borrow small amounts.

Borrow Small Amounts – Personal Loans

The most obvious option is to obtain a personal loan. The benefits are numerous: you receive funds promptly to deal with anything life throws at you. The payments will be spread out over a short period of time, so the debt will not hang over your head for years. You can also boost your credit rating by making regular payments, if that is an issue.
The disadvantage is that the amount you can borrow will be limited. They aren’t appropriate for large-scale borrowing. In addition, because the repayment time is so short, the interest rates will be higher.

A Good Credit Rating Helps

A personal loan can be used to borrow anything from £500 to £35,000, so it’s worth considering even if you only need a small amount.
However, because the lowest rates are for larger loans, often between £7500 and £15000, you may have to pay a higher rate for a smaller personal loan. Some lenders will not lend less than £1000, so your options may be limited.
If you have a bad credit history, a guarantor loan may be a better option than a conventional personal loan, but you will need the assistance of a friend or family member.

Credit Cards

A credit card is one of the most widely used goods in the UK; almost everyone has one. The advantages of utilising one for finances are that it can be a cost-effective solution if you can secure a 0% purchase card, you will have immediate access to funds, and regular repayments will help you improve your credit rating. However, if your credit score is poor, you may find it difficult to obtain the finest deals available. Withdrawing cash from a machine can be expensive, and if you don’t pay off the entire sum before the welcome offer ends, you’ll be charged with hefty interest rates on the remaining balance.

Overdrafts

Another quick and simple solution.
You can borrow money from your bank account with an authorised overdraft by withdrawing cash or using your debit card. Furthermore, several banks provide 0% overdrafts for small sums, making this one of the most cost-effective borrowing options. Overdraft rates are typically between 15-20% APR, however extra costs may apply.
However, while an overdraft is convenient, it frequently comes with penalties for individuals who use it. It will also be unavailable to anyone with a low credit rating. If you go over your limit at any point, you will face steep penalties. And in recent years, the above rates have rocketed. This is not the best way to borrow, and if you do it, repay quickly.

Borrow Small Amounts – Family/Friends

This is frequently the least expensive alternative. Friends and family are unlikely to charge you fees for borrowing money or to impose financial penalties if you do not repay the money on time. Furthermore, such an arrangement will have no impact on your credit score, and the loan’s terms are unrestricted. You must consent to this.
However, combining business with pleasure is never a good idea. Failure to make payments may have an impact on your relationship, and there is no legal recourse if something goes wrong on either side. No one is safeguarded.
While borrowing money from friends or relatives can be inexpensive and convenient, it isn’t always the best decision.

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