It’s Loaning Time: 3 Common Loan Options to RememberFeb 18, 2021
In an ideal world, people would have money to afford whatever they want and need. Unfortunately, reality dictates otherwise. Most only rely on their income to get by, making large purchases such as home and cars almost impossible. Expenses such as college tuitions and medical bills can also be difficult to afford, as these entail large sums of money the average consumer does not have.
Thankfully, there are ways you can gain access to cash, to be then used for a variety of purposes. One of the most common ways to do so is through loans, lent by banks or lending companies for your use.
These loans come in various types, however, all of which depend on your needs. Most people end up using mortgages and personal loans to purchase homes and relocations, while others make use of these options to get instant cash.
Whatever your needs may be, a little knowledge goes a long way. For this reason, we’ve gathered three of the most common types of loans, and what you need to know about them:
Loan Type #1: Personal loans
Personal loans are deemed as the broadest types of loans, and repayment terms can fall anywhere between 24 months and 83 months. They can be used for a variety of needs, including the following items:
- Medical emergencies and treatments
- Vacations and weddings
- Home renovations
- Purchase of electronics
- Debt repayment
Note: Personal loans cannot be used for college education needs.
It’s important to note that personal loans also come in two forms, which is secured and unsecured. Secured personal loans essentially pertain to options that are backed with collateral, such as your vehicle or home. Should you fail to repay your loan, the lender will take your property back.
Unsecured personal loans pertain to options with no collateral, and can only be backed by your signature. These are more expensive than secure loans, and will also require you to have an outstanding credit score.
Loan Type #2: Auto or car loans
Another common loan is the auto loan, which is essentially a type of secure loan that can only be used to purchase a vehicle. Borrowers are allowed to take on a repayment term of up to seven years.
Should you fail to meet the requirements, the lender will have the power to repossess the loaned car. Auto loans are relatively inexpensive and easy to secure, offered by banks, lenders, and even car companies.
Loan Type #3: Payday loans
For those looking to commit to short-term loans, payday loans are another common option. This loan can only be a small amount of money, typically lasting only until your next payday. You won’t need to worry about credit scores, however, as anyone can apply for them.
You’ll be given a repayment term of up to a week or two, where the amount can be automatically deducted from your account. This option is best for people who seek lower interest rates and require instant cash for various reasons.
The Bottom Line
Although the world is far from being an ideal one in terms of finances, more and more people now have access to better lives thanks to loans. People can now afford homes, purchase cars, and even cover emergency medical bills thanks to the loan process, but remember that such opportunities need to be used with caution! You can loan as much as you wish but never forget about the repayment plans.
For the best loan provider in South Africa, Hoopla Loans has you covered. We are one of the fastest-growing online loan brokers, offering you smart loan application systems designed to make the processes easier and more convenient. Secure your loans—reach out to us today!