8 Different Types of Loans Available in 2019
2019 is here, and it’s time you use your New Year’s Resolutions for good. Start with your finances, take responsibility for your mess, and start building your credit from scratch. If you need help, there are several types of loans you can take including the following:
Mortgages are perhaps the most popular type of loan. These let you buy a home you can’t buy upfront. The mortgage is tied to your home. Yes, this means you risk foreclosure if you fall behind on your payments. These loans have the lowest interest rate.
2. Debt Consolidation Loans
Debt consolidation loans are among the most popular loans. These loans simplify your finances. It pays off all your outstanding debts, especially credit card debt. This means you will have to pay fewer monthly payments with a lower interest rate. These are more of a second mortgage or personal loan.
3. Auto Loan
Auto loans are secured loans that are also tied to your asset. These loans finance vehicle purchases, but you risk losing the car if you fall behind on payments. A bank or car dealership distribute this type of loan.
You must know that even if the dealership loans are convenient, they incur high-interest rates, and are difficult to pay off.
4. Small Business Loan
These loans are lent to businesspeople who want to start a business or expand it. There are several options, as both federal and private sectors offer such loans. Every sector has their advantages and disadvantages. So, carefully review the terms before signing up.
5. Student Loans
These loans are geared toward college students to help them cover the costs of their education. There are two types of student loans:
- Federal Loans
- Private Loans
Federal loans are a better choice as they have lower interest rates and friendlier repayment options.
6. Installment Loans
An installment loan is a type of loan which is repaid within scheduled payments. In general, at least two payments are made towards the lender. The repayment time can extend from a few months to decades.
The term installment loan is often associated with consumer loans including mortgage and auto loans, etc. These loans are serviced and repaid over time with a set of regular payments with principle and incurred interest. Installment loans are safe and affordable compared to other options. Log onto KingofKash.com for more information.
7. Payday Loan
These are short-term yet high-interest loans that help cover the gap between one paycheck to another. In most cases, repeat buyers use this loan as they live paycheck to paycheck. Governing bodies are against these loans because of their high cost and interest rates.
8. Retirement Funds
It’s possible to borrow from your retirement funds, even life insurance. It’s common, and yes you can do it if you are eligible to borrow from the account. As you are borrowing from yourself, the repayment is easy. But if you fall back on your payment, the consequences will be severe — still, it’s better than borrowing from family members or paying interest to a third-party.