Many types of loans are available, and its upon yourself to know what type of loan you are looking for when the time comes for you to borrow, either from bank or lending institutions. With a little bit if research before you borrow, you can make a wise and informed decision. In summary there are personal and home loans to vehicle finance and student loans.
This type of loan is Ideal for people who want to use it for holiday or some much-needed home renovations, or even for a wedding. Your bank or lending Company will assist and help you determine your loan’s conditions – loan amount, interest rate, monthly repayments and your loan’s term – based on your personal information and requirements.
Personal loans – unsecured loans, which means you’re not putting collateral like a home or car on the line in case you default on your loan.
This loan is offered for people who want to build their first house of buying a new house of even additional property. Home Loan can help you secure your dream home’s financing. Your borrowing amount depends on your monthly income (before tax) and your monthly expenses – you can work this out using your bank’s home loan calculator or the home loan financing Company.
Pension-Backed Housing Loans
A pension-backed housing loan is an alternative form of housing finance where your loan is secured by your retirement’s saving instead of a bond. Monthly instalments are usually enabled by your employer through your monthly salary, and your maximum loan term is 30 years, or the length of time to your retirement.
Vehicle Loans / Car Finance
If you’re in need of some extra cash to buy a new set of wheels, consider Vehicle Finance. Once you’ve found the car you want and have chosen your financing option, you’ll generally have over 12-months to five years, or more, to repay your loan.
And finally, don’t let a lack of funds stop you from fulfilling your career goals. A Student Loan will cover any educational costs, giving you the comfort of knowing funds are available for all your studying dreams.
Debt Consolidation Loans
This loan is meant to simply your loans, by paying off all or several of your outstanding debts, particularly credit card debt. It means fewer monthly payments and lower interest rates. Consolidation loans are typically in the form of second mortgages or personal loans.
Like Home Loans, auto loans are tied to your property. They can help you afford a vehicle, but you risk losing the car if you miss payments. This type of loan may be distributed by a bank or by the car dealership directly but you should understand that while loans from the dealership may be more convenient, they often carry higher interest rates and ultimately cost more overall.
Loans for Veterans
The Department of Veterans Affairs (VA) has lending programs available to veterans and their families. With a VA-backed home loan, money does not come directly from the administration. Instead, the VA acts as a co-signer and effectively vouches for you, helping you earn higher loan amounts with lower interest rates.
Small Business Loans
Small business loans are granted to entrepreneurs and aspiring entrepreneurs to help them start or expand a business. The best source of small business loans is the U.S. Small Business Administration (SBA), which offers a variety of options depending on each business’s needs.
Payday loans are short-term, high-interest loans designed to bridge the gap from one paycheck to the next, used predominantly by repeat borrowers living paycheck to paycheck. The government strongly discourages consumers from taking out payday loans because of their high costs and interest rates.
A cash advance is a short-term loan against your credit card. Instead of using the credit card to make a purchase or pay for a service, you bring it to a bank or ATM and receive cash to be used for whatever purpose you need. Cash advances also are available by writing a check to payday lenders.
Whichever loan you’re interested in, research as much as you can before making any final decisions. And always try to pay back your loan as soon as possible to avoid excessive interest rates and monthly repayments.
Source: standardbank.co.za and debt.org