There are a million reasons why you might need a loan. Everything from an emergency situation to needing to do some home repairs. Finding the one that will work best for you can be a daunting experience. It could have a profound effect on your financial status as well as your credit score. Before you plunge in with the first loan you find, let’s review some options so you can make an informed decision.
Get Your Cash Early
Advance loans are fantastic choices should you be faced with a serious emergency, such as your car breaks down and you need some costly repairs to get it back on the road. These are short-term loans with re-payment to be completed within six months. The payment schedule is based on your frequency of pay and could be weekly, bi-weekly, or monthly. Applying is easy and the inquiry by the company does not affect your credit score. Be sure to make your payments so that you can have good reports hitting your credit profile.
Get Personal With Your Finances
Personal loans are a good option for people who are wanting to start building credit, if they need to repair their credit, or if they want to make a large purchase. Loan limits widely vary by the bank, but we have found that most don’t exceed $3,000. Usually, you have six months to a full year to pay off your debt. Interest rates can vary by your credit score but usually, the bank has a set interest rate that you have to qualify for. We recommend applying to a local credit union as they often can offer a lower interest rate than traditional banks and they are willing to work with people who may not qualify at a big bank. If this loan is to help your credit, we advise not paying off the loan early. Making timely payments shows the credit bureaus your ability to manage money and increases your score more than if you pay it off early.
The Home Loan
Mortgages are the type of loan you need to purchase a home, mobile/modular home, apartment or condo. Of all the loans you should research, this is the one you should research until your eyeballs fall out. Buying a home is a long-term investment and the right mortgage can help you meet your goals without hurting you financially. What a lot of people forget is that there is more than just the price of the house and taxes to pay. There are a lot of other fees and interest rates can change often during the life of your loan. Make sure your loan officer is clear about all your options and looks for the absolute best deal out there.
Consolidate Everything Together
Consolidated loans are the option for people who want to lump all their debt and pay it off in one monthly payment. It can make everything easier for you and lower your debt quicker than if you were trying to pay off each thing separately. You can usually get a lower interest rate as well. There is one downside to this type of loan. Once you pay this off, you will not have any open lines of credit. It can be good if you are in financial counseling to improve your management skills. If you want to keep your credit cards, this is not going to permit that.
Loans are always available for those who need it. Always understand what the interest rate is, the terms of repayment and if it fits your budget. No loan should cause deeper debt than you started with before!