Small loans can be very helpful when you require extra funds for any expenses. They come in all shapes and sizes, so you must understand which size fits your needs. Here are the benefits of these loans:
Help boost your credit score
As you pay down the debt over months, you will see an improvement in your credit score. We report timely payments to credit reference agencies. This will help you borrow money at a lower interest rate in the future.
It can be used for various purposes
Small loans can be used for almost anything, excluding business. When applying for the loan, you will have to inform us of the purpose of using these loans. In addition to emergencies, small loans are ideal for consolidating debts, home improvement, and wedding and moving costs.
Eliminate the need for collateral and guarantor
These short-term loans are unsecured, so you do not have to bear the risk of losing your valuable asset in case of a default. You do not need to arrange a guarantor despite your bad credit score. Therefore, these loans are also called no guarantor loans.
These loans certainly have a few benefits, but they are also subject to some risks. Interest rates can be slightly higher when your credit history is not stellar. Missed payments and defaults will cause late payment fees and penalties.