Which 5 Distinct Loan Types you Should Consider
Statistics show that Americans have over trillion in debt. Mortgages account for the most significant part of this figure. It makes more sense for you to aim at first growing your financially independence. Such would also be the right time for you to consider opting for marginable securities too. Undoubtedly, you will be sure of various types of loans at your disposal.
Understanding the different types of loans available will help in critical decision-making. Irrespective of whether you are seeking to lower interest rates or even consolidate your loans, you will hardly miss out the right type. Some of the best types of loans to consider will always include the following.
Feel free to go for unsecured personal loans. This loan would be ideal if you want to make a huge purchase or consolidate your credit. With this loan, you will be sure of clearing it much sooner. More than often, you will not need to worry about security. For as long as you pride yourself on a better credit score, you will be confident of getting much better interest rates in the long run.
You will also find that there are secured personal loans. It is the best way for you to access credit without necessarily paying fees. Nevertheless, it will be upon you to give out an asset as collateral. Undoubtedly, these secured personal loans tend to attract some of the best interest rates in the market. This is due to the fact that the risk will be on your shoulder. If you fail to repay the loan, the lender will legally seize your asset.
The popularity of fixed rate loans has also grown so much. With this loan, you will often pay equal amounts of installments all through the loan period. The fixed nature of these loans will help in ensuring that you plan your budget better. However, it would be better if you chose the variable rate option if you do not have too tight a budget.
Besides, going for variable rate loans will not be a poor decision. In most cases, the performance of the banks will be central to the rate you get charged. You will be confident of getting a much lower APR compared to those of the fixed rate loans. Additionally, there will be a ceiling on how much the rate can change within a predefined period. This option would be suitable for short term loans.
We cannot underestimate the convenience of payday loans. Besides being unsecured, you will need to pay them when you receive your next salary. These amounts are usually less significant. Besides, these loans attract huge interest rates. Aim at keeping away from them.