[ad_1]
Image Source: Getty Images
It’s important to know what your options are when you’re in a pinch and need money quickly. There are several types of loans that can be obtained relatively quickly, depending on your needs. Before taking out a personal loan, it’s important to understand the different types of personal loans and find the one that’s right for you. Here are four of the most common.
1. Credit card
If you have good credit, you may be able to get cash advances from your credit card. This is usually a quick and easy process, but it comes with a high interest rate. So if you can pay off your loan quickly, this could be a good option. Cash advances are very useful when you need cash in an emergency.
Discover: These Personal Loans Are Great For Debt Consolidation
Learn more: Prequalify for personal loans without affecting your credit score
Another advantage of using a credit card for cash advance is that you may already have available money on your credit line. This is useful if you don’t want to take out a new loan or use other assets as collateral. However, using a credit card also has its drawbacks. First, as mentioned earlier, cash advance interest rates are generally very high. This means that if you don’t pay off your loan quickly, you could end up paying a lot of interest. Additionally, most credit cards have limits on how much you can borrow up front. So if you need a lot of cash, this may not be the best option.
2. Payday loan
Payday loans are one of the quickest ways to get cash, but they come with high interest rates and fees. They’re usually only for small amounts of money, so if you need a lot of cash right away, this probably isn’t the best option. , payday loans work. However, payday loans are not ideal. These are short-term, high-interest loans that are usually paid in one lump sum by your next payday. Currently, 37 states regulate payday loans due to their high cost.
Payday loans are generally less than $500 and expire on the next payday. Depending on state laws, people can get payday loans online or through over-the-counter lenders.A typical two-week payday loan annual rate (APR) can be as high as 400%. In contrast, his APR on credit cards ranges from 12% to 30%. Payday loans should be considered as a last resort.
3. Pawn shop loan
A pawn shop loan is a short-term loan secured by items of value that people bring to a pawn shop. Backed by the value of the product, they are cheaper than payday loans, but more expensive than traditional loans. Pawn shop loans are regulated by the government. This type of loan is perfect for people who need instant cash without a credit check.
Lending conditions vary depending on the pawn shop. People can use valuable items such as jewelry and electronics to get loans based on the value of the item. No credit check required. Those who may not qualify for a traditional loan are advised to consider a pawn shop loan. Once the loan amount has been paid back, the item will be returned. If you do not repay, the pawnbroker can seize the collateral.
4. Title loan
A title loan is another quick way to get cash. They are short-term secured personal loans backed by your car. A financial institution will mortgage your car. If you can’t pay off the loan, they can seize your car because it’s being used as collateral. Title loans are usually approved quickly without any consideration of your credit.
These are four of the most common types of loans that can be obtained relatively quickly. Think about which one best suits your needs and compare interest rates and fees before applying. Understanding how these personal loans work can help you make smarter decisions increase.
Ascent best personal loans for 2022
Our team of independent experts has carefully scrutinized the fine print to find hand-picked personal loans that offer competitive interest rates and low fees.Review The Ascent’s Best Personal Loans of 2022 Let’s start by doing
We firmly believe in the Golden Rule. As such, our editorial opinion is ours alone and has not been previously reviewed, approved, or endorsed by any of the advertisers included. It does not mean. Editorial content for The Ascent is separate from editorial content for The Motley Fool and is produced by a separate team of analysts. Motley Fool has a disclosure policy.
The views and opinions expressed herein are those of the authors and do not necessarily reflect those of Nasdaq, Inc.
[ad_2]
Source link
