Most folks taking out a loan at the last minute are often rushed and may not take the time needed to research their loan options. Granted, many loans are similar in nature. However, there can be small differences that make one loan more appealing. For example, if you wish to pay off your loan over an extended period of time, you might lean towards a vehicle title loan or an installment loan.
At a minimum, these types of loans typically allow 30 days or longer to repay the loan. Another detail to consider when researching loans is the interest rate you’ll be paying to acquire the loan. For the most part, all lenders will charge some form of interest because that is the way they make their money when lending.
However, with a little bit of research, you could stand to keep more money with a lower interest rate on a loan. Essentially, the best time to research a loan is before you actually need the money. You’ll have the time to examine the pros and cons of each type of loan to determine the best option for your particular needs when the need arises for a loan.
An installment loan may also be called a personal loan. Generally, these types of loans can be obtained from a number of sources such as online lenders, banks and credit unions.
Normally, loan amounts are agreed upon between the borrower and the lender for a set amount of money. The term or length of the loan is also agreed upon. Typically, a loan of this nature could have a loan repayment term as little as a few months or up to 30 years.
Once the loan amount and the length of the loan are determined with the interest rate, the lender works out the monthly payment. If the loan interest rate is fixed, the payment should be consistent throughout the loan period. If a variable rate is applied, payments can go up or down if there is a change in the prime rate set by the feds.
You will be asked to review and sign a contract and receive a packet with your repayment schedule. Each payment is applied to the interest and principal until the balance is paid in full.
1. Often times, online lenders may be able to provide a quicker loan process than traditional lenders.
2. Qualifying may be less stressful for applicants because lenders may have more relaxed lending guidelines.
3. Because payments can be spread out over a much longer loan period, applicants may receive a larger loan offer.
A title loan is often referred to as an auto title loan, car title loan or a pink-slip loan. The term pink-slip indicates the borrower has paid off the vehicle in full.
A title loan is a secured loan, which means the approved borrower will be required to secure the loan with an asset. Normally, acceptable assets used in these types of loans require a clear title to a working vehicle in the name of the borrower.
To simplify the loan process, car title lenders usually provide online applications and phone interviews for qualifying. The legal paperwork is wrapped up at a local loan store.
Loan terms, loan amounts and interest rates can vary per state and title lender. Loan terms may average 30 days but some could be several months. A car title loan is governed by some federal laws and state auto title loan regulations.
1. Borrowers are never required to disclose the purpose for the loan.
2. Secured loans normally make it possible to receive a larger loan offer with a better rate.
3. Most title lenders can process and pay out a simple car title loan in Chicago in one business day or a matter of hours.
4. The majority of vehicle title lenders do not charge applicants to apply.
A payday loan may also be referred to as a payday advance or a payroll loan. These are considered short-term loans because they are usually repaid with a portion of the customer’s next paycheck. Qualifying is normally based on a credit report and the income of the borrower.
A payday loan is approved at a local store location or some lenders offer online services. The customer must present a paycheck stub and sign a written contract agreeing to pay a sizeable interest rate, the principal and any loan origination fees.
1. Quick cash when a customer cannot qualify for other loan options or is in a big hurry for cash.
2. Convenient loan store locations.
Loan processes may vary from one lender to another. However, most lenders offer internet applications and quick loan processing and fast loan funds.
To follow state and federal laws, all three types of loans will require borrowers to sign legal contracts before obtaining loan funds.
Researching loan terms, repayment plans and interest rates before signing a contract for any loan makes good financial sense.
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