Also I have a 8 gallon tank... It's currently quite hard for me to purchase a bigger one.. Is it going to affect the hermit hugely??

It should work for now. The HCA recommends a medium sized hermit crab have a minimum of a 10 gallon tank and 6.5 inches of substrate. So I would get a larger tank as soon as possible. And when you get a larger tank you could also get him a buddy because hermit crabs, despite their name, enjoy to have company.