Need Money? – Here are Three Loans to Consider


If you are looking for a loan that you can acquire relatively easily, here are three to consider. Each has its own terms and requirements, and fit a specific need, so do your research and speak with your lender before considering selecting one.

Personal Loan

A personal loan is usually an unsecured loan that you can do with just about as you choose. However, depending on the amount and your credit score, the lender may want to know about you, your purchase and how you intent to pay it back. The borrower receives the full amount of the loan at the beginning of the term and makes predetermined payments. Interest rates are generally fixed and will be lower than credit cards. Terms are usually two to five years. Personal loans are often considered best used for longer-term financing and for things like consolidating credit card or other debt, or even starting a small business. They are also constantly discussed as alternatives to credit cards and can have some advantages in terms of lower fixed rates, but can come up short when you consider the travel miles, discount points, purchase insurance and concierge services some credit cards offer.

Car Title Loan

A car title loan, is a type of secured loan where borrowers allow lenders to place a lien on their vehicle title as security for a loan. When the loan is repaid, the lien is removed and the vehicle title is returned to its owner. If however, the borrower defaults on their payments, the lender may repossess the vehicle and sell it to repay the borrowers’ outstanding debt.

The lending company evaluates the price of the car based on wholesale values and then gives a loan based on what it thinks the car is worth. So borrowers can expect their cars to be valued on the very low-end of the scale.

These loans are nearly always short-term, and carry higher interest rates than other sources of credit. Lenders typically do not check the credit history of borrowers and only consider the value and condition of the vehicle that is being used as security. These types of loans are most often sought by borrowers who are already experiencing financial difficulties.

Most title loans can be acquired in 15 minutes or less on loan amounts as little as $100. Because this type of loan is based on equity in the car, the borrower will need to own his car outright. The lenders do not generally consider the borrower’s credit score but there may be requirements for age, proof of residence and proof of income.

Line of Credit

A line of credit is a common type of loan for homeowners. The bank essentially extends your bank account limit to an amount that includes the loaned amount. Banks calculate how they fund and charge interest differently but essentially an amount is loaned to the borrower to cover any additional amounts spent out of that account. Line of credit are designed to be short term with most being offered for periods of one year with automatic renewal for an annual fee. Interest is charged only on the amount spent (loaned) until that amount is returned.

Line of credit loans are most often given to the bank’s best customers and as a result, they typically carry the lowest interest rate a bank offers. Since the financial crisis however they have become increasingly hard for all borrowers to secure. If you think you might want a line of credit, your banker will want to see your income statements and tax returns.

Each of these loan has its own merits, use this guide to help you decide if one fits your needs.

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