Some Loans That Might Help You Get Through Hard Times
Whether you are going on a dream vacation, going to college, getting married, buying a house, or have an unexpected financial emergency like medical bills, different types of loans suit different borrowers. You will need to understand what type of loan to shop for because there are specific loans for certain purchases. It is also best to familiarize yourself with their finer details, including repayment terms, APRs or Annual Percentage Rates, and credit requirements. APR refers to the yearly interest generated by a sum that is charged to borrowers or paid to investors.
You can get just about any loans online. Some online loans can be approved in less time than it takes to go to a bank branch. You can even get a loan without faxing. As with any other financial product, you will want to work with a trusted company and make sure your loan is a correct fit for you.
So, in order to be ready to borrow the right type of loan when the time comes, here are some loans that can help you make needed purchases:
Mortgage Loans
A mortgage or home loan allows you to finance the purchase of a home. There are different types of mortgages for various borrowers, including first-time home buyers. Failing to repay your mortgage could result in a foreclosure and eviction.
Personal Loans
Personal loans are the broadest type of loan category and typically have repayment terms between 24 and 84 months. They can be used for a variety of expenses and go by various names. Though many of them work the same, lenders may give them specific, purpose-driven titles and offer different terms depending on each purpose. People commonly use personal loans for weddings, vacations, home renovations, medical treatments, purchase of expensive gadgets, and debt consolidation.
Some of the largest online loan companies for personal loans include SoFi, LightStream, Prosper and Upstart.
Student Loans
These are payment for tuition, living expenses, and other fees needed to be paid at accredited schools. Most new and outstanding student loans in the U.S. are federal loans, meaning they are held and managed by the Department of Education. Student loan repayment has many risks, that is why it is important for borrowers to know their options.
Auto Loans
Auto Loans are a type of secured loan that you can use to buy a vehicle with repayment terms between three to seven years. You could shop around with financial institutions like banks, online lenders, as well as car companies and dealerships. Some car dealerships have a financing department where they help you find the best loan from partner lenders, while others operate as buy-here-pay-here lenders, where the dealership itself gives you the loan. Always remember though that your car could be seized if you fail to repay your loan.
Credit Builder Loans
Credit builder loans are small, short-term loans that are taken out to help you build credit. Whether you are trying to establish a credit history or repair one that has been less-than-outstanding, a credit builder loan gives you the chance to show lenders that you are a responsible borrower by making timely payments. They are meant for people with zero or limited credit, and you do not need good credit to qualify. You can typically find credit-builder loans at community banks, credit unions, Community Development Financial Institutions (CDFIs), lending circles, and online lenders.
Payday Loans
A payday loan is a type of short-term loan, usually lasting just until your next paycheck. It is designed to advance your wages. These loans are not credit-based, and so you do not need good credit to qualify. Payday loans are typically considered predatory debt because of the short repayment periods and often triple-digit APRs or Annual Percentage Rate.
