Small Personal Loans

Discover a range of small personal loans through zaving, customized to suit your financial needs.

Last updated by Zaving Editorial Team, on January 19th, 2024

Are you in need of small personal loans? If you need some urgent cash to get you through a tight spot, you can turn to zaving to help you explore your options. Our online service makes applying for a loan quick, easy, and hassle-free. If your loan is approved, cash can land in your bank account straight away – it's as simple as that! Start the application process right here today with zaving.

What are small personal loans and how do they work?

Small personal loans are modest-sized loans typically ranging from a few hundred to a few thousand dollars, designed to cover immediate financial needs. These loans are unsecured, meaning they don't require collateral like a car or home. They can be obtained from banks, credit unions, online lenders, or other financial institutions.

The process usually involves applying for a loan amount based on your financial situation and creditworthiness. Lenders will review your credit history, income, employment status, and other relevant factors to assess your eligibility. If approved, you'll receive the loan amount, often deposited directly into your bank account.

Repayment terms vary, but small personal loans often have fixed monthly payments over a set period, typically ranging from a few months to a couple of years. Interest rates can be fixed or variable, depending on the lender and your credit profile.

These loans can serve various purposes, from covering unexpected expenses like medical bills or car repairs to consolidating debt or making small purchases. However, it's crucial to manage these loans responsibly to avoid potential financial strain or adversely impacting your credit score.

Overall, small personal loans offer flexibility and quick access to funds but should be used judiciously and repaid on time to avoid additional fees and interest charges.

How are small personal loans different from payday loans?

  • Small personal loans and payday loans can both be used to access quick cash, but they differ significantly in their terms, costs, and suitability for different financial situations.
  • Small personal loans are unsecured loans, meaning they don't require collateral like a car or house. They typically range from $2,000 to $5,000 and are repaid over 12 to 60 months. Interest rates are typically lower, ranging from 6% to 36%.
  • Small personal loans are better suited for larger expenses, such as debt consolidation, home repairs, or medical expenses. They are also suitable for borrowers with good to fair credit, as they offer more favorable terms.
  • Payday loans are also unsecured loans, typically ranging from $50 to $1,000 and repaid within 2 to 4 weeks. However, interest rates are extremely high, ranging from 391% to 782%.
  • Payday loans are designed for short-term emergencies and borrowers with limited credit options. They should be used as a last resort due to their high cost and potential to trap borrowers in a cycle of debt.

The main differences between small personal loans and payday loans include:

  • Loan amount: Small personal loans offer larger loan amounts, while payday loans are limited to smaller amounts.
  • Repayment term: Small personal loans have longer repayment terms, allowing for more manageable monthly payments. Payday loans have very short repayment terms, leading to high-pressure repayment demands.
  • Interest rate: Small personal loans have significantly lower interest rates than payday loans, reducing the overall cost of borrowing.
  • Credit requirements: Small personal loans typically require good to fair credit, while payday loans may accept borrowers with bad credit or no credit history.

Can I get a small personal loan with bad credit?

You may be able to get a small personal loan with bad credit. While your credit score will affect the interest rate you qualify for, there are lenders who specialize in loans for borrowers with bad credit. They might scrutinize other factors like income stability, employment status, or overall financial health to determine your eligibility.

Also keep in mind that having bad credit might limit your options or result in higher interest rates or stricter terms.

Here are some tips for getting a small personal loan with bad credit:

  • Shop around for the best interest rate. Not all lenders are created equal, so it's important to compare interest rates from multiple lenders before you choose one. You can get quotes online or from your local bank or credit union.
  • Be prepared to provide documentation. Lenders will need to verify your income and employment, so be prepared to provide documentation such as pay stubs, W-2s, and bank statements.
  • Consider a cosigner. If you have a friend or family member with good credit, they may be willing to cosign your loan. This can help you qualify for a lower interest rate.
  • Make a plan for how you will repay the loan. Before you take out a loan, make sure you have a plan for how you will repay it. This will help you avoid missing payments and damaging your credit score.

More of your frequently asked questions about payday loans

How can I improve my credit score?

Raising your credit score requires crucial measures: check reports for errors, ensure timely bill payments, and manage credit card balances below 30% of the limit. Maintain a consistent credit history, diversify credit types, and limit new accounts. Investigate credit-building options and seek advice from a credit counselor for ongoing improvement.

How quickly can I get a small personal loan?

The timeline for acquiring a small personal loan is contingent upon several factors, including the lender's policies, your creditworthiness, and the intricacy of your loan application. Nevertheless, upon approval, you can anticipate receiving your loan funds within one to five business days.

Are there restrictions on what I can use my small personal loan for?

Small personal loans provide borrowers with the freedom to utilize the funds in various ways, unlike specialized loans like mortgages or car loans, which typically have strict restrictions on usage. This flexibility allows borrowers to consolidate debt, cover medical expenses, make home repairs, or address unexpected costs. However, it's advisable to consult with your lender regarding any potential limitations or specific terms associated with the loan.

How do I choose a small personal loan?

When picking a small personal loan, assess your financial requirements, compare interest rates from various lenders, closely examine the APR, review loan terms, evaluate your credit status, consider cosigning possibilities, compare associated fees, scrutinize the fine print, and seek guidance if necessary.