4 Instances Where Getting a Small Loan Makes Sense

iQuanti: Not every purchase needs a large loan. Whether you need to cover a car repair bill or fund a home improvement project, sometimes it may make more sense to take out a small loan for certain situations. By understanding where small loans can fit into your broader financial plan, you'll be well on your way to using these kinds of loans to your advantage. Here are four instances where getting a small loan can come in handy: 

Home improvement projects 

Although home refurbishment usually costs a lot less than buying a house, sometimes the price tag on that new toilet or finished basement can get a little out of your range. That's where a small loan can help. 

For home improvement projects, you may want to try an installment loan. You can repay an installment loan through multiple small fixed monthly payments, or installments. This arrangement makes the costs a bit more manageable over time. 

Rent payments 

While you shouldn't resort to paying monthly rent with smaller loans all the time, it can be a good idea if your emergency funds or savings have taken a hit that month. Simply paying off the rent won't end your troubles, though. Make sure to have a plan to pay off that loan and manage your following rent payments. 

A cash advance could come in handy if you're short on rent. Cash advances are quick, short-term loans that are usually paid off within a period of two to four weeks. If you decide to go this route, make sure to pay off the loan as soon as you can. This way, you'll avoid additional interest charges and fees. 

Car repairs 

Car trouble can come out of nowhere, and it can be tough to find money to get the work done, especially if the problems with your car are expensive to fix. A small loan can give you a larger window to pay for repairs while also giving you some time to make room for this cost in your budget. 

For car repairs, you may want to consider a line of credit. A line of credit is a flexible loan that you withdraw funds as needed, up to your set credit limit. You can pay back this loan all at once or over time, and will only pay interest on the funds you borrow. Using a line of credit can allow you to fix your car fast without having to draw from other areas of your budget. 

Medical expenses 

Nobody wants to be surprised by a medical emergency, but when they do happen, they can often carry a higher price tag than you might have expected. A small loan can help you pay for the immediate care you need and put you back on your feet to make payments for the loan over a more comfortable period. 

If you own a car, you could consider a title loan to pay your medical bills. With these secured loans, you'll provide your car title as collateral to receive funds from the lender. Then, you can keep driving your car as you repay the loan. Repayment periods for a title loan can range from a few months to a few years, depending on the lender and loan terms. 

Secure your expenses 

Depending on your situation, a small loan can be a great way to manage your expenses properly and responsibly. Whether it's a cash advance, an installment loan, a line of credit, or a title loan, these lending opportunities can become quite useful in a pinch. So, don't wait to take out a short-term loan. Use a small loan to your advantage and start stabilizing your budget. 

Notice: Information provided in this article is for information purposes only. Consult your financial advisor about your financial circumstances.

Source: iQuanti, Inc.

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Categories: Personal and Family Finances

Tags: financial services, loans, personal finance