In certain situations, many consumers urgently need smaller amounts of up to $ 5,000, which they cannot raise themselves. Whether it is the invoice for a car repair or the purchase of a new television, a small loan is a good solution. However, it is far from possible for all Best banks and savings banks to get a loan for such a small amount. Customers are often referred to their existing overdraft facility instead, but small loans are usually much cheaper in comparison.
Advantages of small loans over the overdraft facility
As a rule, the interest rates charged on installment loans are much lower than the overdraft interest on the overdraft facility. Many banks take interest that is well over 10 percent for the provision of an overdraft. In contrast, a small loan is already available at interest rates of less than 8 percent.
In addition, the interest on a consumer loan is fixed for the entire term, while it can be changed at any time with an overdraft. Another advantage that small loans have in comparison to overdrafts is the high level of security that they offer. Because while a bank overdraft facility can be canceled in whole or in part at any time without giving reasons, this is not possible with an installment loan.
A small loan from the Internet
If you cannot get a loan from your house bank or savings bank for a small amount, you should look for a suitable lender on the Internet. Numerous domestic and foreign online banks also grant loans on very low loan amounts, sometimes even from a loan amount of 500 USD.
In any case, however, a credit check is carried out, for which the customer must provide various information about his economic situation. An inquiry is also usually made to private credit checker. If there is a negative entry about the customer, the loan application is rejected.
The selection of a suitable small loan
Under no circumstances should consumers take the first-ever micro loan offered to them. Small loans can only be judged properly in comparison. For this reason, you should thoroughly inform yourself about the level of the usual market interest rate for such loans and compare it with various loan offers. There are numerous financial portals on the Internet on which such comparisons are shown.
Their design is so user-friendly that you can understand everything without any problems, even without special knowledge about loans. Usually, a compilation is presented on such financial portals, on which particularly recommendable small loans are presented in detail. As an additional service, you can use a practical link to go to the website of the selected bank.