Ben Todd | Jun 3, 2017 | 2
Types of Loans
There are many types of loans out there to choose from. Here is a list and description of your different kinds of loan options.
Loans for Emergency Situations
When facing circumstances that don’t allow us to meet our financial obligations, and we require an infusion of cash to remedy the situation, we must borrow money. Getting an emergency loan can bail us out of a bad situation, and once things return to normal, repayment of the loan does not seem burdensome. Various emergencies can occur, such as unexpected travel to important or tragic events like weddings or funerals for family members or close friends, or you may need a fast cash infusion should an illness occur, and medical expenses soar.
Situations can arise that we have no control over, and if your income is insufficient and you have little saved, an emergency loan can be a source of great relief. Short term loans are usually preferred in these situations, because the intent is to repay the loan as soon as the next paycheck comes along or within a month or two. Financial institutions are the top choices for loans, but you have the option of a payday advance loan, which you can apply for online. Research the key words and see the variety of online loans that are available.
You probably already know that banks can loan you money. Large loans, such as mortgage loans, are usually applied for in banking institutions. People buying homes for the first time usually count on spending one-fifty ($150,000 USD) to three-hundred thousand ($300,000) dollars. It is very important that first-time buyers locate an institution that offers low interest rate mortgage loans with a term of twenty-five to thirty years for repayment.
Currently, automobile loans are among those that are the most important and commonly applied for by the ordinary man. Loans that are intended for those who are in the market to buy an automobile are usually called auto loans or car loans. It doesn’t matter what type of car you are considering when applying for an auto loan. Whether you want an SUV or an economical compact, you can apply for an auto loan. The loan amount you will be able to qualify for and the associated interest rates are heavily dependent on your age, income, and credit history. If your employment history is poor, it will negatively affect the interest rate of the loan and the amount of money you will be able to borrow.
If you are attending a trade school or college, there are student loans available for that purpose. If you are planning to obtain a diploma in a specific field, a student loan can be applied for. Government agencies or private lenders can be contacted to obtain student loan applications. Be sure to look for a student loan that doesn’t require you to pay interest rates that are too high. If your are planning to attend a trade school, the amount of money you will need to borrow will likely be less than if you were planning to attend a university and earn a bachelor’s degree in four years. Payments on loans for trade schools will not commence until your training has been completed and you graduate.
Loans for Personal Use
Personal loans that people need are not for things considered to be “basic necessities”, such as mortgage loans for homes, auto loans, or general medical expenses.
Extravagant weddings, honeymoons, cosmetic surgeries, or traveling to visit relatives or exotic locations during the holidays are all personal needs that may prompt you to take out this kind of loan. This kind of loan is called a Personal loan. These kind of loans usually have higher interest rates, because they are tailored to the needs of the person taking out the loan and differ in each case. Research your all of your loan options on the internet before applying to a financial institution for a personal loan. You have a better than average chance of finding a lender who offers more favorable interest rates on personal loans.
Although many people are unaware of this fact, using a credit card means you are taking out a loan. Actually, many people living in the United States think that they must have a credit card along with everyone else, and the credit card companies want you to think that they have lowest interest rates available and that having credit cards can make your life a whole lot easier. The truth of the matter is that credit cards comprise the largest loan industry existing in the U.S. or the world. Having credit cards does simplify your life when you don’t have to pay in cash or when purchasing something that costs more than you can cover in a lump sum, but in comparison to other loans, credit cards carry relatively high rates of interest. There is a good possibility that you will fail to meet your monthly obligation, because in all honesty, at times, occupational or domestic issues can increase your chances of failing to make monthly payment by the due date specified on your bill, which will leave a nasty blemish on your credit history.