You’re struggling to make ends meet and decided a loan will help bridge your current financial troubles. But what loan is best for you? Here TLC Loans break down the types of loans available and what you should be looking for in a loan provider.
You’ve decided you’re moving forward with refinancing. Now it’s time to choose the loan features that best meet your needs. Let’s start by looking at types of loans available on the market in 2020…
Personal Loans: Personal loans are among the most versatile types of loans, providing funds for pretty much any purpose.
Auto Loans: Auto loans allow borrowers to pay off a vehicle over time. They are typically secured by the car being financed, meaning that if the borrower does not make their payments, the lender can repossess the car to get its money back.
Auto Title Loans: Auto title loans are loans secured by the document that grants legal ownership of a car.
Student Loans: Student loans pay for education and education-related costs. That includes school tuition, housing, food, textbooks, transportation and more.
Mortgage Loans: Mortgage loans allow people to purchase a house without having enough money to pay for it all upfront. With a mortgage, the borrower can live in their home before they’ve paid the full price for it.
Home Equity Loans: Home equity loans are just as versatile as personal loans. Borrowers can use them for just about anything. The amount of money that a borrower can take out depends on the equity in their home, which is the house’s worth minus the balance left on the mortgage.
Credit Builder Loans: Credit-builder loans are loans for people who don’t need to borrow money but want to establish or reestablish a history of timely payments and thus improve their credit.
Payday Loans: Payday loans are extremely predatory short-term loans that must be paid back with interest when the borrower receives their next paycheck.
What Type of Loan Should I Get?
While there are many different types of loans available, there is usually one type that will work the best in any given circumstance. Student loans are best for education, auto loans are best for cars, etc. And for miscellaneous expenses like medical bills, debt consolidation and more, personal loans are usually the way to go.
Keep in mind that it’s best to take out a loan only when it’s a necessary expense. Using them for vacations or purchasing big luxury items beyond your means can lead to racking up unnecessary and expensive debt. That won’t be good for your wallet or your credit score.
Finding the Best Personal Loan
Finding the best personal loan for you will take a little bit of work, but it’s worth the effort to get the best available offer from a reputable lender. A 2018 U.S. News survey found that more than 21% of respondents didn’t research their loan options at all before applying for a personal loan, and almost 34% spent only two hours or less reviewing their options. Researching your options allows you to compare multiple offers and choose the personal loan that’s right for you.
Before taking out a personal installment loan, check out the following considerations first:
Company website: Many companies have websites where you’ll find details about loan products offered and their rates, terms, fees and more. And you’ll typically find the lender’s contact info online as well, so you can reach out if you need more info.
Online reviews: You can find out what customers are saying about lenders by reading online reviews. Sources such as Google Reviews and Facebook reviews will give you a good sense of customer satisfaction to see how they’re performing.
Better Business Bureau — While getting the best deal you can is important, working with a trustworthy institution is just as important. One resource that can help you research lenders is the Better Business Bureau, a nonprofit dedicated to helping people find reputable businesses to do business with. Through their website, you can search for companies to find out what BBB rating they’ve earned and whether they’re accredited by the Better Business Bureau. You can also read customer reviews and complaints and check out scam alerts that consumers have reported to the BBB.
Educational sources: Sites that are dedicated to educating consumers about financial products and services often provide information about loan products and provide access to educational resources and incentive programs.
Hidden Fees: Many companies have extra hidden fees that you won’t find out about until it’s time to pay up. Research the company’s credibility and openness with any additional fees that may pop up further down the line.
Quality of Customer Service: When you have questions, how do you want them answered? Personal assistance and online capabilities to get your questions answered in a timely manner are important. Find a lender that provides the service you expect when you need it.
Questions to Ask
Research your options and compare loan features for all the lenders you are considering. For each lender you’re considering, be sure to understand the answers to the questions below.
- What is the application process?
- Who is considered an eligible borrower?
- What are the approval criteria?
- What are the minimum and maximum borrowing amounts?
- What is the interest rate and is there an interest rate cap?
- Are the interest rates variable or fixed? If variable, how often do the rates change?
- Are there application or other fees?
- What are the loan repayment terms and borrower benefits?
- What are the prepayment penalties, if any?
Figure Out How Much You Need
You know how you’re using a loan. You’ll also need to borrow enough to cover those costs and any origination fees you don’t plan to pay out of pocket. If you’re consolidating credit card debt, you’ll need to borrow enough money to pay off credit card balances and cover any loan or origination fees.
Maybe you plan to use a personal loan to cover a major expense, like a house move.. You should fully research all the costs you can expect to cover and decide on a budget to ensure you borrow enough money. Most lenders have a minimum and maximum balance for personal loans. So if you know how much you need to borrow, you can quickly determine if a lender would agree to those terms.
Once you have made your informed decision to refinance… Gather the information you need to apply. This varies from lender to lender, but you will usually need:
- Your Social Security Number
- Your address and phone number
- Income information
- Banking information
You’ve submitted the application and the lender has reviewed it. If everything checks out, the lender will extend you a formal offer through a loan agreement. The loan agreement should fully outline the details and terms of the personal loan. This will include all fees and costs, repayment length, and disbursement details for how you’ll receive the loan funds. Make sure to fully review this contract so you understand what you’ll be signing on for. Most lenders now allow online sign off of your agreed loan.
How fast you get your money again depends on the lender, some offer next day funding in your bank account, while others can take up to two weeks.
Getting a personal loan right for you needn’t be too complicated. Choosing the right loan that works for you will require research, comparison, and some tough decisions. But given the current economic climate, getting the cash you need now is the key to making wise decisions without compromising your financial future.
More from TLC Loans
Our mission as an installment lender is to provide our customers with a convenient personal loan online and being a dependable source for their financing needs!
Furthermore, as part of our commitment to helping our customers meet their financial goals, we provide access to educational resources and incentive programs. By offering a personal installment loan as an alternative to a payday loan we want to see you on your way to financial recovery.
At TLC Loans the personal loans we make are as individual as the people who apply for them! We make personal loans easy, convenient, and affordable with fast loan solutions. If you need a personal loan, we can help! Apply today and get your money tomorrow.