There are some things in life that you want but couldn’t possibly afford outright like a house, car, or business. There are other things in life that you need, but due to a variety of factors, can’t afford to pay for upfront, like an emergency home or car repair. In any of these circumstances, there are loans at your disposal. Loans provide access to cash to afford those things you want and need.
In order to use loans to your benefit, you should first understand the types of loans available, avenues for applying, and more importantly, which loan is best for you. Below is a look at some basics to borrowing cash.
There are different types of loans you can apply for. Knowing what each loan’s purpose is can help you decide on which is best for your circumstances. Here are some of the most common types of loans and their uses:
- Mortgage – these loans are provided to borrowers looking to purchase real estate.
- Car loans – you’d apply for a car loan if you were on the market to purchase a new or used vehicle.
- Student loans – if higher education is in your future but you can’t afford tuition, a student loan can cover the costs.
- Personal loans – whether you have a financial emergency, want to go on vacation, or need some cash to dig out of debt personal loans, can be used for any purpose.
Places to Apply
Where can you go to apply for a loan? There are several options, but here are the most common.
- Bank or credit union – banks provide all of the above types of loans to eligible borrowers.
- Private lender – there are private lenders who offer loans. You’d need to do some research and apply in their office.
- Online – the most convenient method of applying for a loan would be online. You have sites like westernshamrock.com where you can apply for personal installment loans from anywhere 24/7.
Factors for Choosing
So, how can a borrower know which loan is the better choice for them? Here are a few factors to consider:
- Type – Not all lenders provide all types of loans, which is why determining the type you need can help narrow down your options.
- Lender – As with any business, not all lenders are the same. You should do some research on a service provider before deciding to take out a loan with them. You want a lender who has a positive reputation for offering affordable rates, flexible options, and courteous service to their customers.
- Interest Rates – The interest rate is the amount you’re expected to repay in addition to the loan. You want to pay back as little as possible so opt for a loan with low rates.
- Fees – Most lenders apply fees to their products and if you want to repay the least amount of money back, you need to choose a lender with the fewest fees. Find out how much late fees, extension fees, and other lender fees are that may be added to your loan.
- Eligibility Requirements – All lenders use your financial status and history to determine how much they’re willing to lend you. Some have stricter requirements like traditional bank loans which require collateral and good credit, while others such as online lenders only mandate that you have a valid source of income and a checking account.
- Repayment Options – Paying back a loan shouldn’t put you further into debt than you already are. Choose the loan that has the most flexible and affordable repayment options.
- Convenience/Speed – When you need cash fast you need the most convenient loan. This may mean skipping the long process of applying through a bank or credit union and instead applying online for immediate responses from online lenders.
Unless you happen to be a wealthy person, money doesn’t always come easy. Sometimes you need additional cash to fund your future like buying a house, a car, or going to school. Other times, you need extra money to handle an emergency or life event. In any case, there are loans out there available to you. You just have to know what your needs are and use the factors listed above to choose the loan that is best suited for you.