There will always be times in life when we need to spend a significant amount of money to make a necessary purchase, such as buying a car, acquiring materials for home remodelling, paying healthcare bills, and so on. Saving money for such occasions is not always a practical or doable approach. So, what can we do about it now? This is where loans can come in handy. Read below to learn the different loan types to help you find easy online loans!
1. Personal
A personal loan is the most extensive loan type. In most cases, a personal loan has repayment terms ranging between 24 months and 84 months. Nowadays, you can easily apply for a personal loan online via a bank, a credit union, or an online lender.
You can use the personal loan mainly for purchasing computers, electronic gadgets, and other similar items with a high price tag. This type of loan is also ideal for funding weddings, house renovations, city relocations, holiday trips, and medical emergencies.
An unsecured personal loan is also known as a “signature loan”, it is primarily because your signature alone backs it. If you opt for this type of loan, go for the unsecured personal loan because it does not require any collateral.
2. Student
The student loan type is specifically for paying tuition, living expenses, and other related fees (except for informal classes) at accredited institutions.
A private student loan, in particular, works best for most pupils due to its accessibility and possible qualification for better rates.
3. Family
A family loan is an informal type of loan that you can obtain from household members and friends. Perhaps the good thing about taking advantage of a family loan is that when a formal lender denies you a standard loan, you still have the option to turn to a family member.
If your family needs more assurance about how you will repay the money, you can even bring an agreement letter. There are resources online to help you draft and sign a family loan agreement, calculate interest payments, and prevent non-payment consequences.
4. Small Business
A small business loan usually helps startups fund their business operations, especially companies with less than 300 employees. This loan type is often split into three categories working capital, term, and equipment. Family-owned grocers or restaurants, landscapers, sole proprietors, and freelancers with regular day jobs are examples of startup types that could qualify for a small business loan.
5. Auto / Car
A car loan (commonly known as an auto loan) is a secured loan type that has repayment terms ranging between three (3) and seven (7) years. Getting the loan is as easy as contacting an online lender, a local bank, a credit union, or a car dealership.
Several car dealerships typically serve as “buy here, pay here” lending entities that offer you the loan directly. Meanwhile, other dealerships rely on their financing staff to assist you in searching for an auto loan from partner lending companies.
Loans help us make necessary purchases right when we need them, especially if an item or opportunity we need is within our immediate reach. So, take your time to pick the option that best suits your needs and don’t hesitate once you’ve found the right loan!