Did you know that the average American has just under $40,000 in debt?
That’s a whole lot of loans! People borrow money for a number of reasons, such as starting a business, furthering their education, or buying a house. Despite their reputations, loans are far from bad as long as you get the right one.
But finding a loan to suit you isn’t always easy. You have to know the differences between what’s available and the benefits of each.
To help you out, we’ve put together a guide on the different types of loans available in the U.S. today.
Student Loans
Student loans are those given to college students who need them to pay for their tuition. They might also cover living expenses so that the student doesn’t have to get a job while they study.
Student loans can be both federally and privately funded.
Personal Loans
Personal loans are injections of money into your bank that you can use for whatever you need. Your loan doesn’t have to be given for any specific purpose and can be used to pay off other loans, such as credit card debt. To get a personal loan, you will have to have a credit history check.
Auto Loans
Auto loans are like a mortgage for your car. They’re great if you need some help to afford a vehicle, but if you don’t meet every payment on time you do risk losing your new car. Auto loans are granted by car dealerships or banks, with the former usually having higher interest rates.
Small Business Loans
If you’re planning on starting a business, it’s likely you’ll need a small business loan. These can be given by the U.S. Small Business Administration, banks, or private lenders, and they’re a great way to get your business up and running! Loans are often granted depending on your credit history or business plan.
If you’re unsure which type of business loan is best for you, make sure to check out Your FundingTree. They’ll take a look at your needs and match you with a suitable lender.
Debt Consolidation Loans
Consolidation loans are designed to make your finances easier to manage. This loan essentially pays off several or all of your separate debts, such as outstanding balances across different credit cards. Then, instead of paying each card off every month, you just pay the consolidation loan instead.
Payday Loans
If you’re looking for fast money for a short period of time, payday loans are ideal. These help you reach your next paycheck and are typically used by people with no savings. Be warned though, the interest rates on these can be incredibly high!
Choose From These Different Types of Loans
Now that you know more about the different types of loans available to you, it should be pretty easy to find a suitable choice! If you’re still not sure, it could be a good idea to talk more to an expert. If you enjoyed this article, be sure to check out the many others like it on our website.
