There are many different types of loans for the benefit of the general public. However, some of these loans end up ruining the lives of people through interest and late fees. It is important to know what loans to stay away from and what loans are legit.
The traditional loan would be from a bank. These loans are fairly simple to understand because they come with a contract that is explained by a professional. These loans do have high interest rates. They are based on a borrower’s credit report, too. A loan from a bank will have a fairly low monthly payment, but this payment can extend for several years. A loan from a bank can range anywhere from one to fifty-thousand dollars.
The next loan would be a cash loan; there are usually one or two establishments in every city that offer this type of loan. Establishments providing cash loans do not check a person’s credit, but they do make sure the person borrowing the money does have a job and a bank account. This loan can usually reach approximately fifteen hundred dollars. However, people are expected to pay this loan back within thirty days or even sooner.
Another loan would be a payday loan. A payday loan can be found online. There are a lot of scams, however, so it is important for people to visit a website with excellent ratings and reviews. Payday loan companies do not check credit reports, but personal information is required such as job and bank account information. From the moment this type of loan is taken, it must be payed back by the next paycheck. Beyond that, the money must be in the borrower’s bank account for the payday loan company to take, or there will be heavy fees added to the principle balance.
The last type of loan, which is the best type of loan, is a friend-to-friend loan. This is a loan from a friend or relative that a borrower agrees to pay back on a certain date. These loans are the best because there is no credit check and no interest added to the amount of the loan.
Though there are many different types of loans, it is best not to take a loan unless it is an emergency or a very small amount. Loans have ruined the chance of getting a home or even a job for certain people.