Searching online for a loan can be really stressing, there are many different types and it can often get confusing. Which one is the loan for me? Should I apply for an unsecured loan or for a secured loan? I am sure those are questions that have roamed your mind more than once. Do not feel alone, there are hundreds out there like you. With this easy guide to personal loans, you will find those questions addressed instantly.
When applying for this type of loan, you put a collateral against it, for example, a property, a car or any valuable asset. This guarantees the lender that the loan will be repaid. In case you fail to pay when the loan is due, the lender has a right to seize the collateral and take possession of it. Secured loans offer better loan conditions than unsecured loans as the lender runs fewer risks.
This type of loan carries no collaterals. It is very flexible and many non-homeowners or people who do not want to run the risk of using any assets as collaterals decide to apply for it. The downside is that as the lender does not have any guarantee that the loan will be repaid, the interest rates are usually higher and the loan terms are less favorable than in a secured loan.
Cash Advance Loans
You may want to apply for a loan like this in case of an emergency. PayDay loans are short-term loans which generally last two weeks and carry very high interest rates. Up to $1500 can be borrowed and approval is extremely fast, you will have the money wired to your bank account within hours of applying.
Business Loans and Business Lines Of Credit
As the name very well points out, these loans are specially tailored for businesses. They can be either secured or unsecured and normally provide large sums of money. Most often than not, this type of loan is for businesses which are already running, but venture capital for businesses which are just starting can also be obtained. A line of credit is a commercial loan which is more flexible as it lets you withdraw money, pay it back and then withdraw again.
Banks or financial institutions will lend the borrower money to acquire a property. There are two types of home loans, the fixed rate loan and the variable rate loan. In the first one, the loan is secured at a specific rate and will not vary throughout the life of the loan. In the second one, the loan varies according to the fluctuating economy and the total debt owed may raise. Fixed rate loans provide a more stable situation for the lender as he knows the monthly payments will not change.
Loans granted to students to assist them in paying their course of studies. These loans are offered both by private institutions and the government and they can be granted to parents or to the students themselves. Often if the loan is secured to the parents, the sums offered are higher.
Other Financial Products
There are many other types of loans in the market, we have just discussed the most common ones. You will also find vehicle loans, military loans, fresh start loans, and even Christmas loans. As you can see, there is a loan out there which will cover all of your financial needs.