What are the best ways to get a small loan?

Just because you need a bit of extra cash, that does not mean that you need to borrow thousands of pounds. Often, a few hundred pounds, borrowed over a short period, is all you need to get you out of a sticky situation.so, here we run through the options that you have available if you need a small loan to tide you over. Here’s our views on the best ways to get a small loan.

How do small loans work?

While some lenders will process small loan requests very quickly, and get the money to your account within three days or less, others take longer – meaning that you may have to wait up a few weeks for the cash to arrive.

Do Your Research

If
you need money fast, it therefore makes sense to check how long you will have
to wait for a loan before applying for it.

With personal loan amounts ranging from £1000 to £25000 it is also
worth checking how much you can borrow. This will depend on your income, your
credit score and your existing credit commitments.

How do
small loans affect my credit score?

Any borrowing, whether on a mortgage, credit card or loan, is
noted on your credit file. Banks and other lenders will therefore be able to
see when you take out a small loan, as well as whether you miss a repayment,
for example. What’s more, failure to make payments can affect the score.

While increasing your borrowing will make it less likely that you will
be accepted for further credit during the life of the loan, the long-term impact
of a small loan on your credit score will depend on how you manage it. Make all
the payments on time, and the record could even stand you in better stead with
lenders, after your small loan, but miss one or more payment dates and your
score will certainly fall.

What are
the alternatives?

The higher cost of a small loan means that it is often more
sensible to find another way to raise some extra cash if possible. Ways to do
this include asking a relative or friend to lend you some money in the short
term and having a clear out and selling unwanted possessions online, for
example on an auction website.

Another option is to use the overdraft facility on your current
account, if you have one. Most authorised current account overdrafts charge
interest at about 18%. However, some charge less or even 0% up to a certain
limit. What’s more, overdraft facilities can often be arranged immediately,
making them a great way to get your hands on some extra cash quickly.