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In the current financial climate we are seeing an increased demand for more flexible lending – small loans that are easy to apply for and nearly instantly available (subject to terms and approval) – to help people meet the stresses and strains when dealing with financial emergencies. By using small loans, this need is being met by offering finance that is often short term and is required for a brief period of time to cover a situation over which someone has no control. Around 90% of people in the UK have used some form of financing at some point in order to help them re-balance their finances and there’s now a wide range of different types of loans that are available, depending on the kind of support you’re looking for. It’s no wonder that many people resort to the help of small same day loans when they need a small helping hand.
Advantages of Using Small Loans
Small loans have a number of advantages over other forms of financing and there are many reasons why small loans have become increasingly more popular. It’s easier to apply for a small loan, for example, and you can repay it more quickly which means that you won’t have a debt hanging over your head for a long period of time. As you’re borrowing for a shorter length of time with small loans there’s less chance of missed repayments and you’ll pay less interest as the length of the loan is shorter.
The advantages of using small loans
- Easy to apply for
- Quick loan repayment
- Less chances of defaulting over a short period
- Less overall interest because of the time span
Disadvantages of using small loans
Using small loans is not encouraged when you have a bigger financial problem that you are dealing with. They are obviously not a solution in this case and can only worsen your situation. You need to contact the moneyadvice service for help in these circumstances. Here are the common disadvantages of using high interest small loans.
- Interest can be high
- Risk of entering a spiral of debt
- Repayment can be tough over a short period
- As with any loan, missed repayment could hurt your credit. Responsible borrowing is mandatory
You may find that borrowing and repaying small loans can be advantageous when it comes to establishing a positive credit history – it’s evidence of being able to borrow and repay within the terms of an agreement and to be able to handle credit. As a result, some lenders will offer you increasingly better terms if you have borrowed and repaid small loans with them a few times. Then of course there’s the advantage that you can keep your finances on the straight and narrow – that, of course, is the whole point of using small loans. Many people find that when control over finances starts to slip then it can be the start of a negative spiral when it comes to money management and so small loans can be an easy way to put a stop to that before things get out of hand
Using small loans also have a number of processing benefits, particularly if you’re applying with a lender that offers a quick turnaround on applications and fast payment. Some small loans applications can be processed and the money paid out within 24 hours – so if you’re in an urgent situation where you need some temporary help fast they’re a much easier option than larger loans. They’re also a much better alternative than illegal forms of finance, such as borrowing from loan sharks, something people often turn to where they need money quickly. Payments are taken by direct debit and so there’s no chance of you forgetting to make them, and you can time the payments to fall on your next payday so you don’t have to worry about not having the cash to make the repayment.
In an increasingly uncertain world we all need a little help and small loans can offer key assistance at just the right time. Small loans for bad credit are also possible with some lenders as small loans may be less risky for lenders.