The 4 Most Unanswered Questions about Loans

The Types of Loan You Can Get for Your Personal Needs Whether it is funding a new startup or purchasing an engagement ring, people take out loans for whatever purpose. Because there are many types of loans out there, it can be confusing deciding on what loan to get. This article will serve as a guide in taking you through the more popular types of loans, their characteristics, and their suitability in meeting your financial need. The first type of loan is called a personal loan which is extended by a lot of banks and can cover almost any expense such as buying a new entertainment system or settling a common bill. Personal loans can amount from a few hundred to a few thousand and are customarily unsecured. The general requirements for these kind of loan is proof of income by the lender and/or proof of assets that are worth at least as much as the amount being borrowed. The loan application form is typically one to two pages in length, and the result can be known within a few days. The problem with personal loans is that the interest rates can be quite high ranging from about ten percent to twelve percent. Also a disadvantage is that it must be paid in full typically within two years which is impractical for borrowers with long term projects.
Case Study: My Experience With Loans
In summary, personal loans are for individuals who only want to borrow a relatively small amount of money and who has the capability to repay it in a short amount of time.
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The second type of loan is credit cards with the principle that the loan taken out will be repaid at some later date. What makes credit cards so enticing as a source of funds for individuals and companies is that they are accepted by a lot of merchants as form of payment. One only has to fill out a one-page form when applying for a credit card. The credit review process is expeditious and applicants will know if they are approved or not within a week or two after passing their applications. Even faster are online or telephone applications which can be reviewed within minutes. In terms of use, credit cards are very flexible. Almost anything these days can be paid for by a credit card from college tuition fees to the tall latte macchiato of the corner cafe. However, credit cards also have a number of drawbacks. Most credit card companies’ interest rates can reach as high as twenty percent per year. Additionally, credit card users are more likely to accumulate debts using a credit card because it is as good as cash. Psychologically, it is easier to pay something with credit card than with the same amount of cash.

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