When your car is in need of repair, it can easily feel like a financial crisis. You rely on it to get to work–but you can’t currently afford to fix it.
If, like the majority of the population, you currently have some form of debt, we understand that you might be unsure as to whether or not applying for small personal loans is really the best choice for you.
However, the truth is that often, they have more affordable financing options than a credit card does. Plus, you’ll love the flexibility that small personal loans online offer when it comes to how you can spend your money.
Even if your credit isn’t exactly in the best shape, there are still small personal loans for bad credit available to you.
Ready to learn more about how you can use personal loans to fix your car?
If so, then keep on reading.
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What Are Small Personal Loans for Bad Credit?
Before we get into anything more complicated, let’s first make sure that you fully understand what small personal loans are.
In general, these loans will have much smaller principal amounts than other types of loans (usually between $500 and about $2500). Should you need more than that in order to pay for your car repairs, then a standard personal loan may be a better fit for you.
You’ll pay the loan back over a period of a few months or even a few years through a set monthly payment.
In general, they have much lower interest rates and fee structures than other kinds of loans. Even if the interest rates may initially look higher than you’d like, remember that, because you’re actually borrowing a smaller amount of cash?
The payments will be much more manageable.
In some cases, you may be able to get a small personal loan from a bank. However, it’s also incredibly easy to apply for small personal loans online.
Doing this also allows you to compare offers from multiple lenders at the same time.
In addition to using small personal loans for auto repairs, you can also use them to go on vacation, pay for a wedding, repay your larger dents, or even finance your education.
The Top Benefits of Small Personal Loans
There are countless reasons why applying for small personal loans online might be the best way to finance your car repairs.
First of all, depending on the specific lender that you work with, you may be able to get the funds in your account within the next business day. Especially if you rely on your car to get you to work or to pick up your children, this timeline is a huge asset to you.
Additionally, if you have bad credit, small personal loans are an excellent way for you to build back up a much stronger credit history. Make sure you find a lender that’s can offer no credit small personal loans.
The application process for small personal loans is also much less complicated than it is for other types of loans. In most cases, you’ll fill out a basic application form, provide your driver’s license and social security number, and perhaps an easy financial questionnaire.
Small personal loans also don’t require you to put up any collateral, because they are unsecured loans. This takes off a huge amount of anxiety for many borrowers.
Plus, because of the nature of the loan, you can use the funds however you’d like (in this case, likely to fix your car). There are no conditions or rules about how you have to spend the money from a small personal loan.
Additionally, small personal loans are an excellent alternative to opening up a new credit card. While you might think that plastic is the way to go, the truth is that credit cards actually have a higher interest rate than most personal loans do.
In some cases, you’re forced to pay a whopping 15% APR financing on your credit card balance. However, depending on your current financial situation, you’ll likely be able to find a personal loan with a much lower interest rate.
What to Know About Applying for Small Personal Loans Online
Now that you know a little more about how small personal loans work, and the benefits of applying for one?
Let’s talk about how the application process actually works.
First of all, you need to make sure you meet the basic conditions. You’ll need to be at least 18 years of age, and you’ll need to have a bank account. You’ll also need to prove that you have a source of income so that lenders know you’re able to pay the loan back.
In most cases, you should look for loans that require monthly payments that fall between 5-15% of your income every month.
Depending on the lender, you may also need to be able to prove that you have a credit history, as well as to show your credit score.
A lower credit score doesn’t necessarily mean that you’ll be rejected for small personal loans, so don’t panic if yours isn’t where you’d like it to be. Small personal loans with bad credit are possible.
In many cases, online lenders can check your financial history without it affecting your credit score. So, don’t be afraid to apply for multiple options.
You may also need to meet a minimum monthly income requirement, as set by the lender. However, if you’re currently in bankruptcy, you will not be able to get an acceptance for a small personal loan.
Before you commit to a loan, make sure that you understand any fees associated with the loan. Some lenders may charge what’s called an origination fee, which can be anywhere from one to five percent of the total loan.
Make sure that the fee doesn’t price you out of the loan–when in doubt, try to gauge the overall flexibility of the lender you want to work with.
What Else to Know Before Applying for a Small Personal Loan
There are a few other important things that you’ll need to take into consideration before you make any final decisions about your small personal loan.
First of all, make sure that you truly can pay back the amount that you owe within a set time frame. Take a look at your current income levels, as well as the amount of other debt that you might have.
Your goal should be to pay back the loan as soon as possible. If this means that you have to borrow a smaller amount than you initially thought, then so be it.
You should also take a look at the overall interest rates associated with the loans. Whenever possible, compare these rates and any fees associated with the loan. You may even be able to use an offer you got from one lender as a bargaining chip with another.
If the interest rate is too high, then ask yourself whether or not applying for the loan is truly worth it.
Finally, decide whether or not another kind of loan might be a better fit for your current financial needs.
For example, if you need an even smaller amount, you might opt for a payday loan. This is a good option for when you know you’ll have a certain amount of money in the near future. However, you’re just waiting on your next paycheck to come through in order to have it in your bank account.
When in doubt, take the time to do your research before you rush into one type of loan over another.
Ready to Use Small Personal Loans to Fix Your Car?
We hope that this post has helped you to better understand how you can use small personal loans to fix your car (or for any other purpose).
Remember that, more than anything else, choosing a loan with affordable repayment options is incredibly important. You don’t want to get in over your head and potentially further damage your credit.
Of course, we understand that you simply don’t always have the time to sort through multiple lenders to find the best interest rates when it comes to small personal loans.
Luckily, we can help you with that.
Our online marketplace searches through many different lenders, in order to ensure that you get the best possible option for your personal loan.
Ready to start the application process and get your finances back on track?
Apply now to get started with us–we promise that it’s much easier than you might think.