When you need to get a loan, you may or may not have the option of going to the bank and getting a traditional bank loan. These options work well for people that have an established credit history, provided that their credit rating is good. There are definitely some distinct advantages to getting a loan from a bank. For example, they tend to have lower interest rates and they may allow a longer period of time to pay the loan back, often resulting in lower payments every month.
However, there are some drawbacks associated with these traditional bank loans as well. One of the biggest disadvantages is that people who don’t have a well established credit history or who have had credit problems in the past may not qualify for any bank loans. By the same token, traditional banks can take quite a long time for you to get approved for a loan, even when you have excellent credit. If you need something quickly, you don’t always have time to wait. Fortunately, there are other options available for you if a bank loan doesn’t fit your needs for one reason or another.
Loans for Bad Credit
When you have bad credit, it can sometimes seem like the entire world is out to get you. People don’t always end up with bad credit because they’re irresponsible or because they have intentionally done something to cause the problem. A lot of times, unexpected things can happen such as job loss, a death in the family or divorce. This can send a person into a financial tailspin that is very difficult to recover from. If you have credit cards, it only takes missing a few payments before your credit ends up taking a hit in a major way.
The next thing you know, you’re being told that you don’t qualify for loans to help you get back on your feet, even when you’ve been financially responsible for years prior to this event. Fortunately, there are loans designed just for people with bad credit. Installment loans, as they are often called, may work well for you if you find yourself in this situation. The interest rate is considerably higher, but you may have anywhere from several months to a little more than a year to pay the money back and there are typically fewer hurdles to overcome when it comes to getting the money.
Payday Loans
Payday loans can be used to your advantage as long as you don’t borrow more money than you can realistically afford to pay back. It doesn’t take very long to get a payday loan and typically, there is no interest charged as long as you pay the loan back in full within 30 days.
If you simply need a little extra money to make it through until your next payday, this is an excellent way to get what you need. There are many storefronts that specialize in these types of loans, allowing you to get what amounts to an advance on your paycheck that you then pay back when you get paid. In some cases, you also have the option of paying that amount out in installments but you’ll have to pay interest on it.
Short Term Loans
Sometimes you just need a relatively small amount of money to help you pay for an unexpected expense or to help you get back on your feet so you’re not behind on your bills. A short term loan may be perfect. You can borrow a relatively small amount of money, such as a few hundred dollars.
You then pay that money back over a period of several months. Granted, the interest rates are fairly high, but these loans are easy to get, even if you have a few issues with your credit. They don’t typically take very long to approve, either. This is a definite plus if you need the money quickly.
Same Day Loans
A lot of short term loans and installment loans also qualify as same day loans. If you need money for an unexpected emergency, the last thing you want to do is wait for a week or two to get the money that you so desperately need. In cases like this, you need the money right away. Same day loans can help you get the money in as little as 20 minutes. You can even apply online and have the money sent directly to your bank account.
Loans With No Guarantor
A guarantor is someone who is willing to sign the loan paperwork saying that if it’s not paid back, they will be responsible for the loan. It is possible to get a loan with no guarantor, but you will typically have to put something significant up for collateral in order to do it.
If you have an automobile with a clear title, you can agree to take a loan out that will effectively sign that title over to the loan company if you fail to pay it back. It might seem scary, but if you’re desperate for money and you need it quickly, it is an option that you can always consider.
Now that you know more about the different types of loans available to you, you can make an educated decision about which type is best for you. Everyone is different, so it’s important to choose a loan based on your financial needs and then structure that loan to fit a repayment schedule that works well for you.
