Greetings, and welcome to our website. If you’ve never looked into getting a personal loan before, you may have no idea where to start. If you have applied for a loan before, you may have been overwhelmed by the many different terms, types of loans, and the various rules and guidelines that apply to each. Our goal is to help make the entire process easier on you. Our website includes descriptions of the various types of loans, the application process for each, and will provide a number of different loan tools, such as a loan calculator.
Types of Loans
There are many different types of loans out there, and you may not qualify for all of them. Out of the ones you do qualify for, you will want to weigh the different pros and cons of each type before you settle on one. Some have higher annual percentage rates, while others have a better repayment schedule. Here are some of the basic types of personal loans:
- Unsecured personal loans are usually for between $1,000 and $15,000. You generally have up to four years to repay the loan, and the APR is usually between 5 and 20 percent. These types of loans are helpful as a consolidation loan or a loan for school or emergency expenses. A credit score of around 550 is generally needed for this type of loan, and you will need a minimum monthly income of around $1,500 or more. These requirements will vary depending on the lending institution and on if you can get a co-signer.
- Auto loans are loans taken out for the purchase of a new or used automobile. These loans can be for just about any amount, depending on the vehicle you are buying and your credit. The APR varies but may be anywhere from around 6 percent to 15 or 20 percent. Typically, new cars are financed for five or six years, while used cars may have a repayment period as short as a year. Qualifications include a credit score of 500 and an income of about $1200. Again, this may vary depending on a variety of factors.
- Home loans are loans used to purchase a home. Again, these loans may be for any amount, and the APR can vary greatly. With the recent upheaval in the banking and home mortgage industry, qualifications for home loans are in flux, and many people may find themselves in a position to get a great deal on a loan. Some home loans have a balloon payment on them, meaning that after a certain amount of time has passed, the borrower will have to repay the remaining balance all at once.
- Home refinancing loans are loans designed to renegotiate an original home mortgage loan. By refinancing, home owners can combine a first and second mortgage payment into one, get a lower APR, or extend the length of their loans. There are several fees associated with refinancing, including an appraisal fee and various paperwork fees. It can cost up to $2000 to refinance, but smart refinancing can save a home owner thousands in the end.
- Finally, emergency payday loans are basically payday advances. By providing proof of employment and a personal check, you can get cash immediately. If you don’t replay the loan plus all processing fees and interest, however, the payday loan company will cash your personal check. The APR on a payday loan is very high, often up to 30%, and there are usually extra fees too. These loans are very easy to get (all you need is proof of employment) and are very short-term.
These are just a few short descriptions of the various types of loans out there. Be sure to read up on each before you apply for a loan so you know all the various phrases and acronyms you may encounter. You should also familiarize yourself with current interest rates and what your credit score should entitle you to. Remember, the more knowledge you have about the different loans, the better prepared you will be when it comes to discussing terms with a lender.