While it would be wonderful if we could pay for everything with cash, there are times in all of our lives when that simply isn’t possible. It may be an emergency situation that causes us to seek a loan, or perhaps a big ticket item that would require a lottery win in order for a cash payment to be made. Whatever the case, loans have become standard operating procedure for most families, so let’s take a look at the most common types of loans available to you.
Personal Loans
While many loans are given based on a specific need, this type of loan is offered by banks for just about any expense you may need to incur. It could be used for renovating your home, taking a vacation, or just about anything else you can imagine. These are among the easiest loans to get and don’t require a ton of paperwork. Approval is usually granted within a day or two, with the only real downside being that the interest on such loans tends to be quite high.
Credit Cards
If you want to talk about high interest loans, then you need to bring credit cards into the mix. Most people don’t think of credit cards as being a form of loan, but they actually fit the criteria perfectly. You are given money you basically don’t have to make a purchase, which then has to be paid back with interest added on. In this case, that interest can be in the high teens as far as percentages go.
Payday Loans
If you believed that the interest rates with credit cards were high, you need to look at payday loans, as they tend to be the highest of all. Payday loans are becoming increasingly popular, especially among those who are forced to live paycheck to paycheck. The benefit of these types of loans id that approval is often instantaneous, but the downside is that they need to be paid back quickly with interest rates through the roof.
Car Loans
If you need a new car, the bank may be the first place you need to turn in order to get the financing. If you have a specific figure in mind that you want to spend, you can contact your financial institution first to see if they will front you the money. The other option is to go and choose the car that you want and then allow the dealership to try and secure financing for you, although you are often at the mercy of the banks in regard repayment when you go that route.
Mortgages and Refinance Loans
The biggest loan out there, as it usually runs into the hundreds of thousands of dollars. The interest rates are certainly low, but that’s a necessary since you will likely be paying this one of for the remainder of your life.
Many people refinance their mortgages multiple times not only for better rates but also for many expenditures, like home renovations, college education, medical expenses and also for tax benefits.
