What Type Of Loan Should You Get

October 31, 2018
Everybody needs to borrow money sometime in their life. There are so many options out there that it can get quite confusing. How can you choose the right loan for you? Let’s take a look at the different types of loans and when they can help you out.
What Type Of Loan Should You Get

Personal Loan

With a personal loan, you borrow a certain amount of money from your bank or credit union and pay it back over an agreed period. Interest is added to the amount you borrow. You make regular payments for a period ranging from 1 to 5 years. The minimum amount to borrow starts at a few thousand dollars. The amount can vary from one bank to the other. Some are $3000; others go up to $5000. The bank also runs a credit check.

Personal loans are a good option when you want to buy furniture, consolidate other debts or go on a vacation.

Car Loan

If you want to buy a car, you can get a loan through your dealer. It is very convenient, but can also add much pressure.

Another option is to go directly to your financial institution to get a loan for your car. If you have a good relationship with them, you might be able to negotiate lower interest rates. There is a minimum amount that you can borrow, usually $5000. Some banks will give you up to 8 years to pay off your car loan, during which you make regular monthly payments.

Whether you go through your dealer or your financial institution, a credit check is made to see your credit history.

Online Cash Loan

An online cash loan lets you borrow smaller amounts of money that you repay within three months. The interest rate is usually higher. They do not check your credit report, which means it does not matter if you have bad credit. They will merely verify your bank statement from the last ninety days to make sure you can afford to make the payments. You can apply for them online and get your approval within one hour. When approved, the money is deposited directly in your account within 24 hours. Throughout the whole process, you don’t even have to leave the comfort of your home.

Online cash loans are a good option when you need to borrow only a small amount of money.

Line Of Credit

A line of credit is a loan that lets you borrow up to a certain predetermined amount. You do not have to use the whole amount, and you pay interest only on what you do use. Usually, the interest rate will be lower if you have a good credit score. You make a minimum monthly payment and can pay what you owe in full at any time. There might be some fees attached to a credit line, so check with your financial institution.

The loan for you should be the loan that meets your needs and is easy for you to fit in your budget.