If you need money, one of the things you can do is to try borrowing it. Loans can be your best friends, or your worst enemies, it just depends on the amount of info you’ve managed to gather, the purpose you need them for, the amount of time you have to return them, but the most important thing for every person who wants to take a loan, are the terms and conditions of the agreement. Why? The answer is simple – you need to make sure you’ll be able to return a loan, since every other option can cause serious problems and consequences, that you would certainly want to avoid.
What type of borrowing can you make? This question often pops up when one needs money and is not sure where to start. Typically, there are 7 different loans, and keep in mind – not every loan will fit your needs and meet your requirements. They also vary when it comes to the interest rates, and it’s the main factor that determines whether someone is willing to get a loan or not. However, besides the interest rates, you also need to make sure the repayment ratio and dynamic suits your financial abilities – in order to be able to make everything go smoothly.
Finally, for some loans you will need to make sure to have collateral to which you can tie your loans, as a form of security for banks or other providers – if unfortunately, you don’t manage to pay out your loans on time. Still, not all of them need to be secured, several types require nothing, but offer a lot. It all goes down to you and the options you choose. And you should make a choice only after you’ve weighed all the pros and cons of every possible loan out there.
1. What Are My Options?
Personal loans are a great choice if you need to do something with your old debt – or in other words, if you need to consolidate it. Other than that of course, this type of loan is great for any purchase you need to make, as long it is significantly big. They can be secured or not, depending on the amount of money you want to borrow and some other conditions.
Title loans are a good option if you need money fast, but don’t want to indulge in all the complicated procedures, or if you can’t think of anything else. The most common title loans are car title loans, which allow you to borrow a certain percentage of your vehicle’s value, and you have a short period to return it.
Home equity loans use your house as collateral, instead of your car. When it comes to bank loans and credit card cash, those are the more traditional options that require you to have a certain social security score and proof of your employment in order to get a loan.
However, out of all the other loan types, there is a loan type that is great if you need to get some instant cash, and that is a category of short term, unsecured personal loans, also called – payday loans. What’s so special about them?
These loans work for people who need to borrow money fast, but don’t want to let the lender use their car or their house as collateral. Instead, these types of loans are rather based on your income. Compared to the other loans, this loan doesn’t require proof of the lender’s ability to repay the money. Instead, there are extremely high-interest rates, and a couple more requirements every payday loan lender has to meet.
2. Before I Sign Up
Before you borrow money from any loan provider, there are a couple of things you need to do and a couple of steps you need to take in order to successfully complete the process. Doing thorough research beforehand is essential if you want to make sure that everything goes according to the plan, and that you are familiar with all the clauses that might become important in the future. However, there is certain information you need to keep in mind before signing up for a payday loan.
3. Understand how it works
Although loaning services can often be confusing and complicated to understand, you need to understand the system before you indulge in it. According to www.bluelineloan.com, payday loans allow you to get quick cash until you get your next month paycheck, or in other words – to get you through the month. That’s why they are called payday because their main purpose is to serve you until the next time you get paid. The most common loan amounts are somewhere between $500 and $1000. Before you get your money, you will be charged a fee that will probably be something around 20 dollars per one hundred. The period of time in which you have to return the money is usually short, and it goes up to four weeks, although it can be extended, if needed. You can extend the loan as much as you want, but you will be charged the original fees, which may cost you a lot of money.
4. Everything about interest rates
You need to include all the fees you will be charged if you borrow the money, because this is a piece of vital information that will help you determine if you want to opt for this loan or not. Calculate all the fees and if it’s something you’re ready to keep up with, then go for it! As we already mentioned, keep in mind that you will be charged $15 to $20 for every one-hundred you borrow, and if you don’t manage to pay it back on time, you will usually be charged the additional 2 or 3% per month. Other than that, make sure to have a clear understanding of the time limits and time frame in which you have to make payments, along with the total amount you need to return.
5. What documents you need to show
Payday lenders will ask for proof of your income, in order to give you the loan. Other than that, they will need to make sure you have a home address, that your income comes regularly and of course – that you have one or more active bank accounts that you use on a daily basis. If they ask you for anything more than that, it’s a sign that they are not a reliable lender, so you should avoid them. Before you sign the loan, do the research and make sure the lender is licensed, renowned and read the reviews online.