A little over 1% of all the adults in this country have perfect credit. The rest have scores that range from poor to great.
You’re probably well aware of your credit score, and you probably also understand that your credit score affects your ability to get loans.
If you need a loan but are not sure what your options are, you might want to start by learning more about the different types of loans.
Once you understand the different types of loans available, you can look for the right type for the purpose you have.
Here are some of the main types of loans you can get that you should understand.
Most people are familiar with auto loans, as these are one of the most popular types of loans you can get. An auto loan serves one purpose, which is to help you buy a vehicle.
You can qualify for auto loans with all credit scores, but you will pay higher interest rates on car loans if you have a low credit score.
Interest rates are closely tied to a person’s creditworthiness. Therefore, you will likely qualify for the best rates if you have excellent credit.
Home Equity Loans
The second type of loan you can get is a home equity loan. If you own a house and have equity in it, did you know that you can tap into this equity to get cash?
Getting cash through your home is something homeowners do for many purposes. Some people do this to consolidate their debts, while others do it to pay for home remodeling projects. You can use the money any way you desire.
To get a home equity loan, you will need to meet specific guidelines. One of these is a good credit score. Secondly, you need to prove you have equity in your house. Finally, you must apply for the loan with a lender that offers these loans.
Another common type of loan is a business loan. If you own a business and need cash for any purpose, you can apply for a business loan.
Business loans are different from other types of loans, yet lenders generally have the same requirements. You must prove that your business can repay the loan, and they might base the decision on your credit.
Credit Card Cash Advance Loans
If you have a credit card with an available balance, you can borrow against it. This type of loan is called a credit card cash advance.
Before doing this, check your statement to see how much you owe and how much your credit line is. Once you know these two things, subtract your balance from the total credit line to determine how much you can borrow.
You may also want to look at your statement to find out if there is a limit on the amount you can borrow through a cash advance.
Using a credit card cash advance is one of the simplest ways to borrow money, but it is not always an option. Some people do not have credit cards, and others do not have any available credit to borrow against.
Another option to consider is a payday loan. If you have a job and bad credit, this is the ideal loan to evaluate. A payday loan bases your loan amount and decision on your income.
You’ll have to bring your pay stubs to show the lender, and they can approve you instantly. If approved, you’ll have the cash within minutes.
If you have bad credit right now, it might be worthwhile to use payday loans until you improve your credit. Taking time to improve your credit is valuable in the long run, but it takes time.
Pawn Shop Loans
Some people turn to pawn shops when they need loans. Using a pawn shop loan is simple and guaranteed. The pawnshop won’t check your credit, either, so you don’t have to worry about that when using a pawn loan.
To borrow money through a pawn shop, you must bring a valuable item to the shop. They will appraise it and make an offer on the item. If you agree to the offer, you’ll receive cash right away.
You’ll have a specific amount of time to return to the shop to pay off your loan. When you do this, you’ll get your item back.
A personal loan is another excellent option if you have less-than-perfect credit. Personal loans do not typically require collateral, but some might.
With a personal loan, you’ll have to fill out an application and prove your identity and income. Next, you’ll get cash quickly.
You typically repay a personal loan in installment payments, but some might be different. You can use the proceeds from the loan any way you wish.
Car Title Loans
One more option to consider is a car title loan. You can get a car title loan with any credit score. All you need for it is a title to a vehicle that you own. If you have a car titled in your name and proof of your identity, you can apply for one.
If approved, you’ll get the cash fast, and you’ll have several weeks or months to repay the loan.
There Are Different Types of Loans for Different Purposes
Now that you understand the different types of loans available, you might know which type you should get.
If you need a personal, business, or auto loan, we can help you.
You can learn more about our loan options by visiting our website. You can also apply for a loan or request more information about our loan products by visiting our site.