If you need to cover your educational expenses, get a mortgage, purchase a car, or quickly borrow money to buy essentials, there are multiple loans that will suit your needs. Let’s take a closer look at the most common types of loans available today.
1. Personal Loans
Whether you need to cover your wedding expenses, renovate your house, or pay medical bills, personal loans are the broadest loan category on this list. Depending on the lender, the loan range will typically vary from $1,000 to $50,000 with an annual percentage rate (APR) of 6% up to 35%.
Although the application process is pretty straightforward, keep in mind that interest rates and repayment options will vary as they depend on your personal credit history.
2. Payday Loans
As a short-term solution to your monetary problems, payday loans are usually used to cover immediate expenses, like paying for food or utilities. Prior to taking one, pay attention to the terms and conditions, as payday loans have one of the highest ARPs, ranging between 300 and 500%. They are also quite easy to access as they have fewer requirements than other loans and aren’t credit-based, so you will get one even with a bad credit history.
With so many scams on the market, be careful when choosing a lender. For instance, Payday Depot offers a range of different loaning options, so be sure to check them out.
3. Student Loans
If you need to cover your education expenses, you can take out a student loan that allows students and their families to pay tuition fees and their respective living costs. There are two options available: you can either choose a federal loan or get a private one. Keep in mind that federal loans are generally better as they have a 3-6% APR range, while private loans’ percentage rate varies between 3 and 12%.
4. Mortgage Loans
A mortgage is a loan that allows you to purchase or maintain a home or any other property. With one of the lowest interest rates that range between 5 and 6%, mortgage loans also allow you to remain the legal owner of the property. There are also special government-backed loan programs that apply to certain groups, like veterans, servicemen, or low-income borrowers from rural areas.
5. Auto Loans
If you want to purchase a vehicle, an auto loan is a great option, with APR interest ranging between 1 and 14%. These loans are great if you are in urgent need of a car, but remember to always pay on time. If you miss the payments, you will lose your vehicle altogether.
6. Home Equity Loans
Simply put, home equity is the portion of the home you own. This portion also allows you to take a home equity loan that can be taken for a multitude of reasons, including fixing your house, paying for college, or paying for other necessary expenses.
If you’re reading this, then you’re probably considering taking a loan. Before taking one, always ensure you understand all the terms and conditions. Choose the type of loan that suits your needs, check its APRs and repayment time, and make sure that borrowing money won’t worsen your financial situation.
