Ever found yourself in a situation where an unexpected bill or expense pops up out of nowhere, and you are just left scratching your head, wondering how to cover it? Well, that’s where small loans come in to save the day for you! These small loans come in like a superhero and offer you a quick fix when you need it the most.
But what is a small loan? How does it work? If you are looking for answers to these questions, you have reached the right place. Here, with this blog, let’s learn more about small loans, their features, benefits, and more.
What is a Small Loan?
What you would do if you needed some cash to sort out your financial problem, whether it is repairing your car or paying for medical bills? Easy small loans can help you in such situations. With a small loan, you can borrow a modest amount of money, usually until your next payday. You also do not need any collateral to avail these small loans and hence, it is quite easy to get one.
How Small Loan Works?
Small loans offer quick access to small funds for individuals or businesses. The application process usually involves providing personal or business details and undergoing a credit check. Upon approval, borrowers receive funds with defined terms including interest rates, repayment schedules, and any applicable fees. Repayment is then structured over time and this includes both principal and interest.
Features of Small Loan
Small loans are versatile and super handy. Here are some of the features of these loans:
- Low Loan Amounts: Small loans provide relatively small sums of money, usually smaller compared to traditional bank loans.
- Shorter Terms: The repayment periods for small loans are usually shorter than those for larger loaHow to Appns. They may range from a few months to a few years, depending on the lender and the amount borrowed.
- Quick Approval and Disbursement: Small loans are designed to provide fast access to funds, sometimes within the same day of approval.
- Flexible Eligibility Criteria: Lenders offering small loans may have more flexible eligibility requirements compared to traditional banks. This can make small loans accessible to individuals with varying credit scores or financial histories.
- Higher Interest Rates: Due to higher risk associated with lending smaller amounts, small loans often come with higher interest rates compared to larger loans.
- Variety of Purposes: Small loans can be used for various purposes, including covering unexpected expenses, paying bills, financing small purchases, etc.
Benefits of Small Loan
Small loans offer several benefits for borrowers:
Convenience:Small loans offer a convenient solution for unexpected expenses and this eliminates the need to wait for your next paycheck.
Affordability:With fixed interest rates and repayment terms, small loans are often more affordable than other forms of credit.
Build Credit:If you make timely repayment of small loans, you can help improve your credit score.
Also Read:6 Dos and Don’ts While Applying for an Instant Loan
Factors Affecting Your Eligibility for a Small Personal Loan
Here are the major factors that affect your eligibility for a small personal loan:
Credit Score:Your credit score is a significant factor in determining your eligibility. While some lenders may offer small loans to individuals with poor credit, a higher credit score generally increases approval chances.
Income:Lenders usually require proof of stable income to ensure you have the financial capacity to repay the loan. A stable and sufficient income stream reassures lenders that you can meet the repayment obligations on time.
Employment History:A steady job history can positively impact your eligibility for a small loan. Lenders often prefer borrowers with a stable employment record, as it indicates a reliable source of income.
Debt-to-Income Ratio:Lenders usually assess your debt-to-income ratio to check your ability to manage additional debt. This ratio compares your monthly debt payments to your monthly income. A lower DTI means that you have more income available to cover loan payments.
Documents Required to Apply for a Small Loan
Here’s what you would need to get started:
Identification Proof (ID):Lenders require proof of your identity to verify your personal details. It could be a driver’s licence, passport, or government-issued ID card.
Proof of Income:Documents such as pay slips and bank statements showing regular deposits, or tax returns can serve as proof of income.
Proof of Address:A government-issued ID card with your address, utility bill, or rental agreement can serve as proof of residency.
Bank Details: Providing your bank details is important for the disbursement of funds once your loan is approved. You would need to provide information such as your bank account number and account holder name.Also Read: What Are The Basic Requirements To Apply For An Instant Personal Loan
How to Apply for a Small Loan Online?
Here’s a detailed guide on how to apply for a small loan online using the CASHe platform:
Step 1: Download CASHe App:Start by downloading the CASHe app onto your smartphone. The app is available for both iOS and Android devices.
Step 2: Sign Up:Once the app is installed, create an account by providing the required information. This includes your email address, mobile number, and creating a password. Verify your mobile number through the OTP (One-Time Password) sent to your phone to complete the registration process.
Step 3: Apply for the Loan:After signing up, log in to your CASHe account and go to the loan application section within the app. Enter the desired loan amount you need and provide any additional information requested by the app. This may include details such as purpose of the loan, employment status, and income details.
Step 4: Upload Documents:You would then need to upload the necessary documents mentioned earlier such as identification, proof of income, proof of address, and bank details.
Step 5: Wait for Approval:Once you have submitted your loan application and documents, sit tight while the CASHe team reviews your application.
Step 6: Receive Funds:If your loan application is approved, the loan amount would be disbursed directly to your bank account.
Conclusion
CASHe offers a convenient and accessible solution for short-term financial needs with instant personal loans. With features like quick approval, flexible repayment options, and minimal documentation, these best small loans would provide peace of mind during emergencies. Whether it is covering unexpected expenses or managing cash flow gaps, small loans can be a lifeline in times of need. So, apply for a short-term loan with CASHe today!
