Advertisements for loans are everywhere. How do you determine which loan is right for you? Here are five different types of loans that will meet your financial needs depending on your situation.
1. Personal Loans
A personal loan is typically an unsecured loan that can be used to cover expenses or consolidate your current debts. Your bank, credit union or an online lender will be able to help you apply for and receive a personal loan. If you want a lower interest rate, a secured personal loan may be offered by certain lenders.
2. Payday Advance
A payday loan is an unsecured loan that requires no credit check prior to approval. If you are unemployed, you may be able to get a payday loan as well. However, you are generally required to be over 18, have a minimum amount of monthly income and agree to pay the loan back within 15-30 days. A payday advance, like payday advance San Antonio TX, is often used in a financial emergency when cash is needed immediately.
3. Home Equity Loans
If you have equity in your home, you may be able to access that equity through a home equity loan. This is a secured loan that requires a second lien be placed on your property. In other words, the lender could foreclose on your property if you don’t repay it, so use these with caution.
4. Credit Cards
A credit card is the simplest way that a lender will extend credit to a borrower. If you have good credit, you can get an unsecured line of credit for as much as $10,000. However, a typical credit card will have a balance of $1,000 to $2,000 on it. Borrowers who have poor credit may still be able to get a secured credit card.
5. Home Equity Line Of Credit
Like a credit card, a HELOC is a revolving credit account. This means that you can borrow money, pay off a portion of the loan and then use that money again in the future. It is similar to a home equity loan as it is typically secured with your home as collateral.
Anyone looking to borrow money should look to these types of loans. Whenever you take out a loan, make sure that you are aware of the interest rate, whether or not collateral is needed, and what could happen to you if you fail to repay the loan.
About the Author:
This article was written by Dixie Somers on behalf of Power Finance.