7 Small Personal Loans to Consider If You Need Some Extra Cash

Sometimes you need a modest amount of money to cover an unexpected expense or to take advantage of a good deal. If you don’t have the cash, a small personal loan – ranging from a few hundred dollars to thousands – can complete the transaction.

Personal loans can be more affordable than other forms of financing, such as a high-interest credit card or a payday or title loan. And if you have good credit, you may qualify for an attractive rate and low payment. See what types of rates you qualify for today via Credible.

To determine whether a small loan is right for you, you need to understand how they work and how to apply for one. Here’s everything you need to know, starting with the different types available.

While personal loans may be available for up to $100,000, a small personal loan typically costs between $600 and $3,000. This type of loan is money borrowed from a financial institution, such as a bank, credit union, or online lender. Once approved, you pay off the debt by making monthly payments. Terms and interest rates are based on your credit history and score.

There are at least seven types of personal loans you should know about:

1. Unsecured personal loans
2. Secured personal loans
3. Debt Consolidation Loans
4. A personal line of credit
5. Pawnshop
6. Title loan
7. Consigned loan

These installment loans require no collateral and generally require borrowers to have good credit. Without collateral, it’s important that you have a steady income and a good credit score to qualify for lower rates and be approved by a private lender.

SHOULD I USE A PERSONAL LOAN TO CONSOLIDATE DEBT?

This type of personal loan is similar to a credit card, with a revolving amount that is available to borrow again once it is repaid.

A pawnshop offers borrowers a small loan, using a valuable item such as jewelry to secure the loan. If the borrower does not repay the loan within a certain period of time, the pawnshop keeps and sells the collateral item.

This type of loan uses your car’s ownership documents as collateral. If you don’t pay off the loan, you’ll put your car at risk.

This type of loan provides funds borrowed against your future salary.

DOCUMENTS REQUIRED TO APPLY FOR A PERSONAL LOAN

A small personal loan can be a lifesaver in many situations, but only if you know how to use it. By taking the time to make the best choices, you help improve your financial situation in the long run.

Each lender has its own application process and qualification requirements for personal loan borrowers. Lenders typically look for a stable income, a low debt-to-income ratio, and a good credit history. If you want to find the best interest rates, it helps to shop around.

If you need money for an emergency, look for a loan that can be approved and funded quickly. And make sure the loan has clear terms, no hidden fees, and a defined payment schedule.

Most banks, credit unions, and online lenders have an online form to start the application process, which means you can apply at any time.