Different types of loans

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There are many types of loans provided by the financial institutions. Figuring out which is the best is a challenging and time-consuming. Loans proceeds are used for a variety of purposes. Your needs will determine the type of loan you apply for.

When you want to apply for a loan, you need to figure out your need and find the particular loan suitable for you. The list can be long, and therefore you need to take some quality time knowing your needs so that you can choose the right type of loan. For information check on this site 1hourloanusa.com.

Personal loans

loans These are the type of loans that are offered by most banks, the proceeds are used for any expense. These loans are unsecured, and they usually range from a few hundred to a few thousand, the banks do not offer much in this type of loan. Application to the loan is simple typically requiring one or two pages in length.

After you apply, you wait for a few days for approval or denial. When you apply for this loan, the lenders require some form of verification such as o proof of assets that are worth at least as much as the amount of an individual is borrowing. However, the interest rate on this loan is quite high.

Credit cards

Credit cards are particularly attractive to use because it is acceptable by many companies as a form of payment. When a person is using a credit card, he or she is taking out a loan. When you are applying for a credit card, it takes at least two weeks to be approved.

The money from this kind of loans can be used for virtually anything you want. The interest rates on these credit cards depend with the company, but it is roughly 25% per year. Unlike other types of loans, you are likely to rack up debt while using the credit card because it is highly acceptable as currency.

Home-equity loans

In this category of loans, a homeowner may borrow money against the equity that they have built in their homes. The amount you borrow is equal to the value of your home. To determine the amount of home equity is to figure out the difference between your home’s market value and the amount that you owe on the mortgage.

This type of loan is typically used in debt consolidation. The interest rate on home-equity loans is quite reasonable because it is somewhat affordable for most people. This loan usually ranges from 15-20 year, and this makes attractive to borrow a significant amount of money.

Small business loans

cardsThis loan is provided to entrepreneurs to expand their business. It is offered if only the entrepreneurs have submitted a formal business plan to the financial institution he or she lends from, and received an approval.

The entrepreneur has to guarantee the loan; he or she must put up personal assets as a proof in case the business fails. The consumers of the loan are given a period of five to twenty-five year to repay the loan.