Getting a small loan between $2,000 and $10,000

By: Matthew G Young

If you need a small loan between $2,000 and $10,000, your options become a bit more limited than they would be with a smaller loan as fewer lenders are willing to put this much money at risk. Individuals with poor credit ratings, more often than not, will not be eligible for loans of this amount as there is a much higher risk of default when dealing with this much money. For those that do qualify however, there are still several options.

Banks

An unsecured personal loan through a bank or credit union will oftentimes give you the best rate available. The rates will vary depending on the amount borrowed, the term of the loan, where you live, and your credit rating. For example, a loan taken out in Alaska will generally have a lower interest rate than the same exact loan taken out in California. This discrepancy occurs because of per capita wealth; the average Alaskan makes less money than the average California resident.

Banks of all sizes should be considered. Large, nationwide banks may be in a position to offer lower rates, but this is certainly not always the case. Banks like HSBC, Wells Fargo, and KeyBank should be looked at, but smaller, local banks and credit unions may also have good deals. Consider as many options as possible prior to finalizing any loan.

Online Lenders

Online lenders have gained much popularity over recent years. Sites such as www.eloan.com offer competitive rates to qualified applicants. You can even check rates with most major banks online, supplying you with an even larger amount of sites to look at. These sites are so popular because of their ease of use. In most cases, it is possible to apply for these loans online. Sometimes, a decision of approval can be obtained in only a few minutes. If you desire, you do not even need to speak with an actual person. This is not recommended though, due to the fact that there are a few untrustworthy sites and scams out there that have made it difficult for the legitimate sites to gain trust. It is highly suggested that you only give your financial information to a site that you do trust.

Peer-to-Peer Lending

A peer-to-peer lending platform can be used for small loans of a few hundred dollars all the way up to larger loans of $25,000 or $30,000. Investors will “bid” on your loan, offering you an interest rate that is competitive with most major banks. Competition for your business on the peer-to-peer site also helps to keep rates low and terms generous. Sometimes, peer-to-peer lenders might even have rates lower than traditional banks. A couple of the more popular peer-to-peer lending sites include www.prosper.com and www.lendingclub.com.

Conclusion

Unfortunately, some of the methods used to secure smaller loans do not work as well with loans of a larger size between $2,000 and $10,000. Credit card cash advances, payday loans, and bank overdrafts are not practical when you need between $2,000 and $10,000. This is to your benefit, though. The interest rate that you would have to pay on such a large loan through these means would be extremely high. It is better then, that borrowers are forced to stick to more conventional loan methods when dealing with larger amounts.

One final thing to be aware of is that the shorter the term you borrow money for, the higher the interest rate usually is. Lenders want to ensure that they make money, and this ensures that they will. Both sides of this coin have advantages and disadvantages. A short-term loan might have a higher interest rate, but theoretically, because it is short term, it will be paid off more quickly. A long-term loan will have a lower interest rate, but you will be paying the interest off for longer. The correct one for you can only be determined based on your financial situation.