Payday loans are regarded as the most common type of small loans that borrowers usually wish to access. This type involves borrowing a certain amount of money for up to one month. The setup requires you, the borrower, to pay the loaned amount plus the interest all at once. The payment is mainly collected on your next payday. 

With such an arrangement, make a realistic assessment of your financial capability first. You must borrow only the amount that you can afford to pay. 

Line of credit is also known as revolving credit. In this type of loan, when your application gets approved, you are offered a credit that can be used up to a particular limit. The said limit is also regarded as the maximum loanable amount. You pay the loaned amount plus the interest when the money is no longer needed.

A line of credit loan works like using a credit card. You can borrow any amount within the credit limit, and the money can be borrowed again as long as the loaned amount is paid back, together with interest. The difference between using a credit card and a line of credit loan is that the former requires no payment of interest for the amount borrowed as long as this is paid in full every month.

A small personal loan involves getting a loan with a longer loan term. Typically, the loan term ranges within 3-24 months. As a result, you, as a borrower, get more time to pay the loaned amount back plus the interest.

Small personal loans are offered with interests that are lower than what payday loans have. However, the former's longer loan term usually makes the cost of borrowing higher compared to when getting payday loans. But compared to a payday loan, a small personal loan has lower monthly repayments. Thus, having missed payments and incurring additional charges is unlikely among small person loan holders.

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Small loan applicants should always consider the borrowing fees when getting loans. Lenders usually charge an origination fee when you take out a loan. The fee is either a percentage of the loaned amount or a fixed amount, and it is usually taken from the loan amount. 

Many lenders are not willing to provide a loan as small as what the loan applicants need. That's why most of the time, borrowers end up borrowing more than what they need. Although most borrowers can repay the overborrowed amount, they end up paying more for the unnecessary origination fee. To avoid overborrowing, you should always the loan limit before getting a certain loan offer.

The loan repayment term is an essential aspect that must not be overlooked. Borrowers are strongly advised to take out loans with shorter loan terms when they can afford them. Although these loans come with higher monthly payments, you could pay them off faster. The overall cost of paying the loan then becomes lower because lenders usually place lower interest rates on short-term loans.

Loans with longer repayment terms, on the other hand, involves lower monthly payments. The monthly premiums are lower because the term allows the borrower to pay for a more extended period. However, most loans with longer repayment terms cause the borrowers to spend more to cover the higher interest rate.

Small loans are commonly offered as either secured or unsecured. Getting a secured small loan means faster approval and a lower interest rate, but you must provide collateral that the lender would take if the loan would not be paid. The unsecured ones require no collaterals and are offered with higher interest rates. Lenders place higher interest rates for this type of loan to cover the risk involved if you delay or refuse to provide payments.