Most people rely on credit cards to pay for unexpected expenses. With credit cards, though, there are many uncertainties: variable interest rates, cash advance fees, and the inability to determine exactly when the money borrowed will be paid in full. With small personal loans, all of this uncertainty is swept aside.

Personal loans usually come with a fixed rate and a fixed monthly payment. With the ever changing interest rates on credit cards, it’s difficult to determine just how long it would take to pay off the balance that’s been borrowed. With small personal loans, the rate is fixed, the monthly payment is always the same, and the date the loan will be paid in full is given.

Another advantage of taking out a small personal loan rather than using a credit card is the interest rate. Under normal circumstances, the interest rate on a personal loan is lower than that of a credit card, especially if it’s cash that’s needed. Credit card companies generally charge a higher interest rate for cash transactions and sometimes even a fee. Consumers can often obtain lower rates by getting loans from their own bank. Rates can be usually lowered further when the payment is automatically deducted from an account.

Low interest rate personal loans normally do not incur prepayment penalties, thus can be paid off early given the financial situation of the borrower. This is a great benefit that can save a lot of interest.