Personal Loans Various Options
Whenever you are in need of financial assistance, there are several types of loans that one could opt for. It is always good to know about what options are available for you.
Broadly the loans can be divided into many categories:
- Close ended
- Secured
- Unsecured
- Conventional
- Payday
- Advance fee
- Open ended loans
Open ended lends are the ones that you can avail as frequently as you require. Credit cards are one example for this category of loan. Such credit allows you to purchase any thing that you like to have, and pay the minimum or the wholesome on the due date. As you continue to make minimum payments towards the outstanding balance on your card, the available funds keep increasing.
Close ended loans are those where you cannot borrow more until the payment is made in full for the existing credit. As you pay your monthly payments dues, the loan amount decreases, but new funds will not be made available to you. This means that if you need more finances, then you will have to take up another loan. Some of the close ended lends are auto loans, student loans and mortgage loans.
For Secured loans, some form of guarantee needs to be given by the borrower to the loaner. This guarantee can be anything, which holds value in terms of money. It can be a home or any asset like jewelry. Even if you have a bad credit history, this facility can be availed.
Unsecured loan facility is basically meant for those, who have a very poor rating and have nothing to give as security or collateral. In both the loans, proper care should be taken by the borrower as far as regular repayments are concerned.
On the other hand, conventional loans the ones that are not issued by the federal government. Payday and advance fee loans are examples for short term lending. You will have to repay them when you get your next paycheck. Usually the interest rates are quite high for these types of loans, but they can be availed rather quickly. There are some lenders who approve it within an hour. These loans can be availed by people who are employed.
Some of the Key points worth considering:
Planning should be done before you take any sort of loans. If you are not sure or if you are not able to decide about which loan is best for you, then it is better to take some assistance. You could approach a person or a friend, who has knowledge about these things. Alternatively, you might also want to consider taking help from a financial advisor.
The main thing is that you should first calculate your financial needs. Do not simply take a loan just because you are falling short of some cash. Access your needs, and then plan the loan amount.
It is also important to evaluate if you are qualified for the loan. Sometimes, the lenders are not keen on approving the loan if you are not employed. It is always easier to raise funds if you are in a job. You need to have an occupation, which is secured and you should be drawing a fixed monthly salary.
Carefully examine the interest rates offered by lending firms. Choose the lender whose interest rate suits you. For doing all this properly, sufficient research must be done. You could shortlist a few lenders and then make your decisions accordingly. It is also advisable to make comparisons. This will help you to save good amount of money. Always provide correct information when filling the loan form.
Author’s Bio:
Anita Brookner is a professional financial advisor, and she has been efficiently helping her clients make the right investment decisions and reap benefits. She also writes on financial topics like private equity firms Los Angeles.
