There are many types of loans available including, but not limited to, a mortgage, a car loan, a student loan, a short-term loan, a title loan, a personal loan and credit cards. Whether you are in the market for a new car or feel it’s the right time to buy a home, it’s important to familiarize yourself with what each loan is first before you decide which one is the best for you.
Fast Cash with Little or No Credit
If you find yourself in urgent need of funds quickly to cover an unexpected expense and your credit is not good, there are still options available for borrowing money. If you have a good relationship with a family member they are probably the best place to secure the funds. However, if your family doesn’t have the money to part with, alternatives to payday loans can offer a viable option. Unlike the payday loan, this type of short-term loan allows you to repay the debt over affordable predetermined monthly payments. Just make certain that you can afford the amount required before accepting the funds.
Many first-year college students find themselves in need of a student loan to cover the school, the books, their meals and housing expenses. Luckily, student loans are easier to receive than you might imagine. You must complete an application and give your personal information. From there it can take anywhere from 3 to 10 weeks to receive the funding letter. In most cases, the money gets mailed directly to the college and any monies left over get sent to you.
Today, with advancements in technology getting an approval for an auto loan can happen almost instantly. If your credit is not on the desirable end, the process may take a day to two longer, giving the dealer time to find a lender willing to secure the loan. Just remember, the more money you have to apply towards the downpayment the more likely you are to get a favorable response, even if your credit is less than perfect.
Securing a Mortgage
Chances are if you are in the market for a home you will need a mortgage. Getting an approval for one takes several stages. First, is the preapproval. This is where the bank does a quick check of your credit and takes basic information including your annual income and your outstanding obligations to determine the amount you can borrow. This process is quick, generally only taking a day or two. From there, you find a home that you want to buy and the bank does an appraisal to determine the value of the home versus the asking price, as well as the condition. From there you go to contract with the seller and submit to the bank more detailed documentation. The entire process from start to the closing on average can take anywhere from 6 to 8 weeks.
People with bad credit who own their vehicle outright can apply for a title loan. With this type of loan your car, truck, boat or motorcycle is used to determine the amount you can borrow and the lender holds the clean title until the loan is paid in full. The approval process is fast since there is no credit check required. You simply need to show the title and a valid license. If you decide to take out this type of loan, just make sure you will have the funds within a month, as these loans are short term, generally just 30 days.
A Home Equity Line of Credit
Making major repairs to a home can become costly. A home equity line of credit offers a great way to have the funds available so that you can complete a project quickly, rather than in stages as you acquire the money. This open-ended loan uses your home as collateral. The nice thing about it is that as you pay it down you have those funds available to use over again. The application process takes anywhere from 4 to 6 weeks to receive the funds.
There are many different types of loans available. There are secured and unsecured, open-ended and closed. Whether you are buying a home or making an unexpected repair just make sure that you select the right one to need your needs.