The small loan is designed so that consumers can use the money to make small wishes come true immediately. Small loans are used to buy new electronic devices such as televisions, computers or laptops. They are also suitable for the purchase of so-called “white goods” such as washing machines, dryers or refrigerators and for other consumer goods that consumers would like to buy but do not currently have liquidity. The small loan is also suitable to use it to pay the repair bill from the car, to finance a vacation trip or simply to get new clothes.
Small loans are characterized by the fact that the loan amounts are relatively low – often less than USD 1,000, that the loan is repaid in fixed monthly installments and is granted on favorable terms.
Even so, even small loans should never be taken spontaneously and carelessly, although the ease with which you get them could tempt you to do so. As with the saying “small cattle also make crap” it is the same with loans. Several carelessly taken small loans quickly lead to a large loan amount that can at some point blow up the financial situation.
Make your own household bill before borrowing
Sensible consumers who do not want to get into debt spontaneously do not take out a loan and check their own performance before they even apply for a loan. The easiest way to do this is to keep a budget book anyway. Only the monthly income has to be compared with the monthly expenditure. The bottom line is the freely disposable income and this should be significantly above the planned rate so that you are always on the safe side.
Small loan or overdraft facility
Some may wonder now whether the disposition loan or the revolving credit card cannot be used for smaller purchases such as a new laptop. However, there is no general statement for this. At the overdraft facility, the experts advise that you only use it to pay larger amounts if you are able to make up for it within three months. If you are not, the overdraft facility, which is known to have much higher interest rates, simply becomes too expensive, so a small loan is the better choice. Also, the credit card should only be chosen as a means of payment if the balance can be completely settled after billing.
Find cheap small loans through the loan comparison
The best way for consumers to find cheap small loans is to make a loan comparison that is offered free of charge by several comparison portals. In this way, you have the opportunity to quickly and easily find the bank that grants the small loan at the most favorable conditions.
With small loans, consumers should make sure that they do not choose a loan that is too long. 24, 36 or 42 months are optimal. Firstly, interest rates are usually lower and secondly, you are debt-free again more quickly. When purchasing TV sets or other high-tech products, the loan should be paid off if the goods are technically out of date and need to be replaced.
Small loan with interest based on creditworthiness
Most banks lend their loans with credit-related interest rates, which means that the advertised rate is almost never the rate that the consumer gets. With such offers, it is advisable to have personal offers prepared by at least two banks and then compare them again in order to finally take out a cheap loan.
Use the small loan for debt rescheduling, Small loans are also suitable when it comes to replacing the overdraft facility or the credit card credit. If you find that you can’t get out of the crumble and therefore have to pay horrific sums of interest every month, you can use a small loan to replace your overdraft facility or credit card balance, thereby saving a lot of money in the future.