Business Money

The Power of Credit: 4 Common Types of Loans for All Credit Categories

Loans

We all come into situations where we don’t have enough cash to buy what we need or to cover emergency situations. Some items are just too expensive, such as houses and cars, or injuries and illnesses may cause you to be temporarily out of work while you have a stack of doctors’ bills on your desk. In addition, automobiles and household appliances or fixtures may break down at any time and require costly repairs, and your only option may be to borrow money.

Several types of loans are available to people in all credit categories. Some loans require excellent credit, and some require putting up valuable items as collateral. However, other types of loans, such as online payday loans, can be obtained by anyone with a regular job and a checking account regardless of past credit history.

 

Personal Loan

1. Personal Loans

Personal loans are available from most banks and credit unions, and they can be used for virtually any type of purchase. Some people use personal loans to buy merchandise, such as stereo equipment or jewelry, and others use personal loans to pay bills or take vacations. While these loans seem to be extremely favorable, they do have a couple of drawbacks. The first disadvantage is that you must have very good credit and a verifiable source of steady income in order to receive approval. The other drawback is that interest rates can be much higher than they are for other types of loans.

 

Home Equity

2. Home-Equity Loans

Home-equity loans can get you a large amount of cash very quickly that can be used for just about anything you desire. Many people apply for these loans to pay off credit card debt, pay for their children’s education or to finance investments. Most banks, credit unions and mortgage companies will originate this type of loan, but you must own your home and have equity built in your current mortgage. One of the best parts of home-equity loans is that they can potentially provide you with tens of thousands of dollars, and you may be able to get 10 to 20 years to pay back the money. However, if you miss payments and default on the loan, the lender will assume ownership of your home to cover the remainder of your debt.

 

Auto Loan

3. Auto Loans

Auto loans are specialty loans that can only be used to buy personal vehicles, such as cars, minivans and pickup trucks. Many types of auto loans are available, but the interest rates, terms and amounts of the loans largely depend upon your income and your credit rating. People with excellent credit may be able to receive auto loans for expensive, new vehicles with no down payment and no interest for several years. Individuals with poor credit may qualify for an in-house auto loan from a dealer, but the funds provided will be limited and subject to high interest rates.

Cash Loan

4. Quick Cash Loans

Quick cash loans are a very versatile type of loan that can be received by nearly anyone with a job and a checking account. These loans may often be obtained within 20 minutes of walking into a office or website like Northcash, and usually are approved on the same day you apply. These type of loans are usually provided for $1,000 or less with no hassle, and they are required to be paid back within short time. They are perfect for unexpected emergencies that cannot wait until your next pay cheque. To obtain the loan, all you must do is provide proof of income and your checking account information, and with online cash loans, this information may be able to be verified electronically without having to submit paper documentation.

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