There are many kinds of loans, but small loans are especially useful for certain times in our lives These are loans where you can typically borrow anywhere from $100 to $5000. What are some facts about this kind of a loan?
Applying for Small Loans Does Not Require Collateral
If you were to take out a mortgage to buy a house, the house that you want to buy is collateral. If you don’t pay your mortgage, the bank can take your house. However, with loans for small amounts, no collateral is required. To apply for one of these loans, all you typically need is a source of income and a bank account. You also need to be able to borrow money in your particular state. Each state has its own laws.
How Do You Pay This Kind Of Loan Back?
Small loans are exactly how they sound; you borrow a small amount of money, typically $100 to $5000. You will pay it back depending on the terms of the loan. In many cases, you’ll have a set monthly amount, plus interest, that you will pay for a fixed amount of time. In cases of PayDay loans, for example, you typically have only two weeks to pay the loan back or by your next paycheck. Because the amount is smaller than with other loans, it’s set up for you to pay it back quickly.
What Can You Do With Loans Like These?
Loans for small amounts are good for emergencies, to pay an unexpected bill, to fix something that was damaged, etc.
The best way to apply for one of these loans is to do a thorough Internet search. Check with your state’s Better Business Bureau to be sure that the company you want to work with is a legitimate loan company.