Not all of us can afford to save up for different emergencies that we may encounter. Thus, it’s pretty expected to go through some financial difficulty in case of an unforeseeable event.
If you don’t have enough money at hand, there’s more than one way to get through rough times, other than having to ask a friend or a family member.
The first thing you can do is use a credit card to cover up unexpected expenses; that’s to say that the credit card offers enough balance. Alternatively, you can get a loan, either a payday loan or a mini loan.
As you can tell from the title, what we’ll focus on in this article is mini personal loans guaranteed approval. However, we’ll compare them to credit card loans, as well as emergency payday loans so that you can choose the best option according to the situation.
How Do Mini Loans Work?
A mini loan isn’t so different from a traditional loan guarantor; the only difference, of course, is that you’ll take out a smaller amount. What’s the minimum amount to have? There’s no rule! Each creditor sets their own minimum. Some lenders will offer you as little as $1,000; others won’t offer less than $3,000 or even $5,000.
As for the requirements of the loan, it’ll still depend on the lender, but if you have a good credit score, you have nothing to worry about.
Things like your income, whether it’s from a job or a Centrelink program, are always considered when you’re applying for a loan. However, with a mini loan, your source of income is rarely a reason for rejection because the amount is small, so chances are, you’ll be able to repay it anyways.
Having a personal asset is another factor that makes lenders more confident about lending you the money because, in the worst-case scenario, they’d still get their money back.
How Is a Mini Loan Different from a Payday Loan?
As mini easy low income loans usually don’t have the same terms larger loans have, they’re always put in comparison with Payday loans micro. A payday loan is a short-term loan that offers borrowers small amounts as well, yet it’s totally different from a mini loan in more than just one aspect; here’s how:
Surprisingly, a mini loan can offer you way more money than a payday loan. As the former can be as much as $5,000, a payday loan rarely exceeds $1,000 with a minimum of $300.
Even if a mini loan has a relatively short repayment period, it’s not as short as a payday loan. The latter should be paid as soon as you receive your next paycheck. In a way, it’s like receiving advance payment. Meanwhile, a mini loan can be repaid over an entire year if that’s what works best for you.
As previously mentioned, a mini loan requires a good credit score. Although you can still find online lenders who offer bad credit loans, that’s not the standard for such loans. On the other hand, you don’t need a good credit score to take out a payday loan because the amount you get is too small.
Fees and Interest Rates
Most applicants who apply for a payday loan have bad credit, which makes them too vulnerable for creditors. This, together with the flexible lending terms, make these loans more costly than mini loans.
In other words, this pre approval bond loan comes with more expensive fees and much higher interest rates that sometimes reach 500% of the original amount. A mini loan will never cost as much; on the contrary, you can find many competitive offers.
Is It Better to Get A Mini Loan or Use a Credit Card?
A mini loan is a much better option than using a credit card because it has better repayment terms. Also, the interest rates on credit cards aren’t as high as payday loans. Still, they’re higher than those applied on mini loans. Keep in mind that with a credit card, you have to repay the entire amount at once, with a short grace period.
That said, a mini loan can be repaid over a longer duration. Additionally, dealing with an online lender is way more flexible than dealing with the bank and having to settle for more strict terms and conditions.
Lastly, if you have any trouble with repaying a mini loan, you can always contact the lender to be shifted to another repayment plan. This is not much of an option with credit card loans.
Can I Get a Mini Loan with a Bad Credit?
The lower your credit score is, the more limited your options will be. If you have a fair credit score, you can still find some good offers; it just won’t be as easy. If your credit score is less than average, you can either look for a bad credit loan or payday loan providers. In such a case, we recommend opting for the lowest interest rate possible to avoid being in more debt.
No one likes being in debt, but in case things go south, a mini loan or second chance loans Australia can be a good solution. For the future, you might want to consider taking a side job to make some extra that you can save for emergencies. As for the time being, a min loan is the most cost-effective way for someone with a good credit score to get over unexpected obstacles that require a bit more than what they have at hand. Would you like to know how do bad credit loans work? Apply for a loan today from Perfect Payday.