What Are The Best Loans to Apply?

What Are The Best Loans to Apply?

If you think loans threaten your financial lifestyle and negatively affect your budget, you are only half right. Actually, loans can help you manage financial emergencies, start your own business, get the education you’ve always wanted, or even save some money on purchases. Assuming you use them wisely and know enough to choose the right option for your case, of course.

It is difficult to say which loan option will suit you most without understanding your current situation and needs. Some products offer reasonable rates and flexible terms but require a good or exceptional credit score to apply, while others have bad credit tolerance but are more expensive. You should pay attention to many factors to have a good lending experience without disappointment. We can offer you different options to consider depending on the term, loan amount, credit score requirements, collateral, and the speed of the process you need.

Personal Loans

Advantages: These loans are perfect to meet your long-term needs. They have flexible terms and offer high amounts to help you reach any of your financial goals. Personal loans offer reasonable rates and are not stressful to repay due to installment plans which allow borrowers to repay their loan costs in equal monthly payments. There are no restrictions on what you can spend the money for.

Disadvantages: Personal loans have strong documents and credit score requirements. If a customer wants to get a personal loan on good terms, he must meet them all and waste some time gathering all the required documents. That is why personal loans may not suit you if you’re looking for some emergency money.

Secured Loans

Advantages: Secured loans work almost as personal loans but are available for borrowers with less than perfect credit scores. You can repay the money within a long term that may reach 50 months.

Disadvantages: Secured loans require some of your property or valuable objects to use as collateral. You typically can’t get the full amount of your pledge value. You also have to gather all the required documents to apply.

Payday Loans

Advantages: Payday loans are good financial solutions for any financial emergencies. They are fast and easy to get and have easy-to-meet eligibility criteria. You can get the amount to cover your problems within a business day just by filling out an online form. Payday loans are available for borrowers with any credit and don’t require any collateral.

Disadvantages: Payday loans have limited terms and amount to borrow. You must repay the whole loan cost in one large payment, usually by your next paycheck. Payday loans are also quite expensive - an APR may reach 521%.

Installment Loans

Advantages: Installment loans combine some main advantages of personal and payday loans. Thus, they are easy to get with any credit, offer amounts up to $5,000, and have terms up to 24 months. A borrower can get the money usually within a business day without any paperwork.

Disadvantages: Installment loans are almost as expensive as payday loans. You have to overpay a lot if you get an installment loan for 2 years.

Credit Cards

Advantages: Credit cards are good for building your credit and always have some additional money to cover unexpected expenses. They are also secure and offer some reward points for regular use.

Disadvantages: Having access to more money may lead to overspending. That is why credit cards may be one of the easiest ways of digging yourself into a debt hole. Having too many credit cards or missed payments also can damage your credit.

 

Thus, all the loan types may be helpful on different occasions. If you have no problems with financial discipline and use loans wisely, they may be your partners on the path to financial literacy.

We hope now it becomes easier for you to decide on a loan option for your situation. If you still have some doubts or questions, you can seek credit counseling or enter our Financial Literacy LAB. We are always happy to help you grow, protect your finances, and take control of your financial destiny.