Personal loans, as the name suggests, are taken for personal consumption. It has no restrictions or limits, unlike mortgages and car loans. It can be used when someone is short on funds or need urgent cash to repair a car or appliance, sustain an education, or to pay for another debt. Here are a few more things about personal cheap loans to understand them better.
Introducing Cheap Loans
Basically, it’s an unsecured loan taken by a borrower from a bank, traditional lending facility, or an online platform, to meet various purposes. It is provided for loan seekers who will meet the criteria set by the lender such as the income level, employment details, credit history, repayment capacity, etc.
Cheap loans won’t require security from any asset, like a car or a home. This means that the loan provider cannot auction anything you own should you choose to default on the loan. Nevertheless, this would create a negative impact on your credit rating mostly because it is a high-risk loan. As a result, creating a new line of credit is almost impossible due to a bad credit score. Being unsecured also means that the interest rate is higher compared to advances that use home, gold, or car as a security. Therefore, if you’re looking for cheap loans, you can opt for a secured one instead; otherwise, you may spend time comparing various lenders to know who offers the best rate.
The purpose of the loan is almost unlimited; you can use it to settle minor bills, buy a new gadget, or as a pocket money when traveling and the lender will not monitor its use. You can also use personal cheap loans for small home improvement, marriage-related expenses, purchasing a new appliance, or to attend a medical expense. It is also useful when you want to start a small business or you just want to invest, as a down payment for your dream home, car repair, etc.
Every personal loan provider has their own criteria but generally, it includes the loan seeker’s age, income, occupation, residence or citizenship, and the capacity to repay the loan back. Availing the personal loan online is easy and surprisingly fast. Nowadays, there’s no need to wait for weeks or months just to obtain the money you need. As long as you have a regular source of income, you can avail the loan with almost no hassle.
When it comes to availing the loan, the lender is most likely to approve borrowers who are regularly employed. However, borrowers who are self-employed or recipients of benefits or pension can still find a loan provider who will accommodate their requests. As long as they have solid proof of income, they can take out a loan successfully. However, their eligibility is still affected by their credit history and employment.
Maximum Loan Duration Of Personal Cheap Loans
Personal loans are considered as short-term loans but unlike payday loans, their duration is longer and can last from 1 year up to 5 years. The length of the repayment period depends on every case and the loan’s terms and conditions.
When it comes to the disbursal of the loan, banks may issue an account payee check or draft within 7 working days or more. Again, this depends on every lender. Meanwhile, there are loan companies who may transfer the fund to your bank account automatically rather than meet you in person and provide a physical check.
How Much Can One Borrow?
The amount a borrower can borrower normally depends on his income. Your employment may also affect the money you can receive from the lender – meaning, a salaried individual may receive a higher or lower amount than a self-employed. Any outstanding debts under the borrower’s name may also influence the personal loan amount. In most cases, especially cheap loans acquired from banks and conventional lenders, the credit score will affect the cash released. The higher the credit rating, the bigger the loan amount offered; the lower the credit remark, the smaller the loan amount provided.
When it comes to the minimum loan amount offered, every lender has its own term. Make sure ask the loan provider first if they can provide the amount you need before you apply.
Taking Out Cheap Loans
As mentioned, personal loans are unsecured, thus making the loan more expensive compared to a secured debt. Nonetheless, there are still ways on how you can find cheap loans that will suit your needs. You may start by shopping and comparing banks or online loan providers. Some of the key factors you should consider are the interest rates, Annual Percentage Rate (APR), repayment term, processing fees, etc.
You may ask referrals from the people you know and make a shortlist out of the loan companies they’ve provided, then you can proceed with the manual research. If you have little time to do a background check, you can use loan comparison sites – or sites which have gathered all the necessary details about various lenders. This will save you time by comparing different companies one by one; however, your options might be limited.
Otherwise, you may look for a loan broker who offers free service. This professional has the right skill and knowledge in helping you find the right match. They also have a wide access to various lenders. Some of which you may have never heard off, thus giving you more options. The job of the loan broker is to help you find a lender or cheap loans that will meet your needs and preferences. However, just be sure that you’re dealing with a licensed loan broker and lender before you submit a loan application or confidential details. Checking out with the credit bureau can help you find out if the loan provider is legitimate to operate in your state or not.
305.9% APR. £400 borrowed for 90 days.
Total amount repayable is £561.92 in 3 monthly instalments of £187.31.
Interest charged is £161.92, interest rate 161.9% (variable)
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Rates from 45.3% APR to 1575% APR – we provide a no obligation quote, your APR will be based on your personal circumstances