Need A Loan In ?

With the sluggish economy and an increasing amount of people who are losing their jobs it’s no surprise that more and more people are turning to various types of loans in order to meet their financial obligations. But before you begin sending off loan applications it’s important to ask yourself a few questions to make sure that not only will you get fair payment terms and rates for your loan, but so that you’ll also be able to put the money that you receive to good use and pay it all back in time to avoid any late payment penalties.

The first thing you need to do is ask yourself the following questions:

1) Do I really need a loan? – Loans are a great way to make it through an emergency or unexpected financial burden but the last things loans should be used for are recreational or unnecessary purposes that simply aren’t crucial. Getting a personal loan from a bank for your next ski trip may sound like a good idea but it’s a short term solution to a long term problem. What you need to remember is that all loans eventually have to be paid back and that they all carry some form of interest rates, and usually the longer you wait to fully pay off the loan the more you’ll pay in interest and the higher your rates will go over time.

2) What type of loan do I need? – There are many different types of loans and I could go on for pages describing each individual type but to keep things simple you simply need to take the following into consideration.

The first thing you need to determine is exactly how much money you need because different types of loans have different limits and lending risks that banks and lenders are willing to tolerate. One of the more popular types of loans found on the internet is the faxless payday loan, these loans are quick, easy, and more often than not require very little in terms of credit checks. The downside of this speed and convenience is that most faxless payday loans are limited to about $500 – $750 per loan and will have a slightly higher interest rate than payday loans that do require faxing of documents or income. On the flip side you have mortgage loans, huge loan amounts that usually take a few weeks to put together and have extensive employment, income, asset, and credit checks.

While there is no one size fits all approach to deciding which type of loan you should get, we have put together a general guide that will help you decide which loans are appropriate for you based on how much money you need to borrow from a lender.

$100 – $1,000: faxless payday loans, fax payday loans, personal loans, credit union loans, car title loans

$1000 – $5000: personal bank loans, credit union loans, car title loans

$5,000 – $30,000: credit union loans, 401k loans

$30,000+: mortgage loans, home equity loans, 401k loans

As you can see the more money you need to borrow via your loan the more “traditional” and lower interest rate the loans become. In addition to the type of loan you are considering, you need to consider one more thing:

What kind of collateral do I have? – No matter what type of loan you get, you’ll need to show the lender that you have some form of collateral to protect them against defaulting or not paying on your loan. That collateral comes in many forms but usually include either your credit report and score, your employment history, and any major belongings you own (cars, boats, homes, savings, etc).

By taking what type of loan you need and then looking at what assets/collateral you have available you’ll be able to pin down which type of loan is best for you and your finances.