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Those who are in need of loans do not always want a lot of money. Whether the funds are required to tide you over until the next pay check, or small loans to offset a debt, pay for medical expenses. There are different lenders who are available to give small loans.
Small loans come in differing forms and if you are in need of a little amount to support your finances, it will be given to you after you apply. Small loans are loan that are given to individuals just like any other loan but this time the money involved is a small.
Amounts for small loans that are given out can be in the range below $1000.
Small loans and bad credit
Most people fuss about their credit score when it comes to loans no matter the amount, whether big or small. It becomes a daily headache of “will this loan be granted to me”?.
You should not just give up because your credit is not good enough to qualify you for a loan.
The news is even with bad credit, you can still have access to small loans. Borrowers are usually very worried that their loan requests will not be granted when their credit score is not too good.
Despite this, lenders are still in the business of giving small loans to those whose credit is not too great.
Loans seekers are not always looking for large amounts of money. They just need a small amount to take care of expenses.
If you are having trouble with your current credit situation but still need a loan, you can find a lender who will be willing to give you just the amount you need.
The only thing to remember is that no matter how small the amount is, its still a loan and needs to be paid back.
This will enable the lender have a good history about you for the credit bureaus. What may happen is that you could be paying higher rates if you have small loans offered to you with bad credit than those with good credit.
You may not be able to negotiate to the rate that you want. The only way out is to find the lender that offers the rate you can afford so that you do not end up defaulting on the loan.
When you are able to pay back, you qualify for more loans when you need them.
Where to get small loans
Loans such as mortgages and auto loans get huge publicity from lenders and borrowers also. They are loans that have huge amounts involved. This huge publicity sometimes overshadows the importance of small loans until it gets to the point where you are in need of it. These are a few places where small loans can be gotten when you need financial assistance.
Credit unions are a good option for small loans. They are mainly not-for-profit organizations but rather promote the sense of community. Their rates are competitive and are likely to approve small loans. When you do not want to go in for expensive payday loans, small loans are a better alternative.
You don’t need to have a perfect credit score or history to be approved. You get the services of good representatives and small loans at a good rate. Credit unions charge a very minimal amount for the small loans that they give out.
Online lenders can also give out small loans. As a matter of fact, they prove as one of the easiest ways of getting small loans right at the time you need them.
Getting small loans from online lenders is considered as quick and convenient. Also online lenders do give to those who have bad credit. They may also check your creditworthiness using alternative means just so you can qualify for the loan.
They are very flexible in their dealings with those seeking small loans. These online lenders include the peer-to-peer sites and non-bank lenders.
Their rates are reasonable and you do not have to take on the headache of prepayment penalties or variable rates.
Despite the ease of which online lenders make small loans available to those who need them, borrowers are still advised to search for lenders and compare the offers. You should also check out for any application fee that they may charge.
This will enable you to budget accordingly when its time to pay back.
Banks are also available to give small loans. The truth is we are used to taking large amounts from banks that when you want to go in for a small loan, it may seem a bit awkward at first. Imagine going to a bank to borrow $300 or $500.
It will plainly baffle the bank that someone needs a small amount of that nature. It may seem too small in the eyes of the banker, but to the one who needs it, getting access to that amount makes a world of difference to their finances.
It is much easier when you have a checking account with the bank, the money will be directly deposited in the account when its ready. Some banks may give you a credit card instead as against giving you small loans.
You are given the card to pay for your little expenses and pay off the monthly balance to keep using it.
Friends and family
Domestic and internal help when it comes to finances has been an old way by which many people have resorted to when they faced a financial challenge. Money has a way of ruining relationships even if it is a small loan.
If not handled carefully, it can cause tension among family members. Expectations of the small loan you are taking needs to be managed well so that any relationship among the family will be safeguarded.
This will also ensure that all things go according to plan and one persons doesn’t feel short-changed.
To get rid of this, it is good to have an agreement to formalize the small loans you take. This agreement should detail payments, interest and any other item that states information about the loan.
This will help to govern the relationship with family and friends before, during and after you take small loans from them.
This is a type of financial arrangement between the employee and the company that allows you to receive a portion of your salary in advance.
This type of small loans that are available to help employees out of their shortfalls with money.
If your employer agrees to give you this loan, you would not have to tend to either family, banks or other avenues to get small loans. It is a much easier way of getting finance.
Some companies give small loans by having a look at your bank account or checking the timesheet.
Platforms like Earnin enables you to borrow small loans from an app. They only take back the money after your monthly paycheck comes in. This is an effective way of getting finance when you are cash strapped.
Payroll advance seeks to ensure that employees are not cash strapped.
Some mistakes to avoid with small loans
It is key to explore some details when going in for small loans so as to avoid going in for something that will not be beneficial in the end. These checks will enable you have the best experience when it comes to taking small loans and prevent you from falling into difficult situations after taking the loan.
These are some of the mistakes to avoid:
1. Little research
The mistake that sometimes loan seekers make is that of not researching well before choosing small loans. The issue is that because the loan amount is small, there is less time spent looking for the loans than if they were looking for larger loans.
Those in need of small loans want the process to be fast forwarded so they can get their loans quickly. But you will realize that if you take some time off to do your research well you can get access to good rates that can save you a lot of money.
2. Being in a rush for your loan to be processed
With the fast paced world we are in, “fast” seems to rule everything that is done. People want everything to be up speed and this is no different when it comes to getting loans.
With smaller loans, because the amount involved is not that huge, in the mind of the borrower, it shouldn’t take long for the loan should be processed.
But hastiness can cause a longer term of consequences when it comes to repayment. It is better to take your time and compare the different options for small loans and their terms rather than running ahead of the lender to make demands that will cost you in the long run.
3. Limiting yourself to the nearest option
One of the immediate actions that seems convenient to those looking for small loans is to limit themselves to the nearest lender up the street or sometimes closest to them.
What you may not be aware is that there are different lenders with good rates awaiting you. Therefore, you should not jump at the nearest lender that you see.
With a little bit of a diligent search, which will of course take longer, you can get the best deals even if the lender is far away. Furthermore, with the introduction of the online way of doing business, there is no need to panic when it comes to applying for loans.
Once you are able to verify that it’s a reputable lender, you can have access to your small loan.
No matter how small the amount is, its advised not to choose just any lender at all that you meet in your search. Too much convenience can be costly.
4. Not reading the fine print from the lender
You would have to pay close attention to what is written in the document. This is because there could be special terms conditions or even promotions that the lender might be offering.
If you do not take time to read, you may miss the important details that are being communicated. Reading the fine print will prevent you from being caught in any unprepared surprises from the lender.
Rather you would enjoy the benefits or promotions that the lender has put forward in the loan agreement if there is any.
5. Conducting a simple internet search
Doing a simple internet search will mean doing a great disservice to yourself when you are ready to choose a lender to give you small loans.
Because there is a vast option of lenders that you can choose from instead of limiting yourself to a small scope of lenders. With some lenders, they provide a platform where all the loan companies are all put there.
The loan seeker will just enter into that system and choose the best lender giving good rates and fees. The sites for the searches for small loans gives a breakdown and cost of each loan that you want to take. Its better to take some time off to search than to rush the process.
Requirements for small loans
• The person applying must be 18yrs and above
• They should have an active bank account
• They should be able to prove that they have a verifiable source of monthly income
• The applicant should be a permanent resident of the country he /she is applying in
How to get small loans
Ideally, it is often advised that you work on your credit well before applying for a loan of any type. This is no different with small loans.
When you are able to do this it will be to your own advantage because you can then get low interest rates on the loans you get. But even if you are not able to have a good credit score before applying for small loans, there are lenders who will give you small loans with bad credit.
Before applying for the loans also, you should have all your financial documents (other personal loans you may have, utility bill payments, credit card payments and other debts that you are currently paying).
Your pay stubs or other streams of income should additionally be at hand. You may not need all of these requirements every time for small loans, but it’s better to have it on hand so that when the lender asks of them, they will be readily available.
It enables the lender smooth processing of your loan request.
Some uses of small loans
1. Medical expenses
Illness can sometimes come unexpectedly and it becomes more difficult if you do not have enough money to cater to the medical expenses. This is where small loans can come in handy to help you pay for the medical bills. They are effective for all kinds of unexpected expenses.
2. Paying for a vacation
Going on a vacation can sometimes only be a wishful thought that may never materialize if you do not have the resources to cover travel cost. You can go in for small loans for the vacation that you have so wished to embark on. Small loans can make your wishes come true. But like any loan, you would have to structure your repayment schedule.
When you have an overgrown garden, leaky taps and other little makeovers that the house needs, it can be done with small loans. These are expenses that may be outside your normal budget that will require extra support. Small loans are a option.
4. Paying for relocating into a new place
Relocating to a new house or even an office comes with a lot of cost. Therefore if you’re hard-pressed and need to pay for some of the services that are being rendered to you, you can opt for small loan.
These small loans will ensure that you have enough to pay the moving company or other small expenses that will be incurred.
You can get the small loans you need after considering the terms of the loan being offered to you.
5. For weddings
Weddings come with a lot of jubilation and happiness. But closely associated with this is cost. Planning, preparing and organizing weddings can cause a drain in finances and resources.
Due to this, people go in for small loans to enable them offset some the expenses that their budget has not been able to capture.
6. Paying credit card debts
To help pay for credit card debts you can go in for small loans. Because credit card debt is so crucial to your credit score, it is important to use the best means you can get to cater for them so that your credit score will not be affected in the end.
Small loans also additionally have lower interest rates because the amount involved is not like that of larger loan facilities. Thus it will not be an additional debt burden to you when you take them.
Small loans vs Micro Loans
Micro loans are fast catching on in the world of lending for many developing nations especially. A micro loan in some instances is sometimes interchangeably used with small loans. Micro loans and small loans both serve the purpose of easing the financial problems that individuals have all over the world.
They really come in handy for those who need them. Small self help groups do go in for small loans and micro loans to purchase inputs for their farms or to buy more equipment to expand their production. Both small loans and micro loans serve a great purpose in the co-operative industry.
Small loans and micro loans have usually short terms of paying back. The duration can range from months to under three years with interest .
Both small loans and micro loans have a low default rate. Borrowers of these loans because the amount involved is not too huge are able to stick their repayment plan.
Lenders who give microloans give it mainly as a benefit to help humankind and not necessarily for profit-making. Small loans have some form of profitability that the lender is expecting from the loans they give out.
Micro loan platforms have an increased online presence that ensures transparency in their dealings. This enables lenders have access to any information about the loan they have given out.
Private lenders give small loans
Private investors do take a big chunk of the responsibility of giving out small loans to those who need them.
Their concentration is especially for small businesses. Small loans from private lenders do come with a bit of a higher interest rate than if you would have gone to the bank.
When dealing with private lenders you should not pay any upfront fees until you are sure about the process of getting the loan.
This is because unscrupulous persons have also preyed on people and taken upfront fees without giving them the loans as promised.
You will therefore have to take a second look at any request from the lender so as to avoid being scammed.
Despite this, private lenders are really helpful in extending loans to those who need them. The small loans they give enable many businesses and individuals to get the funds they need.
The side of the bargain to keep is to make the repayment regularly so as to qualify for other loans when you need them.
Private Lenders are mainly looking for the profitability of the businesses that they put their money into.
Small loans have proven themselves to be the best solution to those who need a financial push. Whether its needed by a business or individuals to support their finances, small loans are available.
There are several avenues that small loans can be gotten from. It will depend on the terms and conditions that the lender puts forward because the interest rates varies from lender to lender.
Once you meet all the requirements, you can get the small loans that are available to you.
Small loans are however not to be relied on as a monthly support to your income but only for emergencies because the more loans that you take, the more debt you may incur. This is not too beneficial if you want to qualify for other loans when you need them.
Disclaimer: All loans offered through this website are subject to credit and underwriting approval. AfterLoans.ca is a lead referral company, not a lender. AfterLoans only works with financial service providers that adhere to Canadian laws and regulations. Our lenders lend from $500-$5,000. Loans amortization is between 6-36 months. APRs range from 19.99% to 55%. The actual APR charged will depend on the lender’s assessment of your credit profile. For example, on a $1000 loan borrowed for 12 months at 29.9%, the monthly payment will be $97.24; with a total repayment, including interest, of $1166.88 There is also lender’s optional loan protection policy. In the event of a missed payment an insufficient funds fee of around 45$ may be charged (dependent on the lender). If you default on your loan payment plan the lender may terminate the plan and the remaining balance will become payable immediately. Our lenders employ fair debt collection practices, but will pursue the payment of Outstanding debts to the full extent that Canadian law allows.