Struggle to get a loan During the Pandemic? When it comes to getting one, there are several options. Common types of loans include:
Personal Loans
These are the most common and the most affordable type of loans. You apply for a personal loan and provide your employer or company as collateral to secure that. The main advantage is that you do not need to give any collateral as long as your payment is stable, and you can pay it back on time. On the flip side, this type of loan does not allow you to borrow as much as possible without putting too much strain on your financial resources.
Unsecured Loans
This type is more flexible. You will not need a credit history or a regular income to apply for one. Unsecured loans are more expensive, and they do not allow you to borrow as much as possible, but they are a good option for those who only need a small amount of money.
Home Equity Loan
If you own your home, you can use it as collateral and borrow money from the equity in your house. The interest rate varies depending on market conditions and the value of your home. But it’s an excellent way to access cash with interest rates that are lower than what you would pay for other loans. However, you will need to pay closing costs and the fees to take out a home equity loan. Thant way you should only do so if you really need the money.
International Student Loan
International students living in the U.S. may apply for educational loans for school needs and for other personal needs such as rental and utility payments and food expenses. Private lenders give out these loans, and they must be repaid within a specific period of time – usually up to 15 years – with no interest or very little interest charged. The U.S. Department of Education administers the loans and handles the repayment to ensure that borrowers get what they’re entitled to, but you must comply with U.S. laws and regulations while repaying the loan.
Medical Loan
This type of loan is designed to help people who need immediate medical advances or treatments. Such as cancer patients and heart attack victims. But you must be seriously ill and be able to prove it in order for this type to be an option for you. Most medical loans run between $5,000 and $20,000;. However, some high-interest private lenders may offer loans up to $100,000 for more serious health conditions.
Job Loan
If you are unemployed, you can apply for a job loan. That will help you cover your bills while you are out of work. Your salary can determine the amount that the bank or lender will give to you. But it will likely not exceed six times your monthly income. On the other hand, if you have a steady income, it is better to get a secured loan that allows you to borrow up to five times your salary. Most lenders will allow you to take out more than one at the same time. This means that if something happens to your job, it could be easy for you to find another one before repaying the first one.
Credit Card
For credit cards, you can apply either online or in person. Most credit card companies will accept your application if you have a job and some sort of earning capacity. As for the interest rates on credit cards, the more risk factors you have, such as bad credit and high debt, the higher potential interest rates on your credit card will be than someone with good credit and lower debt.
Secured Credit Card
A secured card is one in which the money is tied to some type of asset such as a home or car. When you apply for a secured credit card, you will need to put up some type of collateral. Such as personal property – either a car or a house. The amount you can borrow on this type of card tends to be lower than the general loan amount.
Unsecured Credit Card
An unsecured credit card is similar to a regular credit card, but it does not require borrowing money against your home or car. You will have to pay it back in full within 25 months or face penalties. Interest rates are typically much higher for this type of credit because the lender has little protection if things go wrong with your payments.
Secured Personal Loan
A secured loan is also known as an asset-based loan. This type is typically used when an individual does not have a substantial credit history. In this case, the individual must use a valuable asset to offer as collateral for it. The borrower can put up any kind of valuable property such as a vehicle, boat, home, or business in order to secure it.
Unsecured Personal Loan
An unsecured personal loan is also known as a signature loan. It is provided without any type of collateral and solely on the strength of your credit rating and ability to repay. If you do not have much or any established credit history, then you may find it difficult to get this type.
Private Loan
Private loans are meant to give you more lenient terms and conditions than public loans. In most cases, they come with flexible repayment options and lower interest rates. They can be used in a variety of ways: for college, homes, businesses, and more. The catch with private loans is that you will not receive any financial aid through the federal government; instead, you will need to find a company that is willing to work with you on your terms.
Refinancing is when you look at your current loan or mortgage and consider taking out a new one to lower your monthly payments by extending the term of it. This way, it’s easier for young professionals to pay off their debt. However, you should be careful because the longer you stay in debt, the less money you will end up having to spend on other things.
Reverse Mortgage
Reverse mortgages are loans for seniors who are 62 or older and own their homes free and clear. The loans start out at very low interest rates. But increase sharply after five or ten years until they hit a fixed rate equal to the current home value plus the unpaid amount. If you move within this time frame, it is possible to cancel or reduce your obligation. Because no payments are required while you still live in your house.
