Most people at some point in their lives need to invest in new furniture, a car or home improvements. Or they get an unwanted surprise, like a vet or car bill! Or they need money to buy a home or business. The list is endless. Choosing the right way to pay for your purchase is important and there is a lot to choose from! It may take you a couple of years to save or you have to borrow a considerable amount that can take decades to pay off. Be diligent, take your time, shop around, seek advice and you will get the deal that best suits you. If you’re having trouble comparing prices, try a business like Rates4U.ca to find the best rate possible.
What type of loan do you need? Here are some of the main ones.
Table of Contents
Unsecured Loans
Unsecured loans or personal loans are the most common type of loan. Interest rates will vary according to your credit score. Loan amounts are typically between $3,000 and $25,000. Repayment terms vary from one year to five years.
Secured Loans
Secured loans are secured on a property or other large assets. The lender charges less interest because they can seize your asset if you fail to make the repayments.
Debt consolidation loans roll up smaller loans into one bigger loan, so you only have one single payment to make each month. Typical loans range from$500 to $25,000. Having one repayment might make it easier for you to budget.
Mortgages are used to buy properties or land. The money is typically borrowed from a bank or similar lending institution and then paid back over a long term, usually 20-25 years. Interest rates are low because the loan is secured on the property, so if the borrower defaults, the bank can foreclose and recoup their investment. There are also some schemes developed by the government to assist first time home buyers. An example of this is a USDA loan which is backed by the United States Department of Agriculture and offered by lenders like Primary Residential Mortgage. This helps people with low income and low credit avail low-interest and zero down payment mortgages to pay for the new home.
Short-Term Loans
Sometimes called payday loans, short-term loans can help you out with a temporary cash-flow crisis, such as an unexpected bill two weeks before payday. Interest rates are usually quite high, but the good news is that short-term lenders don’t look at your credit history before making a decision.
Short-term loans such as this title loan Indianapolis are secured on the value of a car, so the more your car is worth, the more you can borrow. It’s a useful option for people with bad credit.
Where to Start?
This can be daunting, as there are so many companies offering very different deals. And it’s not just the high street now. There are many online companies that offer easy applications and a chat line to help you. Now, if y prefer to talk face to face and have help with forms, etc., then the high street might be your best option. If you feel confident in applying online and are familiar with the internet, then this could be the right way for you. Either way, you want the process to be easy and stress-free.
Whatever you decide,look closely at the fees, the repayment schedule, and whether you can afford to borrow the money.
