Every person has cash emergencies from time to time. Not everyone has enough savings to pay for unexpected expenses. Applying online for a small loan is an excellent way to cover these costs in no time.
Whether you are considering it to improve your home or cover unexpected costs, small loans may help boost you financially in a time of need.
What are Small Loans?
These loans are typically in the range of $2500 – $4500. They also tend to have shorter terms than larger loans of around 13 months to 24 months. However, most small loan lenders offer you the flexibility to pick the loan term that would best suit you.
Secured vs Unsecured Personal Loans
When you apply for personal loans, you have two options when it comes to security – either a secured or unsecured loan.
1) Secured Personal Loans
Secured personal loans are secured against the asset you own (like your home, car, etc.). Basically, this means you are providing something valuable to the lender to cover the risk of not meeting your loan repayments. For these loans, you will need to provide details of your asset to verify the value.
In case you are not able to repay the borrowed amount, the lender will sell the security to cover the loan value. One of the upsides to secured loans is that they generally offer better interest rates than unsecured loans because they are less risky to the lender.
2) Unsecured Personal Loans
Unsecured personal loans do not require the borrower to put forward any asset or form of security to the lender. In this case, the lender usually puts more focus on other factors like your credit rating, income, etc. to determine your ability to repay a loan.
If the borrower is unable to repay the loan, lenders will still take action to recover the money. Given the increased risk and higher interest rates of unsecured loans, lenders typically only offer them for small loan amounts.
How Can I Get a Small Loan?
To apply for small loans, you need to find a reputed loan provider in your area. Safrock works with large online lenders that are transparent with their charges and fees.
While we don’t specialise in lending, we could help you find a lender capable of offering you the cash you need. Here are some things to take into account before applying:
- You are not actually paying down your debt by getting a loan. You are getting a different kind of debt
- Carefully match charges. Non-reputed loan providers may tell you to pay far more than the actual loan principal.
Can You Get a Small Loan Online?
Yes, of course! You can get small loans online. Safrock is a trusted and accredited lender finder in Australia. We can match you with an online lender that is most likely to lend you the cash you need.
You can apply for a loan through us at any time by submitting an application form.
Can I Get a Small Loan with No Credit?
Yes. Even if you have a not-so-perfect credit history, many lenders will consider your application. A lender may evaluate your existing financial situation rather than taking into account just your credit score. So it all comes down to your individual situation and the lender you ultimately apply with.
Why Does My Credit Score Matter?
A credit score is a three-digit number given by the bank. It is usually based on the credit report.
Credit providers and lenders use credit scores to decide whether to lend you money. In some cases, it can even impact how much they will lend you.
These scores range from 0 to 1200. The main issue arises when your credit score falls below 510, as this is considered below average. This is why it’s so important to keep track of your score.
Remember, the more it dips, the riskier you are in the eyes of lenders and creditors. A low score also increases the chances of getting high-interest rates on small loans.
Once you know your score, you can take the necessary steps to enhance it. This will help you to grab better financial deals with time.
Note: Credit scores are dynamic and are subject to change over time. Your score may change depending on the nature and amount of loan.
Learn more about credit score on MoneySmart!
Can I Get a Loan without a Job?
Out of work does not necessarily mean out of luck when it comes to getting small loans or other types of loans. Remember, even if you are not employed, you can still get a loan at Safrock.
Being approved will rely on whether you can prove that you will make regular payments on time and are receiving some type of consistent income. Generally, a lender will look at the following when considering an unemployed applicant:
- a) Source of income
If you are unemployed, you will need to be receiving an alternative form of income to get approved for a loan. Other forms of income that lenders may accept include:
- Centrelink payments
- Social Security Income
- Government Annuity
- b) Credit history
Lenders will want to evaluate how often you have made payments on time previously. They may also look for the negative things in your credit report.
- c) Credit score
Maintaining a good credit score is essential. It will help you in a situation when you do not have any job, but require a loan to meet your financial needs.
Note: Be careful about the type of loan you consider when you do not have any job. Always make sure you’ve done your research before you settle on a lender.
How Do You Get Approved for a Loan?
Each lender will have its own eligibility requirements. You will qualify if you can show some form of income that proves that you can meet monthly payments. Lenders will need to review your financial records to verify the income source.
Here are the tips you can follow to get fast loan approval:
- a) Cater to the Eligibility Criteria
Regardless of the loan you are applying; you need to:
- Be 18 years old
- Hold Australian citizenship or Australian permanent residency
- Live in Australia
- Meet minimum income requirements
- Receive regular income for the last 90 days is preferred but not mandatory
- Have a valid email or mobile number
- Be able to provide 100 points of identification
- b) Have Proper Documentation
It’s always a good idea to make sure you have these details handy when applying:
- Personal contact information (like name, mobile number and email address);
- Reason for your loan;
- MyGov information (if you are receiving Centrelink benefits);
- Internet banking details;
- Employment information (if applicable);
- c) Apply for the Correct Amount
Borrow the loan amount as per your lifestyle and income. If your revenue is not enough to support the repayments you are applying for, you’re unlikely to be approved.
- d) Build a Good Bank Account History
Effective management of finances is a signal that you are ready to take on a loan. Make sure you do not overdraw your bank account. It will help you avoid charges and create a good account history.
- e) Maintain an Excellent Savings Record
Another great way to signify that you are financially responsible is to maintain a good savings record. For this, you need to put a set amount every week or month into your savings account.
- f) Ensure that You Have a Valid Identification Means
Without a valid ID proof, lenders will not be able to verify your identity. So make sure you have everything ready to go.
Need Some Extra Cash? Choose Safrock!
If you need a financial boost, Safrock is the ultimate solution. We’re a reputable lender-finding service that offers secured personal loans. The best part is that the online service is 100% free to use Australia-wide.
Find out more about small loans by heading out to our FAQ page or talk to our skilled team. They will be happy to answer all the queries that you may have.