Types of Loans
If you need funds to cover anything from a big purchase to basic expenses until you get your next paycheck, a loan can help you out. Once you take out a loan, the lender will give you cash that you can then pay back over time. Let’s dive deeper into the different types of loans available so you can choose the right option for your situation.
How do loans work?
Loans allow you to borrow money from a bank, credit union, or online lender. Once you take out a loan, you’ll gradually repay the full amount plus interest, often via monthly payments. If you don’t have the cash to pay for a certain expense or are facing a financial emergency, a loan may be a great option.
Different types of loans
The various types of loans at your disposal include:
Payday loans
Payday loans are short-term, small dollar loans. You’ll have to pay them back in full the next time you get paid, likely within two to four weeks. These types of loans may make sense if you need some extra cash to hold you over until you get your paycheck.
Installment loans
Installment loans allow you to borrow a lump sum of money upfront. If you opt for this type of loan, you’ll repay it through monthly payments over an agreed upon term. Loan repayment terms for installment loans can range from a few months to several years.
Title loans
Title loans are secured loans that provide fast cash in exchange for your car title. The value of your car will determine how much money you can borrow. Fortunately, you can continue to drive your vehicle while you repay the loan.
Lines of credit
Lines of credit are similar to credit cards. You can borrow as much or as little money as you’d like up to a set credit limit, which lenders will determine based on factors like your credit history and income. You’ll only pay interest on the amount of cash you withdraw.
Mortgages
Mortgages are home loans. With a mortgage, you can receive the money you need to purchase a home. You’ll likely repay your mortgage over a 30-year period via fixed monthly payments.
Pawn shop loans
Pawn shop loans are small loans you can take out if you have valuable items like jewelry or appliances. In most cases, the amount you receive will be a percentage of your item’s value. The pawn shop will then keep your item until you pay back the loan.
What type of loan is right for me?
Before you move forward with a loan, consider your financial situation. Ask yourself how much money you want to borrow, and whether you’d like a lump sum of money upfront. If you need a small amount of cash, for instance, a payday loan could be a good option. On the other hand, an installment loan may be the right fit if you’d like to take out a larger loan amount. And if you want a more flexible option where you can borrow money whenever you need to, consider getting a line of credit. Compare lenders and loan options to find the right loan for your needs.
Advance America offers different types of loans
Advance America offers different types of loans including payday loans, installment loans, title loans, and lines of credit. You don’t need good credit to get approved, and you can fill out an application online from the comfort of your home. If approved, you’ll receive the funds quickly, sometimes the same day you apply or within 24 hours. Visit Advance America today to learn more about the loans we offer.
