The rise in living costs in recent years has resulted in people from across the length and breadth of this country and beyond struggling to maintain the way if life they had become accustomed to.
As a direct result, there has been a significant rise in the number of loans taken out and if you are considering doing the same, it is important to do your research.
In an effort to help you do just that, here are the five primary types of loans and how they can help.
1. Personal Loans
Perhaps the most flexible type of loan, a personal loan is for individuals who need extra cash for a variety of different reasons and, providing of course that this reason is entirely lawful, there are usually no particular restrictions on what the money can be used for.
You will find that some loan companies tend to offer personal loans for different reasons; say to pay for a wedding, to buy a new house, or even for medical bills or other health reasons. The typical length of a personal loan is between one and five years and for most companies, they expect a credit score of over 600.
2. Mortgage Loans
Unless you are incredibly fortunate (or indeed have worked hard to build an incredibly sizeable pot of savings) it is highly likely that, when looking to buy a house or apartment, you are unable to pay for property upfront and this is where a mortgage comes in.
Responsible and reputable loan officers in Michigan carry out extensive financial reports on a person applying for a mortgage, and are always more than obliging to help sort out any smaller issues or advise on how to improve a person’s chances of a successful mortgage application.
3. Home Equity Loans
As flexible (for the most part) as a personal loan, home equity loans involve borrowing money from what people have already paid back into the value of their home—in other words, the value of the property with the remaining cost of the mortgage taken away.
Home equity loans tend to be for at least a five-year term and can last all the way up to 30 or more years. As a standard practice, your credit score should be higher than 650.
4. Credit Builder Loans
For those who want to establish a stronger and more useful credit score—or indeed have had financial difficulties in the past and now want to reestablish a healthy credit rating—a credit builder loan is an excellent option.
After every successful repayment, the lender will report each payment to the bureaus of credit each and every month, and over time your credit rating will increase.
5. Automotive Loans
The fifth and final most popular monetary loan is that of an automotive loan, which is basically a scheme that allows the borrower to pay off their car, truck, or other vehicle over a specified length of time.
Usually, the payoff timeline for an automotive loan is between two and five years and crucially, as the money is secured against the vehicle being financed, a lack of regular repayments results in vehicle repossession.
