I need a small loan – what are my options?
First of all – what exactly is a ‘small loan’? It’s tricky – like most things, it’s relative and what you might consider a small amount of money might be a fortune to someone else. Most personal unsecured loans start at £1,000 but typically, the smaller loans come with higher annual percentage rates (APR) which is the total amount of interest (plus fees) you’ll pay on top of your loan amount.
But if you don’t fancy paying interest worth nearly a third of your actual loan amount then there are sensible alternatives. Consider a credit card with a 0% interest period on purchases. Paying it off within the 0% timeframe means you’re only paying back what you’ve borrowed and miss out on hefty interest charges altogether (as long as you keep up the minimum monthly payments as well.)
Some current accounts offer overdraft facilities with better (or zero) interest rates, so if you only need a very small amount of money then this could be an alternative. If you don’t have an overdraft facility then speak to your bank, it’s usually fairly hassle free to arrange one and it could give you instant access to a bit more cash to keep things ticking over.