If you find yourself in a tricky financial situation, there are many different ways you can borrow money – you can ask for help from family and friends if they are able to provide it, you can use a credit card, use lending companies or else take out a loan from a bank. Different types […]
Apply for a Small Loan Today – All Credit Histories Considered!
There are many situations that can put pressure on our finances and in many cases unexpected financial issues seem to pop up when we least expect them, often leading to us struggling to find the cash we desperately need. At Cobra Payday Loans we have already helped many thousands of people secure a small, short term loan. With loans available of any amount from £100 to £5000 from our extensive panel of lenders, give us a try and see if we can help you too.
What Are Small Loans?
A small loan is designed to be an easy and quick solution to a short term financial emergency, often up to £1000 and paid back within a year.
It is not uncommon for people to be caught out by an unexpected financial emergency and you may only be looking to borrow a small amount, according to the MoneyAdviceService, we should have at least 3 months’ worth of our average living expenses saved for emergencies. However, this is not always possible, and emergencies can crop up at the worst times. If your bank balance is running low just before payday, a loan could provide the buffer you need.
In the past many lenders only offered loans for relatively large amounts, however today there are loans available starting from as little as £100. If you need access to a small amount of cash quickly, often loans can be processed quickly, and the cash can be available in your bank account in a matter of hours.
What Are the Benefits of Small Loans?
Short term loans can provide borrowers with a variety of benefits. However, the main benefit of this type of loan is the financial support they can provide when an emergency strikes. In addition, most lenders which specialise in small cash loans, also specialise in same day pay-outs. This means that you can usually apply online and if accepted the money can be in your bank the same day.
What Types Small Loans Are Available?
With so many people searching for little loans, it is only natural that the market contains a variety of options. The following are some of the most popular short-term loans available to those who are looking to borrow a small amount.
Small Payday Loans
Payday loans are a popular form of borrowing, especially if a borrower is only looking to borrow a small amount until their next payday. These loans are often repaid within a few days, with the repayment date set as the borrowers next payday. The loan is repaid in a single instalment, with the interest amount often dependent on the length of the loan term.
These loans tend to be popular because of their speed and accessibility, however, the requirement to repay the loan in full quickly can put a strain on finances. Before borrowing a payday loan, it is important to ensure you can comfortably afford to repay the full loan. If the repayment is missed, additional interest and fees will be charged.
It is also important to ensure that your budget the following month is not stretched too thinly, after making your loan payment. An unrealistic budget could lead to repeat borrowing and you could end up borrowing more than originally planned. If you would like to borrow a loan with a longer repayment period, payday loans are probably not the best option.
Personal loans are a more traditional form of borrowing than payday loans, with repayment terms often ranging from a few months to a few years. If you are looking to borrow a large amount, these loans which allow repayments to be spread over several years tend to offer a more affordable way of borrowing. If you are looking to borrow more than £1,000, a personal loan could provide manageable monthly instalments.
However, if you have a poor credit history, the interest rate charged may be higher than those with a low chance of default. It is also worth noting that smaller monthly repayments over a longer period could end up costing more than a shorter-term loan, as the interest charged will amount to more.
If you have a poor credit history or a low income, you may not be eligible for loans from payday lenders and other personal loan lenders. However, guarantor loans could help you secure a low APR small loan, by adding an additional individual to the loan agreement. The individual must agree to act as a guarantor, so if you default on the repayments, the guarantor will be expected to cover them.
In almost every case the guarantor is a family member or close friend. This is because the guarantor must place a high level of trust in you to repay the loan. In addition, most lenders will expect the guarantor to have a regular income and a good credit score. It is important to ensure you will be able to repay the loan, as defaulting on a guarantor loan could put your relationship at risk.
If you have a credit card, it may be possible to withdraw the money you need as cash. This could be ideal if you already have a credit card, however, if you do not, a new application could take at least a few days. If you are sure you can repay the cash loan within 30 days, this could be a quick and accessible way of borrowing. However, following this timeframe the charges can quickly rise.
High Street Loans
Many UK high streets feature a variety of pawnbrokers, which are willing to offer small cash loans. These high street loans may provide an ideal borrowing option if you need the cash urgently and a high street lender is nearby. However, they are an expensive form of borrowing and you will need to provide security to access the loan.
Online Small Loans
We specialise in helping borrowers find flexible online loans, from a variety of lenders. As a broker, our panel includes both traditional lenders and more alternative loan providers, so you have a higher chance of approval. If you are looking for this type of loan, we can help match you with a lender.
Online loans are designed to be quick and accessible, so all you need to do is enter your personal details into our online form. Let us know how much you are looking to borrow, and the ideal repayment term and we will compare your options, to help you find the ideal loan.
Am I Eligible for a Loan?
Each lender will have its own eligibility criteria, although in general you will need to be aged over 18, a UK resident and you will also need a UK bank account with a debit card. The exact eligibility criteria will vary between lenders; however, all responsible lenders will only consider lending if the repayments are affordable. This means you will need to show that you receive a regular income, with many lenders looking for borrowers to earn at least £750 per month.
The details you provide will be used to conduct an affordability assessment, which will include at least a soft credit check. This will be used to calculate whether the repayment amounts are affordable for your individual situation, income, and current level of borrowing.
It is important to complete the application form carefully, as incorrect, or false information will hold up processing and your loan could be rejected. If you have been refused a loan in the past due to poor credit history, we may still be able to help you find the loan you need.
Can I Borrow a Small Payday Loan If I Have a Poor Credit History?
By partnering with a variety of lenders, those who apply through us have access to a range of lenders which are willing to consider applications from those with a poor credit history. Although some form of credit check will always be completed, our lenders will base their decision on factors such as your current ability to repay the loan and your recent financial management.
All lenders which are regulated by the FCA are legally required to complete a credit check, but you should not let a poor credit score deter you from comparing your short-term loan options. There are many lenders which are willing to consider those with a poor credit history if you can comfortably make the repayments. If a lender is offering loans without a credit check, it is likely they are unregulated, and you will not benefit from the protection provided by the Financial Conduct Authority.
How Do I Apply for a Small Loan Online?
Instead of applying to multiple lenders in the hope of finding the ideal loan for you, we offer a fast and convenient application process. We only include trusted, responsible lenders on our panel and the whole application process is secure and fast. Simply complete our online form and we will pass your details to multiple potential small loan lenders, saving not only time and hassle, but also avoiding having multiple credit checks performed.
How Long Will My Application Take?
Most lenders understand that the applications need to be processed quickly, so many will process, approve and release funds within minutes. However, the speed does vary and the actual availability of funds in your bank account will depend on the individual processing speed of your bank.
If you are looking for quick loans, it can help to have the required information and documentation to hand. For example, the lender may require supporting documents to verify your personal information or income.
How Will I Repay My Small Loan?
Generally, this type of finance is considered as a short term loan, so they will be repaid over a relatively short period of time. For example, a loan of £500 could be repaid over 3 months or even 12 months, depending on your own individual budget.
Many lenders will ask for the loan to be repaid via a Continuous Payment Authority, which is one of the reasons lenders require you to hold a UK bank account with debit card. As a borrower, you will give permission for the lender to deduct the repayments on the agreed date each month.
These dates will be detailed within your loan agreement, so you know exactly when each payment is due to be collected. By repaying your loan on time each month, it may improve your ability to obtain credit in the future. The credit reference agencies are likely to view your ability to repay the loan as a sign of your creditworthiness, so your credit score may improve over time. However, if you miss payments and do not repay the loan in full, this will have a negative impact on your credit score.
How Much Will It Cost to Borrow a Little Loan?
The actual cost of borrowing will vary between lenders and is often determined by several factors, such as your credit history. However, in some situations, the interest charges are fixed. For example, payday lenders are only able to charge a maximum APR of 0.8% of the loan amount daily. In addition, the actual charges are capped, so that the loan will never cost more than 100% of the original amount borrowed.
In general, those with an excellent credit history which repay their loan within a short amount of time, will be offered the best interest rates. If you have a very poor credit history and are looking to spread the repayments over a longer period of time, you may be offered a higher interest rate and the total cost of borrowing will be more.
If your application is approved, the loan agreement will contain information about the total cost of borrowing, the interest charges and any potential fees.
Which Is the Best Small Loan Lender?
As every individual will have their own preferences, there is no particular provider which is the best. Instead, we aim to help you find the best loan for your individual criteria. However, there are several factors which are important to consider when it comes to searching for an ideal lender.
Firstly, you should only borrow from a lender which is authorised and regulated by the FCA. The lender will display their unique reference number on their website and within the loan documentation. A regulated lender will be required to meet the strict professional lending standards which are set by the Financial Conduct Authority.
If you have a poor credit history or have struggled to obtain a loan in the past, the best lenders for you will be those with a high approval rate. If you are looking for quick loans, applying to a lender with a high approval rate will offer a better chance of securing the loan you need quickly.
The affordability of the loans offered is also especially important and naturally, the cost of borrowing will differ. If a lender appears to offer a low APR, it is also important to check that any additional charges and fees are low in comparison to other lenders.
Although a lender may offer a high chance of approval and low interest rates, it is important to remember that borrowing short term loans should be reserved for emergency situations only. The lenders on our panel have been selected based on their ability to offer flexible, affordable, and fast loans, however, you should always ensure the loan repayments are manageable before applying.
Small loans are ideal for unexpected situations, but if you find that your finances are always stretched thinly, a new loan may not be the ideal option for you. Instead, there are various organisations which can offer free financial advice to help you manage your financial difficulties, such as StepChange and Citizens Advice
Latest From Our Blog:
You’re never too young to start thinking about money – especially when it comes to building those responsible habits and practices that can benefit your life further down the line. While many young people go into the world with little money knowledge, a little bit of extra time spent on finances can go a long […]
The coronavirus pandemic across the world has caused many changes in how we run our lives. From how many people we meet outside to those who are struggling to find a new, or a first, job. Financial security of families is a really big concern. According to statistics, about 730,000 people in the UK lost […]