Apply for just as much as you need with a small personal loan, an option even if you have bad credit.
Fortunately, you have other options for small personal loans as well. These include auto title loans, installment loans and payday loans. Read more about these small personal loan options below and find out which one can best meet your needs.
Can I get a small personal loan in my state?
State laws govern lenders who offer payday loans, restricting aspects like maximum loan amount and loan term. If you live in a state where payday loans are not legal, you can consider getting an installment loan, peer-to-peer loan or auto title loan.
A selection of loans you can apply for
Check the websites of any providers you’re interested in to confirm they operate in your state of residence.
What loan options do you have?
People looking for small personal loans have multiple options to choose from:
- Payday loans. These are essentially small-dollar short term loans, with the loan term typically varying between 14 and 31 days. You have to repay a payday loan in one payment, which is usually on your next payday. The interest is normally higher than with other loan types.
- Debit card payday loans. These loans are like payday loans, but the provider gives you access to your funds through a prepaid card. You can use this card to shop and to withdraw money from ATMs. You can also use the card to get quick access to funds the next time you apply for a loan.
- Installment loans. You can generally borrow more through an installment loan than a payday loan. You repay the loan amount in installments, usually over a 12 to 36-month term.
- Auto title loans. If you have a car or a motorbike you can apply for an auto title loan. In this scenario the car title is used to secure the loan. You repay the loan in installments, and you can look forward to a competitive interest rate because you’re providing some kind of collateral.
- Peer-to-peer loans. Generally sought by those with higher credit scores, these loans are financed by individual investors, or “peers”. You apply online and one or a few investors decide to fund your loan. Your credit score directly impacts the APR you are offered, but the APRs are still usually lower than with payday loans. You can generally borrow between $1,000 and $35,000.
What features do small personal loans offer?
If you’re thinking about a small personal loan, take these issues into consideration:
- What is the interest rate offered? Checking what interest a lender charges is crucial. Some lenders offer standard rates with their loans, while others base the APR offered on your individual application.
- How quick is the turnaround time? The time taken by lenders to process applications and disburse funds varies widely. If you apply in-store you can get your money almost immediately after approval, while online lenders can transfer the money into your bank account within one business day. Peer-to-peer lenders generally take a longer time as investors need to review your application and finance your loan.
- Is bad credit okay? Finding small installment loans and small payday loans for bad credit is not difficult, provided you have a regular source of income. The same is true of peer-to-peer lenders, although you should expect a higher APR with your loan.
- Direct or indirect lenders? There are many small payday loan direct lenders to choose from, and this is also the case with installment loan providers. If you don’t want to carry out extensive research on your own, you can also turn to a free loan matching service.
In all cases, you will have to meet some basic eligibility criteria. You should meet your state’s minimum age requirement, have a steady source of income and be a permanent resident of the US. Your credit score may also affect the annual percentage rate you are offered.
Is there anything to avoid with these loans?
While small bad credit loans can help you get out of tight spots, they can do more harm than good if you don’t repay them on time.
Establish how you’ll repay the loan before you apply. If your budget will be put under a strain to repay the loan then you should reconsider applying. You will have to pay additional fees and charges for late or defaulted payments and late payments it will also affect your credit score.
Make sure you go through the loan’s terms and conditions, because these tell you just how much the loan might end up costing in different scenarios.