Small Personal Loans

A small personal loan may be an excellent option when you're in a financial bind. Borrowers use small personal loans in a variety of financial situations, such as unexpected car repairs, medical expenses, and home maintenance.

Let's take a closer look at small personal loans, how they work, and their benefits.

Types of small personal loans

Small personal loans can provide a lifeline to anyone who needs money fast. Understanding the different types of loans available can help you make an informed decision that aligns with your specific needs and credit situation.

Payday loans

Also known as cash advances, payday loans are short-term, small-dollar loans typically due on your next payday. They are highly accessible and convenient for those in immediate need of cash.

Installment loans

Installment loans provide a lump sum of money that you repay over a set period in equal monthly payments. Online lenders are more likely to offer these loans to individuals with bad credit, providing flexible repayment terms and competitive interest rates.

Lines of credit

A personal line of credit is a flexible form of borrowing that gives you access to a certain amount of funds, which you can draw upon as needed. Lines of credit are a nice option because you can access extra cash when needed and only pay interest on the amount drawn, not the full amount you're approved for.

Benefits of taking out a small personal loan

Taking out a personal loan can be a convenient solution if you're facing financial difficulties and have bad credit. But, as with any financing option, it's essential to do your research and consider the benefits (and drawbacks) of each type of loan.

Here are just a few benefits of taking out a small personal loan:

Better terms for higher borrowing amounts

With bad credit, it can be difficult to secure larger loan amounts from traditional lenders. Fortunately, small personal loans from non-traditional lenders often come with more favorable terms, allowing you to borrow higher amounts, provided that you meet the necessary criteria.

Use the money for what you need

Small personal loans can be used for a variety of purposes. Whether you need money for hospital bills, home repairs, or debt consolidation, a small personal loan can provide the financial support you need.

How do I choose a reputable lender?

While many traditional banks and credit unions have shied away from offering small personal loans to borrowers with bad or fair credit, payday lenders like Advance America have stepped in to fill this gap, expanding their loan products to offer a wider range of financial solutions.

Understanding what to look for in a lender can help you find the right solution for your needs. Here are some key factors to consider:

The lender’s history and reputation

Before applying for a loan, research the lender's reputation. How long have they been in business? Are they a well-known lender?

To help narrow down your options, read customer reviews and ratings to get an idea of their level of customer service and reliability. A reputable lender will have mostly positive feedback from borrowers who have had a positive experience.

Interest rates and loan fees

Interest rates and loan fees can vary widely among lenders. Shop around to ensure you find a reputable lender that offers competitive rates and reasonable fees. Be wary of any lenders who aren't transparent about what they charge.

Loan application process

A reputable lender will have a straightforward application process. Look for lenders who provide clear information about their requirements, approval times, and overall funding process. Avoid completing any loan application that is too confusing or could hide hidden terms and fees.

Customer support

Good customer service is essential when dealing with financial matters. Look for a lender that offers accessible and knowledgeable customer service. Ideally, you should be able to contact them via phone, email, or live chat. Whether online or in person, lenders should be responsive, attentive, and willing to address your questions.

Loan repayment options

Reputable lenders will be up front about their payment options, often offering multiple ways to repay your loan. Automatic payments, for example, can be a helpful tool for borrowers with bad credit because the lender automatically deducts the payment amount from your bank account on the due date. This eliminates the need for you to remember to make the payment yourself, reducing the chance of late payments.

Prefer to make payments in person or pay off your loan early? Make sure the lender has a brick-and-mortar location and no early repayment penalties.

Lender credentials

Ensure the lender is licensed and registered to operate in your state. This information is typically available on their website or can be verified by checking with your state's regulatory agency. Dealing with a licensed lender provides an added layer of protection and increases the likelihood that they adhere to industry standards.

Should I apply for a small personal loan online or at a traditional bank?

When it comes to getting a small personal loan, you have options. Banks, credit unions, payday lenders, and online lenders are the main types of lenders you'll come across.

Traditional financial institutions may offer lower interest rates for small personal loans, but they often have a more extensive application process. This could disqualify anyone with less-than-perfect credit.

On the other hand, payday loan providers and online lenders often specialize in small personal loans for bad credit. They understand that your credit history is not the only factor that determines your creditworthiness. By considering other factors such as your income, employment history, and overall financial situation, online lenders can often provide loans to applicants with bad credit.

Online lenders also have a more streamlined application process. You can usually complete the entire process online from the comfort of your own home. This makes it convenient and accessible for anyone in need of a small personal loan.

How do I apply for a small personal loan with bad credit?

Applications vary between personal loan lenders, but you can typically expect a similar application process. In general, here's how the application process works:

Choose whether to apply for a loan online or in person

Do you prefer to speak with your lender face-to-face? Or do you like the convenience of applying online? Decide how you want to apply and either find your nearest branch or navigate to the online application.

Gather the required documents for the loan application

Reputable lenders require official documents to verify your identity, income, and employment. Common documents you may need to provide include proof of income (such as recent paystubs or tax returns), your checking account number (for funding and automatic payments), proof of address, and a government-issued ID. Having these items in hand will speed up the application process.

Fill out the small personal loan application

When you're ready, complete the personal loan application with accurate and up-to-date information. Be prepared to provide details about your income, employment history, monthly expenses, and any other relevant financial information. Double-check your application before submitting to avoid any errors and funding delays.

Wait for your loan approval decision

After submitting your application, the lender will review your information. If the lender offers instant approval decisions, you should know whether you're approved within moments of submitting the application. In other cases, it may take up to 24 hours or a few days to receive your approval decision.

Receive your loan funds

Once you've accepted the loan offer and signed the agreement, the lender will disburse the loan funds to your bank account. The timing of fund disbursement varies among lenders, but many offer same-day funding options.

Apply for a small personal loan from Advance America

Taking out a small personal loan with bad credit doesn't have to be a complicated process. In fact, small personal loans offer several advantages, including competitive interest rates, flexible minimum loan amounts, and the freedom to use the money as you see fit. As with any loan, however, remember to only borrow what you can comfortably repay.

When you're stuck in an urgent financial situation, a small personal loan from Advance America may be the solution you need. Apply online 24/7 or visit your nearest branch to discuss your options.