During the course of one’s life, many situations will arise where a loan will be necessary. In every instance, there is a loan that meets that need. Let’s take a look at two situations that might require one and the different kinds of loans that could be helpful in each case.
Buying A Car
Buying a car is always exciting. Depending on the amount you will pay for your car, different types of loans could help out.
When buying a brand new or relatively recent car, a car loan will be the option of choice. You can either go through your car dealer or your bank. When dealing with your bank, you can usually put the loan over an eight-year period which makes for smaller monthly payments. You can also pay part or the totality of your loan whenever you want with no penalty. The minimum amount to borrow is usually $5000.
If the car you are buying is older, more than seven years old, a personal loan could be a good option. The minimum amount is about $3000, and you repay the loan over a five-year period. You may make more frequent payments if you desire and pay off the loan whenever you want with no penalty.
If you are looking to purchase a car for under $1000, a no credit check loan could be the solution, especially if you have bad credit. Unlike bank and dealer loans, they do not check your credit score. You only need a steady job and the income necessary to repay the loan. These loans start at $300 and rarely go over $1000. There is a broker fee to pay, and the interest rate is high, but if you have bad credit, it might be the only solution. The loan is payable in three to four months, depending on the amount borrowed. You know if your loan is approved within the hour, and the money is deposited in your account within a day.
Debt consolidation comes down to putting all of your debts into one single loan with lower interest. Having only one payment going through each month, it makes it easier to manage.
A personal loan is the option people most often use to consolidate their debts. Payable on a period of one to five years, it is easy to fit your monthly payment into your budget. The loan can be secured, which means you put your house or other assets as a guarantee, in which case you can get an even lower interest rate. If you choose to go with an unsecured loan, the approval process is faster, but the interest rate will be higher. The payments can be on a weekly, biweekly or monthly basis, whichever suits your situation better. You can also decide on a fixed or variable interest rate.
A personal line of credit gives you access to funds on an ongoing basis. It is more flexible than a personal loan. You use what you need, and you pay interest on what you use only.
These are only two examples, but many other occasions will arise that need a loan. Stay informed and study your options. The perfect loan for your situation is out there.