When people are asked if they need a loan, more often than not the answer is yes. Financial emergencies and the need for investment are the main causatives and drivers with regards to loan demand. Regardless of the reason as to why someone wants a loan, there are various loan types offered by mainstream banks and other financial institutions to choose from.
The provision of loans is usually dependent on the needs. There are different types of loans that are designed and crafted by financial institutions for entirely different customer groups. The diversity of loan products helps to accommodate as many people as possible among those seeking out a loan.
Business Loans And Personal Loans
The major categorization of loans are business loans and personal loans. As one can infer from their naming, business loans are loans extended to individual or companies that have to have a loan for various strategic reasons.
On the other hand, personal loans are the type of loans that are extended to individuals for personal reasons. This category has many different types of loans from which prospective borrowers can choose from. However, the structure of individual loans restricts some of the loans to certain purposes only.
Types Of Personal Loans
In this category, various needs are catered for by the various types of loans as provided by financial institutions. Some of the loans include mortgage loans, car loans, payday loans, installment loans, and student loans.
These are loans advanced to college students who need financial help to cover the cost of attending college. Student loans are usually offered by the government, but some private institutions also offer such kind of loans.
These particular loans are advanced by private banks that provide the money that an individual needs to cover the cost of purchasing a house in which they would otherwise be unable to buy upfront. These loans usually attract the least amount of interest rate and the payment is usually paid back over a longer period.
Auto Or Car Loans
Car loans are more or less similar to mortgage loans except, of cause, they are meant to assist individuals to purchase a car. They are usually tied to your property, however, it is possible that you can lose your property if fail to pay this loan back.
Payday loans are usually designed for emergency purposes and are, therefore, advanced for a short period of time. Many of them are usually unsecured therefore making them attract some of the highest interest rates.
How To Get A Loan With Bad Credit
Having a bad credit rating is usually a stumbling block when you are trying to find a lender. Many financial institutions, especially banks, shy away from advancing loans to individuals with such credit rating. This, however, does not mean that you do not have access to credit entirely. In such circumstances, you can turn to loans from credit unions, use a home equity line of credit, turn to peer-to-peer loans or you can seek loans from family and friends. If this does not work out and you still need a loan, you can look for a cosigner to help you out in getting a loan.