Your Source for Online Loans
Considering applying for a loan online?
Maybe, you’re looking into auto loans. Perhaps, the money is for another consumer expense, wherein it might make sense to take out an unsecured personal loan. In which case, you could find value in an online platform that offers personal loans and financial products that don’t charge higher interest rates.
Well, your final choice can make all the difference in whether you’re or approved for a loan, or if it’s beneficial for you in the long run. There’s an array of factors at play, including eligibility requirements, prepayment fees, and credit reports. Expectations all vary by lender.
Regardless, you must be informed about the various facets involved, such as debt to income ratio, the life of the loan, and prepayment penalties. Fortunately, you’ve landed on the right resource to learn all the necessary information—the wizards from MoneyWizard.co have done the research so you don’t have to!
What Type Of Loan Do You Need?
Loans can be an ideal way to boost your credit. They can also give you a cash advance for pressing expenses that play a pivotal role in your overall quality of life.
Despite the many positives that come with these transactions, you can land yourself in sticky situations when you aren’t informed. Not doing the legwork and failing to compare interest rates, extra fees, repayment terms, etc. might leave you in financial hardship.
Before applying for a loan, learning about the various types of loans available to you is vital to how this decision will impact your financial future.
At the very least, in performing due diligence, you’ll align with a lender who’s offering the most favorable terms, given your needs, financial situation, and credit score/history. With that said, here are the types of online loans you should research before applying for anything:
Personal Loans
When applying for and taking out this type of loan, the funding is for personal purposes. These are also known as consumer loans.
If you’re to take out a personal or consumer loan, you’ll require a promissory note acting as evidence of the debt. The scenario then necessitates the principal (ie, the amount borrowed) and an interest rate (ie.], borrowing cost).
In recent years, unsecured personal loans have been made more readily available through online platforms. These are high-interest debts often made available to people with lower incomes and lesser credit scores because they don’t require collateral. Conversely, you can take out a secured personal loan for a lower APR. You’d just need something to act as collateral (eg. your vehicle).
Student Loans
These loans are specifically for students and are often procured from the school you’re attending. There’s also Federal Financial Aid.
Securing a student loan with decent interest rates and favourable repayment terms will let you focus on investing in your future, knowing you won’t be shouldering an annoying debt after you graduate.
Preferably, you’d try to obtain a grant or scholarship because you won’t need to pay these back.Conversely, outright student loans take an average of 21.1 years to pay off. Furthermore, the average student loan interest in the US is 9.66%.
Small Business Loans
Small business loans tend to be for higher amounts (the small business association offers loans up to $5.5 million). Generally, you’d use these to pay for equipment, working capital, real estate purchasing, or refinancing. These types of loans can range anywhere from 5–25 years, but something called a microloan can be taken for a period of just 1 to 6 months.
It’s worth noting that these tend to be low-cost loans (especially for businesses with good credit), with interest between 7 and 10%.
Bad Credit Loans
These types of loans are for people who’ve made financial mistakes, such as defaulting on a loan or late payments.On the FICO scale that runs between 300 and 850, a score below 580 is considered bad.
If your FICO score is in this region, you’d likely need to find a bad credit lender if you require a cash advance. These tend to be unsecured personal loans, paid back through high-interest installments.
Loans for Debt Consolidation
When you consolidate debt, you’re turning several higher interest loans into one easier to manage and more affordable loan. This is generally applied as a financial tool to rebuild people’s credit. They charge lower interest rates and are regularly relied on when the borrower has amassed too much credit card debt (which has a notoriously high APR).
You Guide to Online Loans: FAQ
Here, we’ll answer some frequently asked questions about online loans:
How can I get a loan?
With online loans, you can avoid waiting in line at the bank and filling out endless applications.
Instead, it’s possible to find lending platforms that only require a quick application process. Provided you have the necessary information at hand (eg, ID, pay stubs, credit score, bank statements), you can visit these sites and get immediately approved.
It often only takes a day or two to receive your cash advance with these online lending platforms, which primarily specialize in unsecured personal loans.
How can I get a loan with bad credit?
It’s simple: search for bad credit lenders online, navigate whether the terms are favorable, and determine if you can afford the loan’s APR. Furthermore, ensure you meet the requirements to get approved (e.g., your credit score is high enough). Note that an application rejection could cause more damage to your credit.
How do I apply for student loans?
Your first option is visiting the Federal Student Aid web page and seeing if you apply. On top of that, inquire with your educational institution to see if you’re eligible for a student loan and follow the application prompts. Beyond that, you can also take out an online personal loan to pay for nagging educational fees.
How do I calculate interest rate on a loan?
Take your interest rate and divide it by the number of installments you’ll pay during the years (interest rates are annually based).
What is a Bridge Loan?
These are short-term loans, often taken out over 2-week to 3-year span. The point of these loans is to tide the borrower over into their longer-term financing plan. Essentially, you’re getting rid of a nagging obligation with immediate cash flow that you’re procuring at high interest. These transactions often necessitate collateral, whether it’s real estate or inventory.
