There are many ways to get a small loan with favorable terms. Those who are not yet sure which bank is the right one should not be afraid to carry out a comparison on the Internet and pay attention not only to the possible loan amounts and terms, but also to the effective annual interest rate. The annual percentage rate in particular can be a decisive criterion when looking for a small loan with favorable conditions.
Requirements for lending
If you want to get a small loan with favorable conditions, you should have a good credit rating, a secure income and an impeccable credit bureau information. In addition, the income should be so high that it stands in a reasonable relation to the loan amount taken up. A small loan is always mentioned when the loan amount is between 500 and 5000 USD. The amount of the monthly repayment rate depends on the length of the term and the effective annual interest rate, which can be both credit-dependent and credit-independent.
Credit-dependent and credit-independent loans
Credit-dependent loans offer particularly favorable conditions for anyone who can demonstrate good, very good or excellent creditworthiness. If this is not the case, a credit-independent loan would be the better choice. Here the interest rate is the same for all bank customers, provided they are creditworthy at all.
Application, approval and paymento
A small loan with favorable conditions can be applied for either on the Internet or in a bank branch. If the lender is a purely internet bank that does not have a nationwide branch network, the latter option is not available. However, such a bank would have the great advantage that the interest conditions and the conditions for lending are usually particularly favorable. If the loan application has been received by the bank, it will be checked immediately. This includes not only obtaining credit bureau information, but also a thorough examination of all collateral that is relevant for lending.
If the credit bureau information is in order, the bank can provisionally approve the loan application and will provide the customer with a detailed message as to which documents it needs for a final assessment of the creditworthiness. As a rule, this will be the current proof of wages or salaries as well as the current employment contract. If the applicant is already a pensioner, proof of pension would be required.
If the bank concludes that it can approve the loan application, it will transfer the small loan to the customer’s checking account with favorable terms within a few days. A cash payment would only be conceivable in the very rarest of cases. The start of the repayment, the length of the term and the amount of the monthly installments are agreed individually.