What is a personal loan? If you find yourself in a financial bind, this might be a question you have wondered once or twice.
In a nutshell, a personal loan is money you borrow from a lender that is paid back in a series of installments. You will have to pay interest on the loans and you might be charged additional fees. There are many different types of personal loans that you can use, depending on your situation and the amount you need.
Unlike other loans, personal loans are relatively easy to secure and they are funded quickly, giving you the money you need to handle an emergency situation or an unexpected expense. If you are wondering about the types of personal loans that are available, this short and simple guide is for you.
Unsecured Loans
An unsecured loan is a loan you secure without any collateral. You qualify for the loan based on your creditworthiness. If you are wondering if an unsecured loan is for you, consider getting guidance from bonsaifinance.com.
Secured Loans
One of the most popular personal loan options is a secured loan. This is a loan you qualify for based on the collateral you put up. Collateral can be anything from the title to your car to real estate.
Personal Lines of Credit
A common personal loan type is a personal line of credit. This type of loan is similar to a credit card, you have a limit you can withdraw from during a certain draw period.
As long as you pay the balance, you can continue to borrow. When the draw period is up, you have to pay any outstanding balance on the account.
Debt Consolidation Loans
If you want to consolidate your debt, consider getting a personal loan. A debt consolidation loan is useful for combining your high-interest debt into one low-interest payment. These loans are ideal for unsecured debt, such as credit cards, payday loans, medical bills, and more.
Payday Loans
A payday loan is a type of loan that is an advance on your paycheck. You apply for the loan and repay it by an automatic withdraw on or around your payday. These loans are typically high-interest and are ideal for emergency situations.
Credit Card Cash Advances
A credit card advance is a type of loan you can get without being approved. If your credit card has a cash advance feature, you can borrow up to your limit by withdrawing the funds from a bank or an ATM. If your card doesn’t have a cash advance, consider contacting customer service.
These Are the Common Types of Personal Loans
These are the common types of personal loans that are available.
Depending on your situation, you may need an unsecured or secured loan. You can also apply for a personal line of credit or a debt consolidation loan. Payday loans and credit card cash advances are also valid options when you need funding.
These are the most common types of loans you can apply for.
