Though it would be nice to have an abundance of money tucked away that you can use to make purchases whenever you’d like, it’s just not a reality for most people. Instead, when they want to buy something they turn to loans as a solution. Loans can be convenient when properly used to obtain things that would ultimately take you years to save for. Below, is a look at some of these loans and when you might need to apply.
- Personal Loan
When consumers are interested in buying things that they don’t have enough money for, a personal loan is usually the first option. The funds, if approved, can be used to purchase anything from a big screen television to paying off debt and going on vacation. Personal loans can be several hundred dollars or several thousand and typically require some form of collateral, a good credit history, and stable income to get approved.
- Installment Loans
For those who have financial emergencies and poor credit, obtaining a personal loan is not an option. Fortunately, there are short-term lenders that are willing to deposit a small lump sum of cash into their account. Easy installment loans can be applied for online and take minutes to provide a result. Eligibility requirements are minimal. Applicants must be 18 years old, have a job, and provide details to their checking or savings account. The funds are deposited within 24 hours which is also why these loans tend to be used for emergencies.
- Mortgage
Becoming a homeowner is a dream for many Americans, but it wouldn’t be true for most if it weren’t for mortgages. Mortgages are loans provided to home buyers to purchase a property. There are generally strict guidelines to qualifying including the need for decent credit, a down payment ranging from 3% – 20% of the property, and a 3 to 5-years account of reliable income. If approved, mortgages are paid back over a period of 15-50 years with interest included.
- Car Loans
Cars are still the preferred choice of transportation for many. Be that as it may, cars, even those that are used, can cost several thousand dollars. Most people interested in purchasing a car will apply for a loan to cover the costs for them. Auto loans typically require you to have a good credit score and reliable income. You may also be required to submit a down payment.
- Student Loans
Higher education is a common goal for most high schoolers, however, the cost of college per year can be more than $20,000. When students and their parents don’t have the means to pay for schooling on their own, they look to government and private lenders to get the funds. Student loans often cover the cost of tuition and in some cases, may even cover the cost of other school-related expenses like books, supplies, and transportation. Students are generally provided with a grace period after graduation before repayment must begin.
- Business Loans
Starting a business has become easier than ever. All you need is a working computer or laptop, a strong internet connection, and an idea. Of course, there’s also other associated costs to starting a business. For things like inventory, licensing and insurance, and overhead costs, hopeful entrepreneurs look to lenders to get a loan for their business. Though it does require you to have a decent credit background and collateral, it can be the fastest way to secure funds to launch your idea.
Not everything you want in life is going to be easily affordable. That’s why lenders are there to provide a helping hand. No matter which type of loan you’re in need of, it is imperative that you borrow responsibly. By only applying for what you can afford to repay and paying it back on time, you help to improve your credit and build relationships that you may need to rely on in the future.