Regular repayment on a small loan may reflect an established credit history and you as a reliable borrower when compared to one who has limited or no credit history.
It also helps to build relationships with lenders. During Covid 19, many banks prioritised their existing clients first due to the large amount of enquiries received. However, be careful not to take on an early loan you cannot afford. One late payment on your smaller loan could make your chances of qualifying for future funding even worse than if you had never applied for it at all.
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