Different Kinds of Personal Loans

Different Kinds of Personal Loans

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A personal loan is defined as a loan that is made to an individual to spend as he or she pleases. They differ from, say, car loans, which are made specifically and only to purchase a car, or mortgages, which are house loans, or other kinds of specific financing you may receive. Personal loans give you money to do whatever you feel you need to do.

One type of personal loan is a home equity loan. A large, long-term loan uses the equity in your home as collateral, or security for the lending company. If you cannot pay the loan they get your house. It’s also known as a secured loan. An unsecured loan tends to be harder to get; you have to have good credit and will pay a higher interest rate. Unsecured loans are rarely for as much money as home equity loans.

Finally, you can try the cash advance from lenders option . Cash advance loans are by far the easiest loans to get; you can qualify with a paycheck and a bank account. They don’t run credit checks of any kind. But they are small loans, in amounts less than $1500, and they must be paid back within two weeks. Needless to say, they are “emergency” loans only. A cash advance loan is not what you use to buy a new boat with, but it is what you can use to pay the electricity bill before the electric company turns your lights off.

Be wary of lenders trying to take advantage of you . Don’t take out any loan unless you completely understand and are comfortable with the terms of the loan, understanding all charges and fees, and the required pay schedule. No matter how badly you feel you need money, acquiring a debt you can’t pay will not help you.